Perspectives

White Paper

Recent Net Metering Regulatory Activity and Upcoming Decisions

December 2013

The Net Metering Debate Continues

 

Net metering is an incentive created to promote the installation of distributed scale renewable energy, primarily solar photovoltaics (PV), by creating an accounting mechanism to provide credit to customers for electricity that moves from their premises to the grid. All but seven states have established specific net metering programs. Among those seven states, Idaho, South Carolina, and Texas, have directed their investor owned utilities to implement some form of net metering program. The other four states, South Dakota, Mississippi, Tennessee, and Alabama, have not developed state programs nor directed specific actions to electric service providers. However, some electric service providers have independently developed their own programs in these states.

The mechanism itself is simple and readily implemented into most billing systems. When a solar customer can consume the system’s full production, the meter rolls forward, albeit more slowly than it would without solar. However, if there is more production than consumption, the meter tracks the volume of electricity flowing onto the grid. At the end of the billing period, the volume of electricity consumed reflects both directional flows. It is possible for the customer to have zero net consumption. The bill is then calculated with the lower level of net consumption. The programs often set minimum bills and role excess credits into the next month.

Net metering is a key topic for electric utilities and central to the debate on the role of distributed generation. The main question being debated by utility and solar advocates within commissions and legislatures is whether net metering shifts grid costs from away from solar customers and onto non-solar customers. Bridge Strategy Group believes there is a cost shift that imposes material costs on non-solar customers.

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