New Study Shows That Net Metering is a Financial Benefit, Not Burden to Ratepayers

For years, we’ve been making the case that in addition to the environmental benefits, solar also adds value to the grid.

How much value? Today, we released a report that we commissioned to look at both the costs and benefits of net metering in California. The study was done by Tom Beach of Crossborder Energy, who used actual data from 10,000 solar systems and analytic models from the CPUC. The report found that when California reaches its current net metering cap of 5% of non-coincident peak load (at about 5.2 GW of solar), the benefits of net-metered projects will exceed the costs by about $92 million annually, across the three large investor-owned utility territories in the state. That’s a great deal for ratepayers, and good news for the planet.

Take a look. Here it is, in all its wonky glory (along with a snazzy summary fact sheet): Evaluating the Benefits and Costs of Net Energy Metering in California, Crossborder Energy, January 2013

If you want to learn more, we are hosting a webinar on Wednesday to discuss the methodology and results. Register here (we’ll also post a recording after it is done).

We are releasing this report during a time when we are seeing increasing pushback from utilities around customer-owned solar. It’s our hope that by doing so, we can contribute to a fact-based discussion on the value of solar to the state.

A couple of other thoughts on the subject:

First, we note that investor-owned utilities in the state are given a monopoly in return for serving the public good. Every utility in the state is making a profit off that monopoly. Yet, despite progress, not a single one has a procurement plan sufficient to deal with climate change. In this context, we believe that if a customer wants to use their own money to install a 100% renewable power system, utilities should be doing all they can to help, not hinder.

We’d also like to note that utilities have fought every other way for an owner of a rooftop solar system to get fair value for the power that it generates. Feed-in tariffs? Fought bitterly. How about payment for any excess generation from net metered systems? In 2009, the CA legislature passed a law (AB 920 — pdf) requiring utilities to pay “just and reasonable compensation for the value of net surplus electricity” from net metered systems that produce more than the owners load over a year. Utilities’ idea of ‘just and reasonable’? According to them, it’s day ahead market prices for brown power. We fought it, but they won — net surplus generation gets compensated at around 4 cents per kWh. For emission-free, climate-change-fighting, on-peak power delivered inside of distribution networks, right at load. That doesn’t seem like fair value to us.

So not only are the utilities attacking net metering, but they have also systematically closed all other avenues. Some call net metering ‘rough justice.’ We say rough justice is better than no justice at all.

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2 comments on “New Study Shows That Net Metering is a Financial Benefit, Not Burden to Ratepayers

[…] Vote Solar, we’re fans of actually studying this question by looking at real data (like we did in California) before coming out with an answer. That is not the plan of action that the Louisiana PSC has […]

[…] currently underway. The first is a cost/benefit analysis of net metering. We commissioned a study from Crossborder Energy that shows that at the current cap on net metering (about 5 GW of customer-owned solar generation), […]

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