“…The economic benefits of net metering actually outweigh the costs and impose no significant cost increase for non-solar customers. Far from a net cost, net metering is in most cases a net benefit—for the utility and for non-solar rate-payers.”
You may have heard an endorsement like this before from renewable energy advocates and representatives of solar installers. But those words didn’t come from SolarCity or from the Solar Energy Industries Association (SEIA) – they came from the Brookings Institute, one of the country’s most respected nonpartisan think tanks.
Net metering has significantly contributed to the growth of the solar industry. When the State of Nevada eliminated it, new installations decreased by 92 percent in a single quarter. Changes to the policy in other states (like Hawaii) have also led to a reduced rate of rooftop solar installations. But not everyone agrees that net metering is the right way to value solar. Some stakeholders claim that, because solar homeowners don’t pay for transmission and distribution costs, net metering shifts costs onto electricity customers who don’t have solar panels. On the other hand, some assert that the environmental and health benefits of solar and the distributed nature of solar power offer financial benefits that go beyond the cost of electricity.
Seeking to answer this question once and for all, the Brookings Institute evaluated the conclusions of a series of state-level studies that explored the costs and benefits of installed solar energy. Their overall finding: “while the conclusions vary, a significant body of cost-benefit research conducted by PUCs [public utilities commissions], consultants, and research organizations provides substantial evidence that net metering is more often than not a net benefit to the grid and all ratepayers.”
The value that solar adds to the electric grid varies depending on location, but it is almost always a net positive. These are just three examples cited in the report:
- A 2015 study commissioned by the Maine Public Utility Commission in 2015 put a value of $0.33 per kilowatt-hour (kWh) on energy generated by distributed solar – $0.20 more valuable than the electricity generated from Maine’s utility companies.
- In 2014 Minnesota’s Public Utility Commission found that the value of solar was at $0.145 per kWh – $0.03 more valuable than the retail rate.
- A 2014 study commissioned by the Nevada Public Utility Commission itself found that net metering provided $36 million in benefits to all NV Energy customers, and estimated a net benefit of $166 million over the lifetime of solar systems installed through 2016.
The report goes on to make suggestions about how to design programs that are beneficial to both system owners and utilities. The key takeaway: “States need to rigorously and fairly evaluate the costs and benefits posed by net metering, grid fees, and other policies to shape a smart, progressive regulatory system that works for all of the stakeholders touched by distributed solar.”