Brookings: Net metering is a net benefit for utilities and all ratepayers
- A new report from the Brookings Institution said net metering benefits all parties when every cost and benefit is factored in, and doesn't significantly shift grid maintenance costs to non-rooftop solar customers.
- While the report acknowledged there are "legitimate" cost recovery issues linked to net metering and a good rate design is often complex, a growing number of studies from different entities show the overall benefit out-weighs negative effects.
- Researchers from Brookings evaluated reports from utility regulatory bodies, national laboratories, academic and think-tank studies, including notable solar valuation studies from Maine and Nevada.
Just what is the sun worth? That's the linchpin where all these rooftop solar debates are circulating, and now another report seeks to quantify previous studies to find the answer, but more specifically, the pros and cons of the net metering policy.
At its heart, net metering is a policy giving rooftop solar customers bill credits — usually at the retail rate — for the excess energy they export to the grid.
Most states with such a policy put it in place to incentivize distributed solar and increase renewable energy. But the swift growth of rooftop solar in many regions has pushed regulatory bodies to come up with alternative incentive structures to compensate solar customers without shifting costs to the rest of the rate base.
These debates are playing out in high-stakes states like California, Nevada and Arizona to name a few. Now a new report has taken a holistic approach to several studies emerging in these debates, and found the policy's overall benefits out weigh the negatives for utilities and non-solar customers.
"Net metering... frequently benefits all ratepayers when all costs and benefits are accounted for, which is a finding state public utility commissions, or PUCs, need to take seriously as the fight over net metering rages in states like Arizona, California, and Nevada," the researchers wrote in their blog post about the study. "Regulators everywhere need to put in place processes that fairly consider the full range of benefits (as well as costs) of net metering as well as other policies as they set and update the policies, regulations, and tariffs that will play a critical role in determining the extent to which the distributed solar industry continues to grow."
Even so, net metering has been called a blunt instrument by its critics, one that could use improvement as more distributed energy resources make their way on to the grid. Greentech Media noted the net metering policy debates underscore the difficulty of finding nuance in a rate design for all technologies.
The Brookings researchers noted regulators should view "net-metering policies.. as an important tool for encouraging the integration of renewable energy into states’ energy portfolios as part of the transition beyond fossil fuels" until "broad changes are made to the increasingly outdated and ineffective standard utility business model."
"To that end, progressive regulators should explore and implement reforms that arrive at more beneficial and equitable rate designs that do not prevent solar expansion in their states," the researchers concluded.
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