CFAES Give Today
Energize Ohio

Ohio State University Extension


Net Metering as a Business Retention Tool

Dec. 7, 2011

Currently 43 states in the U.S. have adopted some type of net metering law.  Net metering programs are an essential incentive for investment in on-site renewable energy generation.  Net metering allows residents and businesses to use their own on site energy generation to offset their total energy consumption over a billing period.  Under net metering, the utility company can only bill based on the NET electricity consumed at the end of the billing period.  This means regardless of when you use the energy or when you produce energy; you are only billed on the net difference.  In some cases, utilities are required to pay for net excess generation.

Ohio's net-metering law requires electric distribution utilities to offer net metering to customers who generate electricity using wind energy, solar energy, biomass, landfill gas, hydropower, fuel cells or micro-turbines.  As mentioned earlier, 43 states have some type of net metering laws.  However, Ohio is one of three states that have no limit on the amount of energy generation under net metering.  While there is no stated capacity limit on net-metered energy generation in Ohio, a net-metered system must be designed and intended to offset part or all of the customer-generator's electricity requirements. 

Net metering is a low-cost, easily administered method of encouraging customer investment in renewable energy technologies.  Furthermore, in Ohio many economic development professionals are considering net metering as a form of business retention by helping employers to fix their energy cost through onsite renewable energy generation.