And Why You Should Care About It
This question could legitimately be in our “Top Solar Questions” article, but the fact is most people don’t ask because they haven’t heard of it yet.
Net metering is kind of simple once it is explained. In essence, when you go solar your system will produce energy during the day. If you had the room on your roof, it was likely sized to produce enough energy to cover what you use in the whole year. Clearly, those two time frames don’t match so on many days you’ll produce more energy than you use. So where does that energy go? Well, if your washing machine, dishwasher, or electric vehicle aren’t soaking it up, the excess energy heads out to the grid – making your electric meter spin backward. What you get for that energy you sent to the grid is typically referred to as Net Metering. And what you get varies depending on your utility and state rules and regulations.
How Do Various States Stack Up?
If you live in New Hampshire you’re living in the state that is the King of Net Metering. That’s because in New Hampshire you get the full retail value for the energy you send out to the grid for any system up to 100 kW. That’s really great because while you can avoid paying for the electricity you use as you produce it, you’ll also get full credit for the energy you send to the grid. Thus when you pull energy from the grid during the night you’ll have full value credits to pay for it.
In Rhode Island, you also can get full value net metering, but your system size is typically limited to 125% of your “historical energy usage”. That’s not bad, but if you’ve been sipping energy historically you can’t just go and build a big system and produce a lot more energy. You’ll instead have to appeal to get a bigger system if you recently purchased say an electric car. Not terrible, but in general it makes getting a larger system a bit harder.
But if you live in Massachusetts, you can only get full retail value if your system is 10,000 watts (AC) or smaller; no matter your usage or past or future purchases. For many (most?) that really doesn’t matter. If your electric bill is south of $250 to $300 and you have the roof space, you can likely cover your entire bill with a system under 10 kW. But if your bill is higher, that 10 kW might not do the trick. Of course, you can still eliminate a very large portion of your electric bill (and carbon footprint!), but why the 10kW limit? Doesn’t that seem a bit “off base”?
What’s Up with Net Metering in Massachusetts?
In Massachusetts they have something called a “Net Metering Cap”. The net metering cap is a limit on the amount of solar generation that will receive retail payments for kilowatt-hours generated. And this cap applies to any system that is larger than 10,000 watts (AC) (or 25,000 watts (AC) if it is a commercial 3-phase electric system). So if your system is under those respective sizes you get full retail value and if it is over you get the “qualified facility” value.
This net metering cap was originally imposed in legislation at the request of the investor owned utilities many years ago. The caps have been increased a bit here and there but are currently stuck at the level set in, I believe, April of 2016. So while in one utility’s territory there is still a bit of this Net Metering Cap available, the vast majority of the state is “capped out”. Meaning, as noted above, your system can’t be any bigger than 10,000 watts (AC) unless you’re willing to live without full retail net metering.
What happens if you go over? You can still push excess energy to the grid but instead of full retail value (about 23 cents per kW hour depending on your utility) you’ll only get about 3 cents as a “qualified facility”. That’s about 13% of retail. Does it seem okay that the utility can buy energy from you at 3 cents and then sell it at 23? How can that make sense?
Oddly, one of the justifications for this is that your solar generation is costing your non-solar neighbors money because you are not paying your “fair share” of the grid. But if that were true, why isn’t it also true in states like New Hampshire?
Well in fact, New Hampshire used to have a similar cap but the legislature looked at net metering and determined that the utility’s argument, “Solar makes electricity more expensive for non-solar customers” is not true. And this view has been corroborated by multiple studies at least a dozen times across the country. (We posted a blog on one of the big studies here.)
In short, I feel certain that solar electricity does not increase the cost of electricity for non-solar owners and in fact it lowers the cost of electricity for EVERYONE! This of course just makes sense; building new power plants is expensive. That’s why the state has long pursued efforts to reduce energy demand (witness programs like MassSave for example). So if MassSave makes sense, why wouldn’t independent energy generation systems on our roofs just be a flip-side of that same effort?
What Can Mass Residents Do?
People have tried to raise the cap. In fact, last year, the Massachusetts Senate unanimously (yes everyone in the Senate, Democrats and Republicans) agreed to legislation that would change the net metering cap from 5% of peak generation to unlimited. Yes, unlimited. The bill left the Senate and went to the House.
One might expect that it would be harder to get passed in the House, but one might also think that after some negotiation the House and Senate would agree to a number somewhere in the middle. But that didn’t happen. Instead, the bill just died without ever going to a vote.
So in short, we’ve got to make a bigger effort. I therefore strongly suggest you contact your state house representative and senator. Push them to approve full retail net metering. Then share this knowledge with friends and family and ask them to do the same. After all, even if you are not impacted by the limit it limits our state’s overall ability to lower our collective carbon footprint.
We understand utilities have to pay their bills and yes, make money. New England Clean Energy needs to do the same too. But their arguments for denying full net metering don’t hold up.