Study: Mississippi would benefit from net metering

Dive Brief:

  • The benefits of implementing net metering for solar PV in Mississippi outweigh the costs in all but one scenario, according to a study from research and consulting firm Synapse Energy Economics
  • The report found distributed solar can help avoid significant infrastructure investments, take pressure off the state's oil and gas peaking resources, and put downward pressure on rates. 
  • But increased penetrations of distributed solar will also likely mean lower revenues for utilities in the state. The report suggests that the state investigate Value of Solar Tariffs (VOST) and other alternative valuations to guarantee the costs and benefits of solar PV are spread equally over the consumer pool and do not harm the financial health of utility companies. 

Dive Insight:

43 states and the District of Columbia have net metering policies for rooftop solar installations, but Mississippi is not one of them. Synapse was brought in by the the state Public Service Commission to evaluate the impacts of instituting a net metering policy.

The research and consulting firm analyzed a variety of scenarios involving the cost of conventional resources, transmission and distribution, energy and capacity markets, system losses, and other cost points. It found that in nearly every scenario net metering's benefits would outweigh the costs. Synapse analyzed the impacts of installing rooftop solar equivalent to 0.5% of the state's historical peak demand.

Synapse found solar to be worth the cost in both mid- and high-cost scenarios 
 

But the report contains a warning for utilities. Under 0.5% penetration, distributed solar would decrease revenues for the state's utilities, especially because net metering participants would need to be compensated at a rate beyond the variable retail rate in order to finance solar installations. Synapse suggests that Mississippi investigate Value of Solar Tariffs and other alternatives.

"Net metering customers should be paid for the value of their distributed generation, but non-participants should not bear an undue burden as a consequence of net metering," the report's conclusion states. "This could be accomplished by compensating net metering customers at the avoided cost rate through a tariff structure."

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