Grid-Connected Distributed Generation: Compensation Mechanism Basics

Alexandra Aznar, Alexandra Aznar, Owen Zinaman, Carl Linvill, Naim Darghouth, Timon Dubbeling

Research output: NRELBrochure


This short report defines compensation mechanisms for grid-connected, behind-the-meter distributed generation (DG) systems as instruments that comprise three core elements: (1) metering and billing arrangements, (2) sell rate design, and (3) retail rate design. This report describes metering and billing arrangements, with some limited discussion of sell rate design. We detail the three possible arrangements for metering and billing of DG: net energy metering (NEM); buy all, sell all; and net billing.
Original languageAmerican English
Number of pages12
StatePublished - 2017

NREL Publication Number

  • NREL/BR-6A20-68469


  • build rate design
  • compensation mechanism
  • distributed generation
  • distribution
  • grid connected
  • public policy
  • retail rate design
  • sell rate design


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