As with all rules/legislation, there are exceptions. So for a convoluted, long-winded answer, see page 17-18 of the Renewables Portfolio Standard Eligibility Guidebook: http://www.energy.ca.gov/2007publications/CEC-300-2007-006/CEC-300-2007-006-ED3-CMF.PDF

“Distributed generation PV facilities [READ: residential PV installations] and other distributed renewable energy technologies, however, have qualities that make them more difficult than central station facilities to integrate into RPS implementation. For example, distributed PV facilities are typically small-scale applications designed to meet a consumer’s on-site energy demands. In addition, generation from distributed generation PV may be metered differently than central station facilities or not metered at all.

Both the Energy Commission and the CPUC have roles in determining RPS implementation for distributed generation. In January 2007, the CPUC determined that owners of renewable distributed generation facilities could maintain ownership of the RECs attributed to their system’s generation. However, the Energy Commission will not certify distributed generation PV and other forms of customer-sited renewable energy into the RPS at this time, with the following exception.

The Energy Commission will certify facilities that would have been considered distributed generation facilities except that they are participating in a standard contract/tariff executed pursuant to Public Utilities Code 399.20, as implemented through the CPUC Decision 07-07-027 (R.06.05.027), executed pursuant to a comparable standard contract/tariff approved by a local publicly owned electric utility (POU), or if the facility is owned by a utility and meets other requirements, to become certified as RPS-eligible. If the energy is sold under contract to a retail seller (or POU that may have a similar standard contract/tariff structure), then the energy sold may be RPS-eligible. To qualify as RPS-eligible, the facility must not receive (or have received or be planning to receive) benefits from the CPUC-approved Self Generation Incentive Program or California Solar Initiative, the Energy Commission’s Emerging Renewables Program, New Solar Homes Partnership, or Pilot Performance Based Incentive Program, or any other similar ratepayer-funded program. Similarly, the facility must not receive or plan to receive benefit from net metering programs or net metering tariffs approved by the CPUC or any POU. If the facility is currently receiving benefits through net metering, it may apply for pre-certification and subsequently apply for certification once it has exited any net metering agreements.

The Energy Commission will not certify distributed generation facilities as RPS-eligible unless the CPUC authorizes tradable RECs to be applied toward the RPS. If the CPUC authorizes the use of tradable RECs, it may revisit the metering requirements for DG systems consistent with the measurement requirements adopted for grid connected renewable facilities and the Energy Commission’s tracking system. Facilities that receive funding under the Energy Commission’s New Solar Homes Partnership program, Emerging Renewables Program, or Pilot Performance-Based Incentive Program, under the CPUC-approved Self Generation Incentive Program or California Solar Initiative, or any similar ratepayer-funded program, and facilities that benefit from net metering programs or tariffs approved by the CPUC or any POU, are considered distributed generation and may not be certified as RPS-eligible at this time.”

This post was mentioned on Twitter by GetSolar: New blog post: California Raises Solar Net Metering Cap http://www.getsolar.com/blog/california-raises-solar-net-metering-cap/3671/...