Optimizing prices for small-scale distributed generation resources: A review of principles and design elements

Regulators worldwide are considering many proposals to improve pricing schemes for low-carbon distributed electricity resources in order to achieve compensation that is fairer and better aligned with the incremental benefits to the utility and society. The key concern is that under the current practice of net metering, the expansion of renewables-based, small-scale distributed generation is at odds with the utility's efforts to provide service on a reliable, efficient (least-cost) and equitable basis.