By: Pivot Energy
May 9, 2024
In an era where sustainability efforts are not just appreciated but expected, many corporations are increasingly turning to innovative solutions to meet their decarbonization goals. One strategy gaining momentum is Virtual Net Energy Metering (VNEM), which offers businesses the ability to support renewable energy generation without installing or maintaining equipment on their property.
For those new to this topic, VNEM, or "offsite net metering," allows businesses to install renewable energy systems offsite and benefit from the energy produced via renewable energy certificates (RECs). This setup is ideal for companies lacking space for onsite installations or those operating across multiple leased properties. For those with extremely ambitious emissions reduction targets, VNEM can be paired with onsite solar installations, community solar subscriptions, or other solar procurement strategies. Keep reading to explore the unique landscape of Colorado's VNEM program and the critical timelines to incorporate a VNEM project within your clean energy portfolio.
For a broad understanding of how VNEM projects operate, refer to our previous blog:
What Is Virtual Net Energy Metering? (Benefits of Net Metering vs. Virtual Net Metering).
Colorado is currently at the forefront of this initiative, with Xcel Energy leading the charge as one of the first utilities to formalize a robust VNEM program. Relative to other VNEM programs, Xcel’s is particularly advantageous as it allows the application of energy credits to any property within Xcel Energy’s Colorado service territory, regardless of proximity to the generation source. As other states and utilities consider expanding their own VNEM programs in the coming years, they may see Colorado’s pioneering approach to VNEM as a blueprint for how to expand renewable energy participation across different market segments.
The VNEM program in Colorado is highly regulated, with specific project requirements and limited capacity. Each year, Xcel Energy sets a cap on how much solar capacity they will offer through VNEM, requiring companies to apply within a designated window to secure their project. In 2023, Xcel Energy allocated 82 megawatts (MWac) of capacity to the VNEM program through a standard offer, distributed on a first-come, first-served basis. The year's allocation was divided into two phases: the first 41 MWac was made available on June 12, and the remaining 41 MWac was released on September 12, 2023.
The next application period for Xcel Energy is anticipated to be as early as June 2024. Considering the high demand for these projects, it's crucial that any interested companies act quickly and partner with an experienced solar developer to submit an application through Xcel’s Interconnection Application Portal. It is worth noting that approval is not guaranteed; Xcel reviews each submission to confirm capacity availability and other requirements before proceeding. Specifically, projects must adhere to the following rules:
Prior to installation, renewable energy projects require formal approval via an interconnection agreement, which can require costly upgrades depending on the project's complexity. Moreover, businesses must communicate within the application process whether they intend to retain or sell the project RECs.
VNEM programs represent a significant opportunity for businesses to advance their sustainability goals while benefiting economically from offsite renewable energy production. With the application deadlines and limited capacity, the time to act is now. By partnering with experienced developers like Pivot Energy, companies can efficiently harness program benefits and contribute to a more sustainable future.
Pivot Energy has demonstrated profound expertise and success in this field, securing over 90% of Xcel Energy’s available program capacity in 2023, nearly 100 MWdc. Pivot provides end-to-end support, from initial consultation through to navigating interconnection rules and system sizing requirements, ensuring a seamless application process.
Reach out today to discuss how VNEM can fit into your sustainability strategy.
Pivot Energy
Together, solar and storage offer the unique ability to lower both demand and energy portions of a customer’s electricity bill.
