Connecticut's two investor-owned utilities -- Connecticut Light and Power Company (CL&P) and United Illuminating Company (UI) -- are required to provide net metering to customers that generate electricity using "Class I" renewable-energy resources, which include solar, wind, landfill gas, fuel cells, sustainable biomass, ocean-thermal power, wave or tidal power, low-emission advanced renewable-energy conversion technologies, and hydropower facilities up to two megawatts (MW) in capacity.
There is no stated limit on the aggregate capacity of net-metered systems in a utility's service territory. Any net excess generation (NEG) during a monthly billing period is carried over to the following month as a kilowatt-hour (kWh) credit for one year. At the end of the year (March 31), the utility pays the customer for any remaining NEG at the "avoided cost of wholesale power." (See specific utility rate tariffs for details).
Virtual Net Metering
Connecticut allows virtual net metering for state, municipal, and agricultural customers. A virtual net metering facility, must generate electricity using either Class I or Class III* resources from facilities of up to 3 MW. Systems can be owned by the customer, leased by the customers, or owned by a third-party on a customer's property. The system may serve the electricity needs of the municipal host customer and additional beneficial accounts as long as the beneficial accounts and host account are within the same electric distribution company's service territory. A municipal or state customer can host up to 5 additional municipal or state accounts, and 5 additional non-state or -municipal buildings if those accounts are critical facilities** and connected to a microgrid. An agricultural customer can host up to 10 beneficial accounts as long as those accounts either use electricity for agricultural purposes, or are municipal or noncommercial critical facilities. In addition, all virtual net metering hosts can aggregate all of the meters owned by that customer host.
If a host customer produces more electricity than it consumes, the excess electricity will be credited to the beneficial accounts for the next billing period at the retail rate against the generation service component and a declining percentage of the transmission and distribution charges that are billed to the beneficial accounts. The declining percentages are as follows:
- First year of commercial operation: 80% of transmission and distribution charges
- Second year of commercial operation: 60% of transmission and distribution charges
- Third year of commercial operation and after: 40% of transmission and distribution charges.
Excess credits rollover monthly for one year. The electric distribution company is to compensate the municipal or state host customer for excess virtual net metering credits remaining at the end of the calendar, if any, at the retail generation rate and the above declining percentage of transmission and distribution charges.
*Class III resources are defined as "the electricity output from combined heat and power systems with an operating efficiency level of no less than fifty per cent that are part of customer-side distributed resources developed at commercial and industrial facilities in this state on or after January 1, 2006, a waste heat recovery system installed on or after April 1, 2007, that produces electrical or thermal energy by capturing preexisting waste heat or pressure from industrial or commercial processes, or the electricity savings created in this state from conservation and load management programs begun on or after January 1, 2006."
**Critical Facilities are defined as a hospital, police station, fire station, water treatment plant, sewage treatment plant, public shelter, correctional facility, production and transmission facilities of a television or radio station, commercial area of a municipality, municipal center, or any other area identified by the Department of Energy and Environmental Protection as critical.