Non-Residential Renewable Energy Solutions

Summary

NOTE: In May 2018, S.B. 9 signed into law and made significant changes to the state's Renewable Portfolio Standard and Net Metering policies. The law ends net metering to new customers when the Virtual Net Metering, Low Emission Renewable Energy Credit, and Zero Emission Renewable Energy Credit programs end on January 1, 2022. The existing net metering customers will be grandfathered until December 2039. Starting January 1, 2022, new customers will be able to select a buy-all, sell-all option, or net billing option under the new Net-Tariff program. The Public Utilities Regulator Authority (PURA) has finished implementing the new program as the Non-Residential Renewable Energy Solutions Program. Residential customers can participate in the Residential Renewable Energy Solutions Program.

The Non-Residential Renewable Energy Solutions (NRES) Program is a successor program to the Low Emission Renewable Energy Credit and Zero Emission Renewable Energy Credit (LREC/ZREC) and Virtual Net Metering (VNM) programs, with the objectives to foster the sustained, orderly development of the state’s Class I renewable energy industry and to encourage the participation by customers in underserved and environmental justice communities, among others. The program is authorized to run for six (6) years and to select up to 120 MW of clean energy annually.

This is a six-year program that combines the state's previous Net Metering program and Renewable Energy Certificates (REC) payments into one program. Once a project has been approved, the incentive rate will not change for all 20 years of the contract. Customers can choose from one of two tariffs. The netting tariff functions similarly to standard net metering: the customer's usage and generation is netted, after which the customer's bill is calculated. Under the buy-all tariff, the customer sells all of their generated energy to the utility. Under both tariffs, all of a customer's generated RECs are sold to the utility. The following bid price caps rates will be in effect for eligible applications received in 2024:

The netting rate bid price cap is tied to the buy-all bid price caps. The sum of the net present value retail rate and the price per REC cannot exceed the equivalent buy-all cap for that size category. The precise calculation is:

Bid Price Cap ($/REC) + NPV Retail Rate ($MWh)2 £ Buy-All price cap, dependent on project category
$0/MWh £ Bid Price Cap ($/REC)

In addition, the cap will be calculated with both the previous year's prices x 2.5% retail rate escalation and the current year's prices; the chosen cap will be whichever is less. The "current" calculations are based on the most recent February solicitation and the August solicitation before it (e.g. for Year 3 calculations, the most recent February solicitation was Year 2's, while the August one before that was Year 1's).

Small projects -- 0 to 200 kW -- are offered a standard contract with a set rate. Medium (200 kW to 1 MW), Large (1 to 5 MW), and Low-Emission (0 - 5 MW) projects are awarded incentive agreements through a competitive solicitation process. The upper size limit was originally 2 MW, but was increased to 5 MW by S.B. 176 in 2022.

a) A monthly monetary on-bill credit that will be applied to the customer's utility bill at the project site, and/or;

b) A quarterly direct payment provided to a Tariff Payment Beneficiary.

For more information, contact a Program Administrator, or view the FAQ here.

Bid Preferences

There are three bid preferences available: a 20% bid preference for systems located on landfills or brownfields, a 20% bid preferences for systems located in an Economically Distressed Municipality, and a 30% bid preference for carport or solar canopy systems. State, agricultural, and municipal customers can receive the Distressed Municipality bid preference if the beneficial account(s) is owned by the distressed municipality and the distressed municipality is paying for the beneficial account's electric service, even if the serviced building is not physically located in the municipality. Carport/Solar Canopy systems can bid above the price cap, as long as the bid preference brings the bid below the price cap; Small projects cannot apply for the Carport/Solar Canopy bid preference.

REC Buyback

Starting with the August 2024 solicitation, participants can buy their RECs back from the utility at the Alternative Compliance Payment price.

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. HB 5496 enacted on June 2016 requires that the virtual net metering facilities must be operational within 18 months from the date Department of Energy and Environmental Protection (DEEP) issues final permit.

*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.