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State policies and technological developments have led to an increase in residential and business consumers installing small-scale, on-site generators. As a result, electricity consumers are participating in net-metering programs in growing numbers, according to the U.S. Energy Information Administration (EIA).

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, which had 5,242 net-metered customers, followed by Arizona, with 330 customers.

In 2010, every state except for Tennessee reported net-metered customers. The total number of customers increased to 155,841, of which California accounted for 56% (86,495), followed by Colorado (9,776), Arizona (8,559), New Jersey (7,526) and New York (5,638).

Net-metered installations were reported by 655 different investor-owned utilities, municipals and cooperatives across the country - up from 127 in 2003. Residential applications made up 86% of total net-metered customers in 2003 and 91% in 2010.

While consumers see lower bills and increased stability in prices with net metering, utilities can benefit by having units located closer to the end users, potentially requiring less investment in transmission and distribution infrastructure, according to the EIA. Further, on-site generation can remove or defer the need for infrastructure expansion.


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