Net Metering

Distributed solar energy is growing at an exponential rate with 80,000 homes in the US installing solar panels last year, raising the total to 270,000 homes. This rate is set to continue as solar energy prices keep going down and fossil fuel prices become more and more expensive (not considering the temporary decrease in NG prices). Utilities are going into a tizzy around the world, as the rapid expansion in solar energy is threatening their business model.

Now utilities are trying to fight back by attacking the very foundation of the distributed solar home model by trying to charge them for the net metering service. Note net metering is now found in most US states where you can gain a credit for supplying the grid with excess solar energy that you generate. This turns your electricity meter backward and you only pay for the net electricity that you consume. Utilities want homes with solar panels to pay an annual grid fee for this facility. They argue that using the grid as a giant battery should entail a fee as their lower power consumption has to be paid by other non-solar users.

Read more about Net Metering and Importance of Solar Net Metering.

Net Metering Charge

However, this is a bad argument as countries like Germany have successfully implemented this scheme on a far bigger scale without imposing any fee. The increase in solar generation reduces the need for huge fossil fuel carbon emitting power stations and the massive transmission networks. As energy storage becomes cheaper, people will not need the grid at all. Utilities are in between a rock and a hard place right now. They cannot effectively fight the winds of the technology change. These fights won’t really help them in the long run as solar systems become cheaper and cheaper. Virgina has managed to burden solar home owners with a fee, while California and Arizona are thinking about it.

I don’t think they will change things in the long run even if these regressive regulations are implemented as the utilities are quite powerful amongst the PUCs. USA government needs to make it a universal free service and compensate the utilities for their grid. Note large amounts of solar power will reduce US reliance on fossil fuel imports and help in fighting global warming as well.

Seattle Times

Details vary slightly in the 43 states (including Washington) that have adopted net energy metering, but the basic arrangement works like this: A homeowner installs solar panels on the roof. On sunny days, particularly at midday, those panels can generate more electricity than the home needs. The excess automatically spills back onto the electrical grid and is distributed to nearby homes, causing the solar home’s electricity meter to spin counterclockwise. The electricity generator is credited for providing the power and pays less overall than a traditional utility customer.

Arizona Public Service, which has 18,000 rooftop solar systems among its 1.1 million electricity customers, estimates solar homes each shift about $1,000 in costs annually to other ratepayers. “This is not a revenue issue. This is not a profitability issue. This is a shifting-of-costs issue,” said John Hatfield, the company’s vice president of communications. The company will submit a proposal in July to the state’s regulator, the Arizona Corporation Commission, to alter the current system.

The new technology “is a threat to their business model,” said Carrie Cullen Hitt, SEIA’s senior vice president for state affairs.One possible alternative is to charge solar customers for the right to have the utility’s services available whenever they need it. That “standby charge” went into effect two years ago in Virginia, where just 833 of Dominion Virginia Power’s 2.3 million customers take part in net metering and only five produce enough power to pay the charge. “The only reason the utilities are picking this fight is because they know that in the very long term, we’re going to compete with them and we’re going to win,” Fenster said.