Californians Get Great Benefits from Solar Net-Metering

The ability to sell excess solar back to the grid, known as net-metering, results in over $92 million in annual benefits to California ratepayers, says Vote Solar.

Under net metering, residences or businesses that have solar systems "run the meter backward" – sending any energy they don’t use back to the local grid, and get paid for that as credits on utility bills. It’s considered a key driver for expanding small solar, but is sometimes criticized because the amount of the credit varies widely across states.

Because California’s utilities have been increasingly critical of net metering, claiming it unfairly shifts costs to people that don’t have solar, Vote Solar commissioned a study on that.

They found the utilities’ analysis to be inaccurate because it assumes customers always receive credits at the highest rate tiers, but in fact, the opposite is true. And their calculations overstate the amount of solar energy being sent to the grid by as much as 80%. 

Vote Solar’s research concludes that when California’s net-metering program is fully subscribed, it will have a value of more than $92 million a year for all ratepayers. 

That’s because the state as a whole will benefit from: savings on expensive, polluting conventional power; fewer investments in transmission and distribution infrastructure; less electricity lost through power lines; and savings on the cost of meeting carbon reduction and renewable energy requirements.

"When someone decides to put solar panels on their roof, they not only generate clean power, but also reduce strain on the electric grid while offering financial benefits to all ratepayers," says Adam Browning, Executive Director of Vote Solar Initiative. "We’ve got a long way to go in revamping an antiquated energy grid and growing California’s clean economy, and net metering is critical to those efforts."

Solar, of course, also provides environmental, public health and economic benefits. Net-metering is one of the policies that’s spurred solar jobs in California, now employing over 43,000 people, while attracting over $10 billion in private investment.

"The good news is that net metering is doing what it was designed to do – accelerating solar adoption while reducing our dependence on dangerous fossil fuels and kick-starting one of the most promising job-creating industries of the 21st Century," says Daniel Kammen, University of California Berkeley Distinguished Professor. "Solar produces energy at the times of highest cost to the utilities, so with the right market incentives, it is a simple ‘win-win-win’ for ratepayers, utilities, and the environment."

Solar adoption is increasingly important for school districts and public agencies that are struggling with steep budget cuts. The energy savings are freeing up funds to retain teachers, educational programs, and important government services. Over the next 30 years, schools and public agencies will save more than $2.5 billion on energy bills via net-metered solar systems, finds Vote Solar.

California’s net-metering program is currently capped at 5% of non-peak load, or approximately 5.2 gigawatts. If it isn’t renewed, it is scheduled to end December 31, 2014.

The state now has 1400 megawatts of solar PV operating on 134,000 homes and businesses. Net-metering is a core public policy that has enabled this success. 

To keep distributed solar growing in California, the cap on net-metering should be removed, says the Interstate Renewable Energy Council (IREC) in a new report.

"Blueprint for the Development of Distributed Generation in California," also pushes for community solar to give access to people that don’t have suitable rooftops, streamlining the permitting process statewide, and assessing the state’s grid so that distributed generation can be targeted where it will do the most good, such as reducing the need for new transmission lines.

Here is Vote Solar’s report:

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