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  • Writer's pictureRon Magby

How Net Metering Benefits Solar Customers and Why Utilities Want to End It

Updated: Jan 17

Net metering is a policy that allows solar customers to sell their excess electricity to the grid and receive credits on their utility bills. This way, they can offset their energy costs and reduce their dependence on fossil fuels. Net metering is widely seen as a key incentive for rooftop solar adoption, as it makes solar more affordable and attractive for homeowners and businesses.

However, not everyone is happy with net metering. Some utility companies are lobbying to change or eliminate net metering, arguing that it is unfair and unsustainable. They claim that net metering shifts costs from solar customers to non-solar customers, who have to pay more to maintain the grid and subsidize the solar generation. They also claim that net metering erodes their revenues and profits, as they lose customers and sales to solar.

But are these arguments valid? Let’s take a closer look at the benefits of net metering and the flaws of the utility’s claims.

The Benefits of Net Metering

Net metering is not only good for solar customers, but also for the grid, the environment, and the society. Here are some of the benefits of net metering:

  • Net metering reduces greenhouse gas emissions and air pollution by displacing fossil fuel generation with clean and renewable solar energy. This helps mitigate climate change and improve public health.

  • Net metering enhances grid reliability and resilience by diversifying the energy mix and providing distributed generation. This reduces the risk of blackouts, brownouts, and grid failures caused by extreme weather, natural disasters, or cyberattacks.

  • Net metering creates jobs and economic growth by stimulating the solar industry and supporting local businesses. According to a report by The Solar Foundation, the U.S. solar industry employed over 230,000 workers in 2020, and generated over $25 billion in economic activity.

  • Net metering empowers consumers and promotes energy democracy by giving them more choice and control over their energy sources and costs. This fosters energy independence and innovation, and challenges the monopoly and dominance of the utility companies.

The Flaws of the Utility’s Claims

The utility companies’ arguments against net metering are based on flawed assumptions and misleading calculations. Here are some of the flaws of their claims:

  • The utility companies overestimate the cost shift from solar customers to non-solar customers. They ignore the fact that solar customers also pay fixed charges and fees to the utility, and that they provide valuable services to the grid, such as peak shaving, voltage support, and congestion relief. A study by the Lawrence Berkeley National Laboratory found that the net benefits of net metering outweigh the net costs in most cases, and that the cost shift is negligible or even negative in some scenarios.

  • The utility companies underestimate the value of solar to the grid and the society. They only consider the wholesale price of electricity, which does not reflect the true value of solar. A study by the Environment America Research and Policy Center found that the value of solar ranges from 7.6 cents to 38.4 cents per kWh, depending on the location, time, and method of calculation. This is much higher than the average retail rate of 13.3 cents per kWh that solar customers receive through net metering.

  • The utility companies resist the inevitable transition to a clean and distributed energy system. They are trying to protect their outdated and centralized business model, which relies on large-scale and fossil-fuel based generation. They are unwilling to adapt to the changing needs and preferences of the customers and the society, and to embrace the opportunities and challenges of the new energy landscape.

The Future of Net Metering

Net metering is currently available in 41 states and the District of Columbia, but its future is uncertain and contested. Several states have already revised or replaced net metering with alternative policies, such as fixed charges, demand charges, or value-of-solar tariffs. Some of these policies are more favorable to solar customers than others, but none of them are as simple and effective as net metering.

The utility companies will continue to push for changes or elimination of net metering, as they see it as a threat to their profits and power. However, the solar customers and advocates will also continue to fight for net metering, as they see it as a right and a reward for their investment and contribution. The outcome of this battle will depend on the political, economic, and social factors in each state and region.

Net metering is not perfect, but it is one of the best policies to support and promote rooftop solar. It is fair, simple, and beneficial for both the solar customers and the society. It is also a symbol of the energy transition and the energy democracy that we need and deserve. We should not let the utility companies take it away from us. We should defend and expand net metering, and make solar accessible and affordable for everyone.

Net Metering benefits


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