Net metering may not be the hottest topic at the backyard barbecue, unless the party is at one of the growing number of U.S. residences with a solar panel on the roof.
While mostly a sleeper of a subject, people interested in the transition to renewable energy are paying attention to. Efforts are afoot to end the practice that has helped spread solar panel installation, a change advocates fret that would hamper the switch to renewables.
Net metering — it has nothing to do with nets or meters — served as an incentive to get Americans to install solar panels by permitting them to profit by selling their excess power to the grid at retail prices. Panels are being installed in record numbers, abetted by tumbling costs as well as the net metering billing system.
The plan was originally adopted as a “subsidy to encourage homeowners and small commercial enterprises to install more solar by getting rid of the need to put a battery on the premises,” Nathanael Greene, a senior renewable energy policy analyst at the Natural Resources Defense Council, told Karma. The efforts were led by New York and California.
Large generators sell power at wholesale prices, shifting distribution costs onto utility customers who don’t have solar capacity. Small-scale solar generators are also compensated at the retail price for electricity they supply to the grid.
Residential net-metering capacity expanded from 697.9 megawatts to 9,487 megawatts between 2010 and 2017, according to the Energy Information Administration, the government agency responsible for tracking energy data.
“We don’t know what impact the removal of incentives will have on the installation of solar,” Manussawee Sukunta, an agency analyst, told Karma. “We don’t have data yet to tease this out.”
There have been dissenting voices among renewable advocates — back in 2015 a comprehensive report on the solar sector by the MIT Energy Initiative called for a move away from net-metering policies because it would lead to pushback from utilities and other customers.
The concerns about pushback have come true, and there’s been a concerted push to end net metering in much of the country.
Most states have rules requiring net metering to compensate solar customers for contributing to the grid but a growing number are phasing it out. Cost-shifting has become controversial in certain states, and there’s been a push to treat utility- and residential-scale solar the same. Michigan, Hawaii, Arizona and Connecticut are among the states where they’ve succeeded.
Hawaii’s residential solar market continues to shrink after the state ended net metering in 2015, Greentech Media reported on Aug. 7. The number of active solar companies on Oahu, the state’s largest market, dropped from 300 in 2015 to 98 last year, the Hawaii Solar Energy Association said. And in the first half of 2019, total residential PV permits declined about 5%, according to numbers compiled by local contractor ProVision Solar.
While the Hawaiian solar industry remains in the doldrums, there’s been a rebound in Arizona. Applications for residential rooftop solar installations to Arizona Public Service Co. for the first six months this year surpass 2016 levels, the last year before the utility changed the way it would pay for energy homeowners added to the grid. That comes after applications fell for most of 2018 following the Arizona Corporation Commission’s agreement to allow APS to lower the rate at which it would pay solar users for power, the Arizona Business Journal reported.
“Some utilities that feel threatened have strong armed regulators,” Greene said. “In Arizona they’ve seen it blow up in their faces.”
Net metering is under attack in Louisiana, Kentucky and Idaho. While threats mount in many places in New York made some adjustments that should provide fairer treatment for customers who add to the grid.
“If someone sees a neighbor has installed solar panels and is happy they are likely to do the same,” Sukunta said. “It might soon make sense for homeowners to store power for their own use in a battery. Battery costs are coming down, which could make this practical.”
Net metering is coming under attack from utilities that don’t want to subsidize residential solar panels. When they’ve succeeded in changing payment the result has been mixed, with some states seeing a continuing slide in solar installation while there’s been a quick rebound in others. In the long term, falling cost of solar panels and the development of new, low-cost batteries will limit the impact of the end of net metering in some states.
“We are left with a real mishmash out there,” Greene said. “These are important parts to the portfolio of solutions that we’re going to need.”