To understand the Big Fight over Net Metering, you must understand that some utilities favor solar power to the point of assisting its growth, while others do not. Read more about that here (March, 2015) here, here, here, here and here. The fight is over the value of solar to utilities, and that value (analysis updated here) is reflected in Net Metering. For ways in which utilities can grapple with the economics of such "load defection," click here and here, and note the "net benefit" studies cited here.
Stop and learn what is Net Metering. Here's a video on it. See also this April, 2014 column, this excellent March 25, 2014 column, this March 17, 2014 column, this September, 2013 article and this May, 2013 piece on it, plus this, and finally, this March, 2015 "follow the money" analysis.
A key concept: Value. It's indisputably a political term. This fellow says net metering is just another way for solar homeowners like me to pick my neighbors' pockets. Indeed, he contends here that it's all part of a multi-level, gross government interference in the free market for energy, one that results in greenies directly and indirectly picking non-greenie pockets. In my own state, Georgia, Georgia Power agreed (in November, 2013) to drop its request for a special "solar fee" to bill to array owners.
Here's a December, 2013 follow-up story on that. This March, 2015 piece contends just the opposite -- that rooftop solar's a net benefit because it spares utilities peak-load energy costs. Wisconsin's debate on this is described here. A judge in that state invalidated a special fee imposed on solar powered users. And here's an Edison Electric white paper warning of distributed solar power's "market disruptive" effects (scroll to its "Summary" at the paper's end, where it indirectly calls for taxing solar PV customers to counteract "cross-subsidization" by non-PV customers and each utility's investors). Standard utilities are now starting to express long-term worry about rooftop solar's success (see also this and this, plus this piece on the growth of anti-solar taxes and fees). This January, 2015 essay is particularly thoughtful and persuasive. And this February, 2015 proposed Indiana legislation, proponents claim, would try to "strike the right balance" between solar and utility economic interests. March 11, 2015 update: That proposed legislation was just withdrawn. (Source). Florida is going through the same debate according to this WSJ, Feb, 20, 2015 piece, which also sports a map showing which states have the most solar power online, and also which permit third parties to compete with utilities.
But first, stop and grasp what is Net Metering, or Net Billing (as opposed to a Feed-In-Tariff, explained here). For starters, note that the terms Net Metering and Net Billing have been used interchangeably:
"Net billing involves only one meter and one net transaction. Under net billing, the [solar power customer, or "cogenerator"] produces power primarily for the owner's needs. However, at times the [cogenerator] generates 'excess' power which is supplied to the utility through the single meter. Other times, the [cogenerator] may not generate sufficient power for the owner's needs and [it] draws power from the utility through the single meter. Electricity flows through the meter in both directions and is netted out and one meter reading [is] made at the end of a billing period." MidAmerican Energy Co., 94 F.E.R.C. ¶ 61,340, at 62,262 (2001) (order denying request for declaratory order) (citation omitted). The term "net metering" has been used to describe the same process. See FirstEnergy Corp. v. Pub. Utils. Comm'n, 95 Ohio St.3d 401, 768 N.E.2d 648, 650 (2002) (defining "net metering" as " 'measuring the difference in an applicable billing period between the electricity supplied by an electric service provider and the electricity generated by a customer-generator which is fed back to the electric service provider' " (citation omitted).
Windway Technologies, Inc. v. Midland Power Co-op., 696 N.W.2d 303,304-05 (Iowa 2005).
The explanation can get pretty complicated, so here's another video explaining "Net Metering." It gets complicated because it is a controversial topic, as described here, here, here, and here ($100/month fee proposed) plus here and here. In my own state (Georgia), Georgia power wants to impose a special grid-maintenance fee on solar power producers. (Source). And an Arizona utility was caught secretly funding out-of-state, anti-net-metering propagandists.
What's all that about? Basically, utilities want to pay a fair market price for solar but also want solar-providing customers to pay their share of the grid cost and not constructively pick the pockets of non-solar ratepayers. (Source).
The most common argument that I've faced is that it's not fair for Solar PV ratepayers to "free ride" their local utility (by zeroing out or negativing their power bills) while everyone else must pay. What if, these folks ask, everyone went solar and no one paid, thus revenue-starving the utility to death? Here's an answer I posted online:
Here's my grid-operator friend's take on it (he incorporates the concept into a larger discussion of solar's value):
This October, 2013 article, by the way, touts California's overall solar program as a success thus far. Here's the latest ruling (March, 2016) in that California "net metering" struggle. (Note that in October, 2013 the state passed legislation uncorking its net metering bottle and upping its goal to 33% renewable energy by 2002. (Source)). Arizona, meanwhile, is seeing a big fight over minimum fees to charge solar residential customers. This 2015 lawsuit by a PV maker is particularly interesting, in that the maker accuses a "solar-fee" imposing utility of anti-competitive conduct.
And for news on the big fight over net metering in Florida, click here.
Anyway, Georgia law calls Net Metering "Bidirectional Metering." O.C.G.A. § 46-3-52(1) ("'Bidirectional metering' means measuring the amount of electricity supplied by an electric service provider and the amount fed back to the electric service provider by the customer's distributed generation facility using the same meter") (emphasis added). And O.C.G.A. § 46-3-52(5) defines people like me (grid-tied, rooftop solar array owners) as the owner of a "Distributed generation facility":
(5) "Distributed generation facility" means a facility owned and operated by a customer of the electric service provider for the production of electrical energy that:
(A) Uses a solar Photovoltaic system, fuel cell, or wind turbine;
(B) Has a peak generating capacity of not more than 10kw for a residential application and 100kw for a commercial application;
(C) Is located on the customer's premises;
(D) Operates in parallel with the electric service provider's distribution facilities;
(E) Connected to the electric service provider's distribution system on either side of the electric service provider's meter; and
(F) Is intended primarily to offset part or all of the customer generator's requirements for electricity.
Georgia law requires Georgia utilities and electric cooperatives to buy excess power from Solar PV producers like me, though it leaves the "net metering" term undefined and thus each utility or EMC gets to negotiate with you how much it will pay you for your excess power. But Georgia law limits how many producers like me can line up for that deal. Here's some political perspective on that point elsewhere. This, too (covers the creation of two opposing classes of ratepayers, those with solar, and those without, and note that in the Fall of 2013 Georgia Power began pushing for an add-on fee just for Solar customers).
As of November, 2010, net metering was offered in 43 states, Washington, D.C., and Puerto Rico (see map of state net metering rules from DSIRE). For a more detailed description of state net metering policies and links to the authorizing legislation, see the DSIRE database, which is a project of the Interstate Renewable Energy Council funded by the U.S. DOE and managed by the North Carolina Solar Center. (Source).
Here's how Californians explain "Net Metering" (note the full retail rate payments). Here's a later post on it. This, too. And here's a July, 2013 NYT article on how net metering figures into the "existential threat" to utlities -- with a discourse on the California scene. Note this earlier take, by blue-state greenie group, on the California net metering controversy regarding Sand Diego Gas & Electric's proposed special charge on Solar PV producers. Here's a later article on that, too. 5/24/12 -- California's Net Metering Decision passed (cleaner version here), and it's explained here. 6/11/12 -- This piece nicely captures the varying views on net metering, what the rate should be, the accounting angle to it, etc. 12/12: California's "Net Metering" true-cost controversy discussed here, as rebutted here. January, 2013: California Net Metering analysis. Here's the actual report.
April, 2015: Connecting your PV system to the local grid should be as easy as getting cable for your home. (Source)
May 2014: Homeowners blocked from tying to the grid -- "circuit's full." (Source)
December, 2013: An effort to charge "free-rider" Solar power homeowners, rather than pay them, for backfeeding their power into the grid. (Source).
November, 2013: The net metering fight is getting downright nasty in Arizona, fostering Tea Party alignment with greenies.
October, 2013: Utilities, including Georgia Power, want to charge Solar PV producers like me to offset the lost revenue I represent. (Source) (Source). I asked my friend PhotoMofo to respond to that WSJ article. Here it is:
September, 2013: A Net Metering fight in Arizona
Here's a February 25, 2013 article advocating no caps on net metering.
January, 2013: The debate over Net Metering benefits and costs. Here's my grid operator friend's take on the "Vote Solar" study's position within that debate:
Here's a piece that asks, "Is Net Metering for Solar Power a Subsidy?" Here's a May, 2013 piece on utility company resistance to net metering. And here's a July, 2013 NYT article on how net metering figures into the "existential threat" to utlities -- with a discourse on the California scene.
Here's another (June, 2013) Net Metering article encapsulating the cost-allocation debate that makes Net Metering so controversial, and here's my grid operator friend's June 11, 2013 response to it:
Here's a website that discusses smart-appliance-grid management.
Here's a "net metering" video that doesn't bother to answer any of the economics questions that go with it (e.g., should those who feed excess power into the grid pay anything at all toward the grid's construction and upkeep costs?).
Here's a Massachusetts effort to deal with the net metering question. 8/6/12: It's governor signed new net metering legislation.
Net metering is tied to Feed-In-Tariff rates, which I discuss here, and also in my "Germany Watch" page where I'm collecting on German's Solar PV efforts, especially its much-debated FIT policy, as extensively described here, here and here, and I invite readers to share with me research on it. Net metering is part of a larger picture, that of tying solar power into the national grid.
The Germans, by the way, are world leaders in things solar, and thus will be cutting new paths in this sector. Here's a January, 2013 policy twist that may spread outward and dramatically affect solar power producers worldwide:
(Source). Catch that? "Real time" would mean hey, don't just erect solar arrays and plug them into the grid. First, assay the need for your solar-generated electricity in your part of the nation's power grid, and then construct your array. Or rather, the local utility may do that and offer you a reverse-meter credit rate based on what it needs, and not simply by what your array will produce. That effort would be part of Germany's bid to more efficiently deploy and integrate variable renewable power, which is precisely what solar power is -- until someone comes up with cost-feasible electricity storage.
October, 2013: Michigan's Net Metering Policy
June, 2013: New York's Net Metering Policy
Check out Brazil's Net Metering policy.
Here's an organization with pretty cool graphics -- they "grade" states on their FIT policies. Here's their summary of Georgia's policies (they give Georgia an "F"). Here's a follow-up by that org.
I also discuss Net Metering, vis-a-vis Feed-In-Tariff policies, here. Check out this map on grid-parity pricing.
Contact me: email@example.com