considerable confusion between the terms "net metering" and "feed-in tariff"# (FIT). In general there are three types of compensation for local, distributed generation: Net metering: always at retail, and which is not technically compensation, although it may become compensation if there is excess generation and payments are allowed by the utility. Feed-in tariff: generally above retail, and reduces to retail as the percentage of adopters increases. Power purchase agreement: Compensation generally below retail, also known as a "Standard Offer Program", can be above retail, particularly in the case of solar, which tends to be generated close to peak demand. Net metering only requires one meter. A feed-in tariff requires two. Time of use metering Time of use (TOU) net metering employs a smart (electric) meter that is programmed to determine electricity usage any time during the day. Time-of-use allows utility rates and charges to be assessed based on when the electricity was used (i.e., day/night and seasonal rates). Typically the generation cost of electricity is highest during the daytime peak usage period at sunset, and lowest in the middle of night. Time of use metering is a significant issue for renewable-energy sources, since, for example, solar power systems tend to produce most energy at noon and produce little power during the daytime peak-price period (see also duck curve), and no power during the night period when price is low. California, Italy and Australia has installed so many photovoltaic cells that peak prices no longer are during the day, but are instead in the evening. TOU net metering affects the apparent cost of net metering to a utility. Market rate net metering In market rate net metering systems the user's energy use is priced dynamically according to some function of wholesale electric prices. The users' meters are programmed remotely to calculate the value and are read remotely. Net metering applies such variable pricing to excess power produced by a qualifying system. Market rate metering systems were implemented in California starting in 2006, and under the terms of California's net metering rules will be applicable to qualifying photovoltaic and wind systems. Under California law the payback for surplus electricity sent to the grid must be equal to the (variable, in this case) price charged at that time. Net metering enables small systems to result in zero annual net cost to the consumer provided that the consumer is able to shift demand loads