Electricity consumers are participating in net-metering programs in growing numbers. When individuals or businesses install small onsite generators (such as a rooftop solar system), they can usually enter into a net-metering agreement with their utility. Between 2003 and 2010, the average annual growth in customer participation was 56%, with a 61% increase between 2009 and 2010. While participation is increasing, electric customers with net metering represented only 0.1% of all customers in 2010.
State policies and technological developments led to an increase in residential and business consumers installing small-scale, on-site generators. Starting around the late 1990s, many states began incentive programs to encourage the installation of renewable generation (such as rebate programs, performance-based incentives, tax incentives, or low-interest loans), as well as Renewable Portfolio Standards. Tariffs standardizing aspects of net metering like compensation and interconnection rules—making it easier for consumers to participate—are also an important part of this state-based effort.
Since EIA began publishing data on the incidence of net metering in 2003, there has been growth in its application. In 2003, utilities in 38 states and the District of Columbia reported having a total of 6,813 net-metered customers. Over three quarters of those were in California with 5,242 customers; the next-largest state, Arizona, had only 330 customers.