Note: Senate Bill 309, signed into law in May 2017, makes important changes to Indiana's compensation system for distributed generation, including an eventual phaseout of retail rate net metering (to occur by July 1, 2022, or when individual utilities reach 1.5% peak summer load caps, whichever is earlier). Current net metering customers and customers who enter into net metering contracts before December 2017 will be able to continue their existing contracts until July 1, 2047, and customers who sign up before the earlier of July 1, 2022 or their utility reaching a 1.5% peak summer load cap, can continue net metering until July 1, 2032.
New DG compensation arrangements will be set through individual utility ratemaking proceedings; the new rate(s) must equal 1.25 * the average wholesale price paid by the utility(ies) for electricity.
The Indiana Utility Regulatory Commission (IURC) adopted rules for net metering in September 2004, requiring the state's investor-owned utilities (IOUs) to offer net metering to all electric customers.
Eligible Resources and System Size
Facilities with a maximum capacity of 1 megawatt (MW) are eligible for net metering. Eligible net metering energy resources include wind, solar, hydro, fuel cells, hydrogen, organic waste biomass and dedicated crops powered generation.
A utility may limit the aggregate amount of net-metering nameplate capacity to 1% of its most recent summer peak load. Nameplate capacity for inverter-based net metering facilities is defined as "the aggregate output rating of all inverters in the facility, measured in kW." At least 40% of a utility's net metering capacity must be residential customers.
IOUs may choose to offer larger net metering capacity limits.
Net Excess Generation (NEG)
NEG during a billing period is credited to the customer's next monthly bill in the form of a kilowatt-hour (kWh) credit at the retail rate. NEG credits rollover indefinitely. If a customer elects to cease net metering, any unused credit will revert to the utility.
An interconnection agreement between the utility and the customer must be executed before the facility may be interconnected. Net-metered systems must comply with Indiana's interconnection standards (170 IAC 4-4.3).
Either a single meter or a dual-meter arrangement may be used. Utilities may not charge customers any fees for additional metering for single-phase configurations installed by the utility, for customers' requests to net meter, or for an initial net-metering facility inspection.
Net metering customers must maintain homeowners, commercial, or other insurance providing coverage of at least $100,000 against loss arising out of the use of a net metered facility. Utilities may not require additional liability insurance in excess of this limit.
The IURC's 2014 net metering report is available here.