In states such as Massachusettes and Nevada, net metering caps are threatening to stall solar progress. The solar industry, environmentalists, and policy makers are focused on expanding access to this critical solar incentive.
What is net metering?
Net metering allows residential and commercial customers who generate their own electricity from solar power to feed excess electricity back into the grid. Net metering is credited with significantly bolstering solar deployment and, currently, 43 states plus D.C. have implemented net metering policies. The policies vary significantly by state which means that the benefits of net metering can vary widely for solar customers in different areas of the country.
How does net metering work?
For example, if a residential customer has a PV system on the home's rooftop, the system may generate more electricity than the home uses during daylight hours. If the home is net-metered, the electricity meter will run backwards to provide a credit against what electricity is consumed at night or in periods when electricity demand exceeds system supply. Customers are only billed for their "net" energy use.
Benefits of Net Metering
Net metering provides substantial economic benefits in terms of jobs, income and investment. Net metering increases demand for solar energy systems, which in turn creates jobs for installers, electricians, and manufacturers who work in the solar supply chain. Some examples of net metering benefits, as cited by the Solar Energy Industries Association, include:
- Individual PV systems can offset expensive peak electricity purchases (in the middle of the day when sun is shining brightest) by utilities, resulting in lower electricity bills for all customers.
- The reduction of energy loss as it travels to reach the end consumer. All net metered PV systems deliver electricity at or near the point of consumption.
- Net metering PV systems allow consumers to fix a portion of their utility expenses for years at a cost lower than they would have paid otherwise.
- Net metering provides a critical component to the formula that allows for the development of a solar energy market and the jobs that come with it.
Why Would Utilities Want to Cap Net Metering?
Unfortunately, some utilities perceive net metering policies as lost revenue opportunities. When, in fact, net metering policies create a smoother demand curve for electricity and allow utilities to better manage their peak electricity loads.