Trend Alert: Reviewing the Costs & Benefits of Net Metering

Vote Solar is committed to protecting and enhancing policies that help Americans generate their own power from the sun. As our avid blog readers will know, net metering is one of policies we pay particular attention to.

Like roll over minutes on your cell phone bill, net metering allows a solar customer’s electric meter to “spin backwards” ensuring that they receive fair credit for any electricity that they put back on the grid for others to use. This simple billing arrangement can have a big impact on the economic viability of a solar energy system. And it’s up to each state to set the rules for their own utilities.

Because this policy is so important for customer-sited solar and other renewables energy technologies, we are actively participating in net metering and broader rate design regulatory proceedings in states across the U.S, including: Arizona, California, Colorado, New Mexico, Minnesota, New York and Vermont to name just a few.

Click here to see our two most recent sets of comments in Vermont and Minnesota.

Vermont comments addressing the state’s investigation into conducting a cost and benefit analysis of net metering.

Minnesota comments addressing the state’s investigation into whether net metering should be expanded beyond systems 40kW and under.

We have said it before and we will say it again: net metering is one of the most effective state-level policy tools for supporting renewable energy development. It is currently empowering Americans to go solar in 43 states and the District of Columbia. This simple idea – your meter spins backwards to reduce your utility bill – is easy to understand and implement, making it a no-brainer for customers and a powerful policy for supporting investment in solar.

As we participate in regulatory proceedings addressing the parameters and implications of net metering rules, we continue to encourage states to choose “data over drama.”  In efforts to limit net metering access, some utilities claim that net metered customers are getting more benefits from the shared grid than they’re paying for since they’re reducing their payments to the utilities. Such arguments are used to support additional standby or network use charged to recoup the “stranded costs” they claim net metering creates.  Other utilities suggest that net metering should be replaced altogether.  Here at Vote Solar, we say first let’s look at the data.

Net metered solar customers are delivering many benefits to their fellow ratepayers by producing clean power when and where it’s needed most. Numerous studies across the country have evaluated the overall costs and benefits to ratepayers resulting from increased penetration of net metering or distributed generation. In particular, these studies account for the value of solar energy exported to the grid based upon the marginal costs of the displaced energy, the avoided capital cost of installing new power generation due to the added capacity value of the solar PV systems, transmission and distribution expense and line loss savings associated with the systems, and in some cases, environmental benefits.

The results of the most prominent of these studies (RW Beck’s 2009 study for APS, Austin Energy’s 2012 solar value study, and Crossborder Energy’s 2012 study of net metering in PG&E territory in California) clearly demonstrate that the increased development of DG solar and use of net metering result in net benefits to the entire electricity rate base.  While we recognize that the costs and benefits of net metering will vary by utility service area, there is no question that distributed solar generation brings significant value – and that should be fully accounted for in these important policy discussions.

Chart 1: Austin Energy VOST – PV Value Results by Component and Configuration







Chart 2: Solar DG Value Buildup in RW Back’s APS DG Valuation Study









Chart 3: Key Findings in the Crossborder Energy 2012 Evaluation of Residential Net Metering in California










If you want to learn more about Vote Solar’s work in this space feel free to reach out to Rick Gilliam, our research director at [email protected], or Annie Lappé, our Solar Policy Director at [email protected].