25 May 2016
Net Metering’s benefits outweigh costs
That’s the conclusion of Mark Puro and Devashree Saha in their Brookings Brief today on net metering. Electric utilities, which believe everyone should be connected to, and connected only to, a big central generating plan, have spent the last few years trying, with some success, to portray both net metering and rooftop photovoltaics as socialistic schemes for destabilizing the grid and reducing the profits of investor owned utilities.
One potent allegation is that net metering will increase the cost of electricity for consumers of grid electricity who don’t net meter. An interim committee of Montana’s legislature has spent the last several months looking at that issue, considering input from investor owned utilities such as Northwestern Energy, which tends to view net metering as an economic evil based on a pink tinged political philosophy.
Dispassionate economic analysis does not, report Puro and saha, provide comfort for the Keep It the Way It Was cabal of private utilities:
Fortunately, such cost-benefit analyses have become an important feature of state rate-setting processes and offer important guidance to states like Nevada. So what does the accumulating national literature on costs and benefits of net metering say? Increasingly it concludes — whether conducted by PUCs, national labs, or academics — that the economic benefits of net metering actually outweigh the costs and impose no significant cost increase for non-solar customers. Far from a net cost, net metering is in most cases a net benefit—for the utility and for non-solar rate-payers.
Of course, there are legitimate cost-recovery issues associated with net metering, and they vary from market to market. Moreover, getting to a good rate design, which is essential for both utility revenues and the growth of distributed generation, is undeniably complicated. If rates go too far in the direction of “volumetric energy charges” — charging customers based on energy use — utilities could have trouble recovering costs when distributed energy sources reach higher levels of penetration. On the other hand, if rates lean more towards fixed charges — not dependent on usage — it may reduce incentives for customers to consider solar and other distributed generation technologies.
This brief is a good resource for political candidates, mainstream media reporters, and bloggers.
My personal view on net metering, incidentally, has been souring. If I install a photovoltaic array on my property, I’m not going to connect it to the grid. I’m going to add a battery bank and propane fueled generator for backup and winter, and get off the grid.