Ironically, Consumers Losing as Net Metering Hits the Big Time

When large corporations and their industry trade associations and investors start fighting to discredit and derail a new technology, you know that technology has reached the big time. So it is with solar.

The solar program most under fire is Net Metering. The U.S. government may have recently extended the solar Investment Tax Credit for three years, but without Net Metering, the country’s adolescent solar industry could soon be on life support.

Government-regulated, often publicly traded utilities around the country, supported by the Edison Electric Institute and the American Legislative Exchange Council (ALEC), are waging war against solar in attempts to preserve the utility monopoly business model – in other words, practically guaranteed profits. Sadly, their amply funded lobbyists and marketing machines are better organized than the disparate factions of the fledgling solar industry, so they are winning this war. David and Goliath anyone?

How bad is it? Nevada utility regulators recently introduced a monthly charge on customer bills, added fees for going solar, and reduced the Net Metering rate. Now, solar projects only make economic sense if they are utility-scale. So utilities can continue to benefit from solar, but small businesses and individuals can’t. Soon after the announcement, installers SolarCity and Sunrun announced their departures from the state. Solar in Nevada is, in effect, dead on arrival.

Closer to home in the Northeast, we have a spectrum of Net Metering policies that improves as you head south. If you start in the north with Maine and New Hampshire, the future of Net Metering is in serious jeopardy. In New Hampshire where the Net Metering caps have been reached, stalling or killing future projects, local installer SunRay was forced to lay people off.

Heading south, Massachusetts – traditionally a solar leader – is sinking into the quagmire of Net Metering uncertainty while legislators haggle over competing solutions. While they haggle, cities and towns with stalled solar projects lose money, and more jobs disappear.

Connecticut and Rhode Island are forging full steam ahead with strong gubernatorial and legislative support for solar, and generous solar programs in place. And New York is setting the standard, having waived its Net Metering caps completely to focus on re-writing the utility business model.

What does all this mean? It means we have a big policy mess on our hands, nationwide. Thankfully, those who understand solar — be they individuals who installed solar on their homes, or solar installation company leaders, or elected officials — are increasingly being heard. One very informed individual I interact with in my role as Treasurer of the Solar Energy Business Association of New England (SEBANE) says the grassroots outpouring of public support for solar in Massachusetts is the biggest such effort he’s ever seen, and it’s the reason a bad solar bill hasn’t already been passed here. Let’s hope that if the groundswell continues to grow, it becomes the reason a great bill is passed in the end.

The falsehood utilities are propagating — that people who don’t have solar are subsidizing those who do — has never been backed up. What has been backed up with actual data is the certainty that solar benefits everyone, from both financial and health perspectives. Studies in Maine, Massachusetts, Mississippi, Missouri, Nevada, New York, Texas, Vermont and Wisconsin confirm that solar provides a net benefit to society and individuals, even those who don’t have solar. The value of solar is substantially higher than what utilities pay solar owners for electricity they send into the grid. So (pardon the double negative) not only is solar not costing utilities money, utilities are under-compensating solar owners for the power they generate.

What’s included in solar’s value in these calculations? The reduced need for utilities to upgrade and build new lines and facilities, the provision of electricity during peak demand time (sunny afternoons) when it’s traditionally most expensive for utilities to buy, reduced strain on the electric grid, and increased fuel diversity. All of these have real dollar values to utilities. Because these benefits lower costs for utilities, theoretically they should lower prices for all ratepayers.

U.S. lawmakers have acknowledged this “value of solar” in a recent move to protect Net Metering and solar consumers. Last week, Senator Harry Reid (D-Nevada) and Senator Angus King (I-Maine) filed an amendment to a pending energy bill, which would require state regulators to factor the benefits of solar into the equation before changing Net Metering policies. It’s no coincidence that this amendment was filed by senators from Nevada and Maine, where Net Metering is under attack.

State versus federal control can be controversial, but this is a case where I cheer federal intervention as it will protect existing solar owners from Net Metering policy changes that stomp on the investments they have made. It will support the continued growth of solar, putting more money in the pockets of homeowners and helping the planet. It will ensure regulators focus on the public good, not utility interests. (As many of them do. But when it comes to Nevada, you be the judge.)

By doing these things, the amendment will support the development of a clean energy economy in America. And isn’t that what we all want?

 

Show your support of the federal amendment to protect Net Metering and encourage more solar by sending your senator an email of support using this template. 

 

For an introduction to Net Metering, check out this excellent article, or this one, or this one.