Net metering in Indiana
What is net metering?
Net metering allows you to earn a credit on your electric bill for the excess energy you produce from your system.
Billing and credit
Net metering ensures you receive fair credit for the electricity your system produces. It allows you to count the electricity you generate with your system against the electricity you buy from your utility.
You may find that some months you generate more electricity than you use. If this happens, net metering allows you to apply this extra credit to the next month. Credit for excess generation will rollover from month to month indefinitely.
As a solar owner, you are credited at the “full retail value” for your electricity. You earn the same credit as what it would cost to buy that same electricity from the utility—an even swap.
Note: This only applies to solar owners who are customers of an investor-owned utility (IOU). You may find different rules if you are a customer of a rural electric member cooperative (REMC) or a municipal utility.
Net metering in Indiana
|System capacity limit||The customer’s average annual consumption of electricity on the premises, up to 1 MW.|
|Monthly excess generation credit rate||For systems installed before December 31, 2017:
For systems installed after January 1, 2018 and before no later than July 1, 2022:
|Annual excess generation credit rate||Full retail credit (credit rolls over indefinitely as long as the customer remains a customer at the utility).|
|Statewide net metering cap||There is a cap at 1.5% of the most recent summer peak load at each utility. Additionally, 40% of this capacity is reserved for residential customers (.6% overall). Further, 15% of this capacity is reserved for biomass projects (.225% overall).|
|Applicable utilities||Investor Owned Utilities (IOUs)|
Who is eligible for net metering?
All Indiana customers of IOUs are eligible for net metering.
If you installed before December 31, 2017:
- You will receive the full retail credit for your excess electricity production until 2047.
If you installed after January 1, 2018:
- You will receive the full retail credit for your excess electricity production until 2032.
New installations will be eligible for net metering until the earlier of:
- July 1, 2022; or
- When the amount of net-metered electricity totals more than 1.5% of the summer peak load in your utility’s territory.
The Indiana Utility Regulatory Committee (IURC) provides quarterly net metering reports available online. This will tell you how close your utility is to the cap.
Solar United Neighbors worked with the Citizens Action Coalition and IndianaDG to create more transparency for solar owners. We played an integral role in getting Indiana to require more frequent net metering data reporting in the spring of 2019.
For those looking to read the full details of Indiana’s net metering policy, Indiana Code §§ 8-1-40 is the statute establishing the rules for IOUs in the state.
New credit rate
In 2017, Indiana passed a law that takes away net metering. The law (SEA 309) requires the IURC to set a new, lower credit rate for the excess electricity sent back to the grid. This rate is well below the 1-to-1 credit net metering provides.
The new rate will be based on the average marginal price of electricity paid by the supplier during the most recent calendar year, plus a 25% premium for each individual IOU.
This new lower rate applies to solar owners who install their systems after net metering is replaced in their utility’s territory, no later than July 1, 2022. It is possible this rate comes earlier than this deadline. The law also says utilities can end net metering if the utility reaches the 1.5% threshold described above.
In May 2020, Vectren became Indiana’s first IOU to file a petition to end net metering. Vectren is the IOU serving parts of southwest Indiana including Evansville. If their proposal is adopted, net metering will end for new customers starting January 1, 2021. They propose a new, lower rate to replace net metering. This will be called an excess distributed generation (or EDG) rate.
This is a much worse deal for customers. Vectren is the first Indiana utility to file to end net metering with the IURC, but Indiana’s four other investor-owned utilities will be starting a similar process over the next several months. SEA 309 requires all IOUs to file petitions to set their post-net metering rate by March 2021.
Solar United Neighbors of Indiana is working with many organizations and advocates to protect your right to fair credit, including:
- Citizens Action Coalition
- Vote Solar
- Environmental Law & Policy Center
- Solarize Indiana
We have intervened in the case before the IURC. Our goal is to protect the solar rights of Vectren customers and Hoosiers around the state.
You can read the full details of Indiana’s net metering policy, Indiana Code §§ 8-1-40 is the statute establishing the rules for IOUs in the state.
Net metering resources in Indiana
- The full text of Indiana Code §§ 8-1-40
- The full text of SEA 309 of 2017
- The full text of IURC General Administrative Order 2019-2, clarifying utility reporting requirements as part of implementing SEA 309
- Quarterly net metering reports from the Indiana Utilities Regulatory Commission (IURC)
- IURC net metering and interconnection timeline and documents
- Information about net metering at IPL
- Information about net metering at NIPSCO
- Information about net metering at I&M
- Information about net metering at Duke
- Information about net metering at Vectren
- Indiana will phase out retail rate net metering – Utility Dive
- New Indiana solar law could cripple small businesses and customer savings – The Indianapolis Star
- Indiana politicians got thousands in gifts while pushing solar policy – The Indianapolis Star
- Learn more on this webinar about Net Metering in Indiana and the issues we’ll be fighting for in 2021 to make sure that more Hoosiers can invest in and benefit from solar energy.