Net Metering Helps Commercial Buildings Lower Energy Costs

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Net Metering

Net Metering Helps Commercial Buildings Lower Energy Costs While Trimming Carbon Footprints

In our work, we see a growing number of commercial and industrial buildings not just studying solar as an alternative energy source but actively installing solar powered systems. The demand is being fueled in part by a shifting view by state governments about Net Energy Metering (NEM) for commercial and industrial facilities.

Net metering is the difference between the electricity you generate versus what you actually consume from your utility company.

Unlike private residences, where the peak energy use is during the evenings and on weekends, in general, demand for electricity at commercial and industrial facilities occurs during the work week.

Solar systems rely on sunshine. Net metering allows businesses a way to automatically receive energy from the utility when needed and when extra energy is generated, to sell excess energy back to the grid, further offsetting the cost of using solar power.

Many electric companies have tiered pricing, charging businesses a premium rate during the day, so solar makes eminent sense for buildings and factories. Yet the majority of U.S. states and Canadian provinces have yet to develop industrial NEM pricing.

Minnesota businesses are fortunate because Xcel Energy provides net metering for commercial and industrial buildings. For commercial customers willing to sign a long-term contract, Xcel will rebate $2.25 for every DC watt of solar power that you install in commercial structures. To sweeten the pot, under the state’s Minnesota Made program, it will toss in an additional $2.75 bringing the total Xcel rebate to $5.00 per installed DC watt.

But there are other approaches. New York State has adopted “virtual NEM,” allowing for energy credits generated from one facility to be transferred to another. Indeed, the Empire State is turning VEM into an asset for building owners. Virtual NEM means that, for instance, if the utility’s customer goes out of business, the credits from the solar power generated can be sold to another company or organization that needs them.

Likewise, if a business with multiple facilities in New York finds that one of its buildings is generating excess VEMs while another is “penalized” for heavy peak usage by its supplier, the credits can be shifted and used to reduce the cost of electricity.

The situation for each commercial and industrial installation can vary considerably, based in part on its location, its size and how much electricity it is using. However, the professionals here at Cedar Creek Energy can work with a site owner or business customer to develop a custom plan that maximizes the benefits of a solar installation while significantly reducing the cost to power the business.

But companies need to remember that the return-on-investment of installing solar is unlike other business investments. Within six-to-eight years, the system will pay for itself – with or without VEMs – and generate savings in the hundreds of thousands of dollars over the quarter-century life span of the system.

Cedar Creek Energy has installed over 500 solar panel systems for residential, commercial and industrial buildings. If you are interested in learning more about solar energy for your location, call us at 1-800-834-3378 or complete the form on our website.