MD DC DE VA Solar Energy Industries Association

The Debate Over Net Metering


Oct 13


Monday, October 7th, 2013

Net metering has long been a driving incentive for consumers to purchase solar energy systems.  This billing mechanism allows solar energy system owners to be credited for electricity that is added to the grid, an inter-connected system for the distribution of electricity over a wide area.  This policy in conjunction with lowered solar panel prices has led to a huge boom in the solar industry in the last ten years.

The expansive growth in the solar sector is causing some utility companies to re-evaluate the need for net metering policies with such high capacity limits.  Utilities claim that this current structure is full of inequities that include “excessive” subsidization. They state that the current policies are one-sided because the costs of generation, transmission, and distribution on customers who do not have a source of renewable energy.  Solar developers however are fighting back, and often claim that utilities are simply concerned with maintaining an energy monopoly.  They are in favor of net metering because of its money-saving allure to potential customers, making solar energy systems more appealing to the general public.

This July, Arizona’s main electric company, Arizona Public Service, proposed a surcharge for new residential solar installations associated with how much energy they are taking from the grid.  There is another option in which customers can receive credit for the energy they out back into the grid at the same market rate the utility gives to other generators.  However, this policy has yet to be approved by the regulators.

The main motivation behind this surcharge is the fact that solar customers are avoiding certain costs that find their way onto other customers’ bills.  Since homes do not have a way to store the excess energy they produce throughout the day that are cost-effective, they still must utilize energy from the grid once the sun goes down.  Also with today’s technology, photovoltaic panels have improved efficiency and a reduced cost.

Solar energy advocates claim that utilities have always opposed net metering programs, but they are just beginning to really fight it now.  This debate puts solar energy in an interesting place in which utilities and providers may begin to come to a sort of common ground.

As a solar and alternative energy advocate, I feel that net-metering is an important incentive to influence more customers to invest into solar energy systems.  However, there are basic costs on the utility side that should not have to be absorbed by other customers.  So, I think that there needs to be some sort of middle-ground.  I think that providing customers with a credit for the energy they have added to the grid is a great example of this sort of compromise. 

-Olivia Pallissard, Solar Policy Intern, MDV-SEIA