Monday, May 27, 2013

Net Metering: A Net Positive

There’s been a lot of talk lately about net metering. What’s so special about net metering, and why all the fuss?

Net metering is a simple concept that’s policy in 43 states. It’s like rollover minutes on a cell phone bill -- it lets utility customers who install solar systems feed energy they generate into the grid if they don’t need it at the time they’re generating it. They get the fun of watching their meter run backwards, and they get a  credit on their power bill for that excess energy, which they can use when the sun goes down. The question, though, is what constitutes fair credit, and whether net metering customers are passing on to other customers an unfair burden of transmission and distribution charges.

As you can imagine, perspectives on this issue vary. Some are predictable, others not so much.

The utility death spiral

Let’s start with utilities, who are on the predictable end of the spectrum. After all, when utility customers generate their own power, those customers end up paying a lot less to the utility. And utilities are set up to make substantial profits from large infrastructure investments. Net metering poses a threat to that business model.

This threat has been getting a lot of attention. One of the most thoughtful writers on the subject, David Roberts, says of utilities’ “path to obsolescence,” “From the utility’s point of view, every kilowatt-hour of rooftop solar looks like a kilowatt-hour of reduced demand for the utility’s product.” And that’s not just any product: because solar panels produce the most at peak rate times, solar reduces demand for a utility’s “most valuable product.

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