Community Net Metering to be Allowed in Colorado

With the passage of House Bill 1342, signed on June 5, 2010, Colorado has joined the league of states that allow groups of individuals to collectively own a solar array and distribute the benefits of that PV ownership.

The Community Solar Gardens Act allows groups of subscribers to collectively own a share of a solar installation in the county where they reside and receive corresponding credits on their electric bill. The bill defines a solar community garden as an on-site solar electric generation facility with a nameplate rating of 2 megawatts or less and in which subscriptions are owned by 10 or more customers of an investor-owned utility. 

Net metering credits are to be calculated proportionately to the subscribers’ investment and credited at the retail rate, minus a “reasonable charge” for the utility’s transmission and distribution costs and the costs of administering the contracts.  Community solar gardens must also purchase and install a production meter for their system.

Each subscription should be at least 1 kW of the generating capacity but no more than 120% of the average annual electric consumption of each subscriber at the premises to which the subscription is attributed (in keeping with the state’s traditional net metering law).

The bill also requires that utilities, in their first 2 compliance years, must purchase the greater of 3 megawatts, or half their total purchases of electricity from community solar gardens, from gardens that are sized at 500 kilowatts or smaller.  Utilities are not obligated to purchase more than 6MW in either of the first two compliance years.  After that, the commission will decide on minimum and maximum purchase obligations going forward.

The bill also exempts community solar gardens from the definition of a utility so that they do not need to be regulated by the state PUC.  It does not apply to electric cooperatives or municipal utilities.

The bill specifies that the PUC commence a rulemaking docket by October 1, 2010.

Laurel Passera

Laurel is a Senior Renewables Analyst for IREC attorneys Keyes, Fox & Wiedman, and engages in research and analysis of net metering and interconnection regulatory trends to support IREC’s outreach and communication efforts. In 2009, Laurel was a Southeast Regional Network fellow for the Southeast Environmental Leadership Program and currently sits on Raleigh City Council’s Environmental Advisory Board.