States should support their net metering programs to incentivize growth of residential renewable energy production and to increase grid resiliency.
What is Net Metering?
According to the Solar Energy Industries Association, net metering “allows residential and commercial customers who generate their own electricity from solar power to sell the electricity they aren’t using back into the grid.”
Net metering turns rooftop residential solar arrays into a network of decentralized power generators. Each home’s electricity usage is tracked, and production from solar is credited against consumption from the grid. If a home ends a billing cycle in surplus, it could actually receive money from the power company.
What Are the Benefits of Net Metering?
The benefits of net metering are numerous. Most obvious are the benefits to consumers. Households that have solar and are net metered can significantly reduce their electric bills. As the cost of solar installation continues to drop, the credit generated from selling electricity back to the grid more than pays off the initial investment. Solar power and net metering also provide consumers with a degree of independence from the electrical grid, since they can produce their own power.
Net metering benefits power companies, as well, by building more resilience into the grid. Utilities are able to better manage power distribution and the load on centralized power production facilities is lessened. Having residences generate power and use it on-site also reduces distribution costs and power loss from transporting electricity over long distances.
Lastly, net metering greatly benefits the environment by incentivizing adoption of solar power and other renewables. When combined with other state level policy like tax incentives, net metering can make the prospect of installing and operating a residential solar array nearly irresistible.
Why States Should Expand Net Metering
States should make a priority of enacting new net metering policies or extending existing ones. According to the Database of State Incentives for Renewable Energy, only 38 states currently have mandatory net metering laws. Some are also set to expire in the next few years. The United States deserves full coverage of net metering.
There is absolutely no reason that utilities should not be offering net metering. It is also important that customers using net metering be given close to market rate for the power they generate. Some states allow power companies to provide significantly lower rates for the power they receive while still charging retail prices for the power they provide. Of course, some difference in price is expected since utilities handle all distribution, but every effort should be made to fairly compensate residential producers.
As the country transitions towards renewables, net metering will be a valuable tool to incentivize adoption of solar and to reinforce electrical grid. States should take care to put solid net metering rules on the books. Solar power is the future, and regulations must evolve to meet it. In our semi-capitalistic electrical market, net metering is a fair, reasonable, and valuable policy that fully integrates the new reality of at-home power generation.