The increasing popularity of on-site power generation is driving the demand for methods to compensate customer-generators that supply electricity to the grid. Although many practices exist for providing such compensation, confusion surrounds the terms often used to describe such practices (notably, net metering and net billing). To help clarify this situation, the following paper proposes a taxonomy that distinguishes between 16 distinct compensation practices. (c) 2004 Elsevier Ltd. All rights reserved.