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Private on-site solar program

Private on-site solar includes roof-top and ground mounted solar systems, located at your home or business, owned or leased by a third party. When you install a private, on-site solar system, you will need two meters – a production meter and a net meter - to ensure you get credit for returning any excess electricity generated to the Black Hills Energy power grid.

Production meter 

The production meter measures how much electricity is being generated each month by your private, on-site solar system.

Net meter or “billing meter” 

The net meter measures the amount of electricity you use from the power grid in your home or business and the amount of electricity produced from your private, on-site solar system. 

Net Metering – if you install a private on-site solar system at your home or business, you will have a meter – a net meter – that will allow you to get credit for any excess energy produced by your private solar system. Excess energy that you create is automatically delivered to and used by Black Hills Energy’s power grid, and you get credit for it each month through a process called "banked energy." Net metering also measures the amount of energy you might use from our power grid when the sun isn’t shining or when your energy needs exceed the output of your private solar system.

Two options exist regarding year end banked energy: cash-out option and a continuous rollover option.

  • Year-end cash-out:
    • You will earn the incremental cost of energy (what it costs us to provide electricity) averaged over the previous 12 months. Year-end payments occur in January and are determined by the previous year's meter readings. 
    • Remember that the year-end cash-out dollar amount is significantly less than the retail cost of electricity.
    • Per PUC rules, you will be automatically enrolled in the year-end cash-out option unless you opt into the continuous rollover program. 
  • Continuous rollover option:
    • If you enroll in the continuous rollover option, the extra kilowatt-hours on your account at the end of the year continue into the next year as an energy credit. These credits can be used month-to-month, year after year.
    • Per PUC rules, enrolling in continuous rollover is permanent; once you opt in, you will not be allowed to switch to the year-end cash-out option.
    • Most solar customers choose continuous rollover option. 
    • All third party-owned systems are placed in the rollover option as required by PUC rules. 

To get started:

We recommend that customers read the program rules, talk to their solar energy neighbors, and contact several qualified on-site solar installation contractors ideally, three or more. Industry professionals will help you decide the size and type of system that will best meet your needs and obtain the necessary permits and inspections.  The Colorado Solar Energy Industries Association, COSEIA maintains a list of qualified Colorado solar installation contractors with the training and experience necessary to properly design and install an on-site solar system. 

Important information 

  • If you install a new, private on-site solar system during the year, you are eligible for the production-based incentive program (PBI) to help cover a portion of the cost of your investment.
  • The number of available subscriptions for a PBI are limited and very competitive. Residential PBI is awarded four times a year on a first-come, first-served basis. Commercial PBI is awarded once per year, on the first business day of the year.
  • The production-based incentive is guided by PUC rules. It is based on the total amount of solar electricity generated by your system during a calendar year.
  • PBI payments for the previous year are made in January. 

The PBI incentive is limited and awarded four times a year on a first-come, first-served basis.

  • Quarterly PBI applications will be accepted at 10 a.m. on the first business day of the quarter (January, April, July, and October)
  • If you have a PBI, then we will issue a PBI check within 60 days after the end of the year. 
  • If the PBI fund has been exhausted for the quarter, you may choose to wait until the next quarter to resubmit your application or proceed with your solar installation without a PBI.

Example one: (PBI Reservation):

  • Your solar system produces 6,000 kWh in one month.
  • You use a total of 4,000 kWh in the same month.
  • Your excess energy of 2,000 kWh goes into a "banked energy" account for future credit.
  • Your net usage will be zero for the month, since your production was in excess of your usage.
  • The solar production of 6,000 kWh will contribute to the annual PBI incentive payment.
  • You bill will reflect only the minimum interconnection charge.

Example two (PBI Reservation):

  • Your solar system produced 500 kWh in one month.
  • Your usage for the month was 1,000 kWh.
  • Your total net usage was 500 kWh that month.
  • Banked energy credits from "prior banked energy" were 100 kWh.  These are available to offset your bill. Net kWh for billing is 400 kWh for the month. 
  • The solar production of 500 kWh will contribute to the annual PBI incentive payment.

PBI is calculated by multiplying the total number of kilowatt-hours (kWh) generated by your private, on-site solar system times the applicable PBI multiplier rate. PBI payment terms are as follows:

  • Tier 1 Solar Systems: (0.5 kW up to and equal to 30 kW)
    • Year 2019: $0.040 per kWh is paid over a 10-year period.
    • Year 2020: $0.035 per kWh is paid over a 10-year period.
    • Year 2021: $0.030 per kWh is paid over a 10-year period.
  • Tier 2 Solar Systems: (30.001 kW up to and equal to 500 kW)
    • Year 2019: $0.070 per kWh is paid over a 10-year period.
    • Year 2020: $0.065 per kWh is paid over a 10-year period.
    • Year 2021: $0.060 per kWh is paid over a 10-year period