Distributed Generation - generate your own power for your home or business
Distributed energy consists of a range of consumer-owned (or leased) smaller-scale power devices (e.g., rooftop solar panels, small wind turbines, microturbines, fuel cells, etc.) physically installed at your location and designed to provide electricity to power, heat, and cool your home, apartment or business.
You will continue to receive electricity and natural gas from your competitive energy supplier or local utility as backup power.
What if I generate more energy than I consume? Can I sell it into the energy market or store it?
In most states and utility territories, you can receive credit on your energy bill from your local utility for any surplus-generated electricity from your solar panel, combined heat and power (CHP) unit, etc. This is known as net metering (see further below for more information).
Storing energy by using home energy storage batteries allows you to use the energy when you need it. For example, when you’re away from home during the day, the solar panels will charge the home battery enabling the stored energy to be used at night to power the home to keep it warm, or cool, and functioning. Battery technology is still evolving, but research and investment is improving the function of storage units more and more every year.
So, what are the benefits of distributed generation?
Like “distributed computing” (i.e. your personal computer) and your personal cell phone, distributed generation shifts control to you, the consumer. Whether you want to contribute to a cleaner environment, or have greater control over reliability by having protection from blackouts and brownouts, or better decision making over your energy costs, distributed energy offers solutions that can best fit your energy needs.
There is also a new option for those who are unable to put distributed generation on their own property – called Community Solar. We will delve into this topic in more detail in a later issue this year.
Net metering is used when a homeowner or business owner produces some of his or her own energy. Net metering uses an advanced physical meter that runs in both directions to track the net usage of power. If that owner produces more energy than he or she uses, that energy can be sold back to the grid, resulting in a bill credit. The value of the credit is subject to state laws and regulations. Utilities may also require one-time or monthly charges to distributed generation customers for the cost of interconnecting units to the grid as well as maintaining on-demand power for the times when a customer must draw electricity from the grid. These charges can reduce the value of net metering credits.
Renewable Energy Credits
For every unit of renewable energy generated by a renewable energy source, an equivalent amount of renewable energy certificates (RECs) are produced. A REC represents the environmental benefits of 1 megawatt hour (MWh) of renewable energy. The producer of the renewable energy can then sell not only the physical electricity, but also the associated RECs. Competitive energy suppliers, generators and utilities must follow strict guidelines when producing, purchasing, selling, or retiring RECs. Depending on how your distributed generation unit is financed, you may or may not own any RECs that are produced.
Okay, I might be interested. What are my next steps?
Planning for a home renewable energy system is a process that includes analyzing your existing electricity use, looking at local codes and requirements, deciding if you want to operate your system on or off of the electric grid, and understanding technology options you have for your site.
For more information, check with:
Your competitive energy supplier
Your local utility
Your state public utility commission
The U.S. Department of Energy
The Energy Storage Association
-The ACCES team