Net Energy Metering (NEM) Aggregation

The foundational eligibility rule for NEM aggregation. All meters must be located on a single legal parcel or a set of contiguous parcels under the same ownership. This prevents a customer from aggregating generation at one geographic location to offset load at a distant, unrelated site. Utilities verify contiguity through parcel maps and legal descriptions during the interconnection application process.

A critical distinction in solar valuation:

• Behind-the-Meter (BTM): A single meter sees both generation and load. Excess solar instantly offsets internal consumption before any export occurs.
• NEM Aggregation: Multiple meters are treated as a single billing entity. Generation from a solar array on one meter can offset the total load across all aggregated meters, even if the generation meter exports to the grid while others import.

This is particularly valuable for farms, campuses, and industrial sites with spatially separated loads and generation.

The utility calculates the net energy across all aggregated meters at the end of each billing period. The process:

1. Meter-Level Netting: Each meter's consumption is offset by any generation physically connected behind it.
2. Aggregate Summation: The net kilowatt-hours (kWh) from all enrolled meters are summed.
3. Single Bill Generation: The customer receives one bill reflecting the total net consumption or generation.

This eliminates the inefficiency of one meter accruing credits while another incurs charges on the same property.

NEM Aggregation is often confused with Virtual Net Metering (VNEM) , but they serve different use cases:

• NEM Aggregation: A single customer with multiple meters on their own contiguous property.
• Virtual Net Metering: Multiple different customers (e.g., tenants in a multi-family building) receive credits from a single shared solar system.

Aggregation is a billing simplification for one entity; VNEM is a community solar allocation mechanism.

When aggregated generation exceeds total aggregated load over a billing period, the Net Surplus Compensation rate applies. This rate is typically lower than the retail rate—often based on the utility's avoided cost of generation.

Most jurisdictions include an annual true-up mechanism:

• Monthly surplus credits roll forward.
• At the annual true-up date, any remaining surplus is compensated at the lower wholesale rate.
• This prevents large banking of retail-rate credits across years.

Utilities impose specific technical requirements on aggregated meters:

• Common Service Point: All meters must be on the same side of a single service transformer in many jurisdictions.
• Interval Metering: Aggregated meters often require time-of-use (TOU) or interval data recorders to accurately track consumption and generation profiles.
• Generator Metering: A dedicated production meter may be required to measure total solar output separately from net flow, enabling accurate renewable energy credit accounting.

A billing mechanism that allocates credits from a single shared renewable energy system to multiple tenants or meters within a multi-family building or community solar project. Unlike standard NEM Aggregation, which serves a single customer with multiple meters, Virtual NEM distributes generation credits proportionally to different utility accounts based on a pre-defined allocation percentage. This enables renters and condominium owners to benefit from solar without individual ownership.

The strategy of charging a battery energy storage system during low-price off-peak periods and discharging during high-price on-peak periods. In an NEM Aggregation context, TOU arbitrage becomes more complex as the optimizer must account for different rate schedules across multiple meters on the same property. The goal is to maximize the total bill reduction across all aggregated accounts, not just a single meter's savings.

A statistical methodology that estimates what a customer's energy consumption would have been without a demand response event or, in the case of NEM, without on-site generation. CBL is critical for NEM Aggregation because the utility must accurately calculate the net consumption at each meter to determine the total offset. Common methods include:

• 10-day average: Simple average of the most recent non-event weekdays
• Regression-based: Accounts for weather and day-of-week variables
• Metered generation: Direct measurement of inverter output for precise netting

A granular economic valuation of the benefits a distributed energy resource provides to the distribution system at a specific location. DLV directly impacts NEM Aggregation compensation rates, as utilities increasingly move away from flat retail-rate net metering toward value-stacked tariffs. A solar array on a constrained feeder may receive higher export credits than one on an uncongested circuit. Components of DLV include:

• Avoided distribution capacity costs
• Reduced line losses
• Voltage support value