Solar Net Metering and Utility Company Rates: The Great Debate

The debate over solar net metering is reaching a fever pitch in the United States.

Net metering, also known as net energy metering or NEM, is a critical component of the economic equation of alternative energy. For those residential and commercial consumers who understand the value of photovoltaic energy, this topic is of great importance.

Unfortunately — but not surprisingly — the for-profit utility providers have taken up arms against the solar industry and its consumers.

What Is Net Energy Metering?

Imagine your electric meter running backward.

During the day, when your PV panel array is at its peak production, your system can generate more electricity than you can use. With net metering, you can send this excess power up the line and back to the power grid. In exchange, under an NEM agreement with the utility company, you are paid for the power you generate.

The rate and manner in which you are compensated for this power depends on the NEM agreement offered by your local power utility company. See a breakdown per state here, provided by the National Conference of State Legislatures.

Some states have imposed capacity limits, and most have established specific compensation terms that define how you can maintain and roll over bill credits.

Understanding the Controversy

Essentially, the controversy we face today concerns the threat of lost profits for utility companies and cooperatives.

As more customers generate their own (free) power with PV and other technologies, utilities investors fear lower profits. To justify rate schedule adjustments, the utilities allege that solar customers are placing undue strain on the power grid that they’re not paying for.

Research from the Solar Institute at George Washington University shows that, overall, solar customers provide a net benefit to the power grid. Naturally, the extent of this benefit varies based on location, local alternative energy penetration and a host of other factors.

Nevertheless, no detrimental impact has been scientifically demonstrated.

The Potential Impact of Future Legislation

Consumers who understand the many economic and social benefits of photovoltaic energy must make their voices heard today.

While some states (California and New York, for example) have adopted solar-friendly NEM policies, other states (Nevada) are going backward. The political climate has exacerbated this problem, as private utility companies are investing heavily to elect candidates who favor their unfair economic models.

The Solar Energy Industries Association (SEIA) offers a variety of information on how you can become an advocate for solar energy, including this advocacy toolkit. It’s time to let your local legislators and policymakers hear your voice.

For more details exercising your rights to the many benefits that net energy metering can offer you, check out SEIA’s guiding principles.

By delivering a strong message, we can ensure that lawmakers represent what’s best for us and our communities. And today, that means encouraging the cost-effective energy independence provided by photovoltaic energy.

Intermountain Wind & Solar services commercial and residential customers in Utah and throughout the Intermountain West. Contact us today to learn how solar net metering can benefit you.