Brookings Makes the Case for Net Metering

Net metering isn’t just good for solar consumers – it’s good for everyone. That’s the conclusion of a new study from the Brookings Institution, which, after reviewing evidence from around the country, found that net metering is a net benefit to the grid and to electric customers. 

Gideon Weissman

Former Policy Analyst, Frontier Group

Emission-free rooftop solar is more efficient and less expensive than ever, and is booming in the U.S. Smart state policies are helping drive rapid solar energy growth – and one of the most important policies is net metering, which credits solar panel owners for the electricity they produce at the full retail rate of electricity, allowing solar owners’ electric meters to spin backwards when they feed electricity back into the grid.

It turns out, however, that net metering isn’t just good for solar consumers – it’s good for everyone. That’s the conclusion of a new study from the Brookings Institution, which, after reviewing evidence from around the country, found that net metering is a net benefit to the grid and to electric customers.

Brookings cited our summer 2015 report, Shining Rewards: The Value of Rooftop Solar Power for Consumers and Society, which surveyed 11 analyses of rooftop solar and found that net metering generally undervalues rooftop solar power. That’s because rooftop solar power provides a number of important benefits to the grid, including avoided costs of generating electricity and building new power plants, savings on long-distance transmission and distribution, reduced exposure to volatile fossil fuel prices, and avoided environmental compliance costs. Those benefits are in addition to the well-known environmental benefits of solar energy, such as cleaner air and reductions in global warming emissions.

Net metering may benefit consumers and the grid, but it scares many utilities, who fear a “death spiral” in which fewer and fewer people pay a greater and greater share of the cost of maintaining the grid, eventually leading many consumers to abandon the grid entirely.

Concerns about a utility death spiral are almost assuredly premature, but the rapid growth of solar energy should lead us to develop tools that continue to ensure that people who install solar panels are compensated fairly for the benefits they deliver to society, while also ensuring that we retain access to a reliable, smart and efficient grid that can serve as a platform for an eventual transition to 100 percent renewable energy.

Net metering continues to be the fairest and most effective such tool – especially given the tremendous benefits every new solar panel delivers to society and our environment. Utilities, environmental advocates and consumers should see it as a high priority to ensure that any new options for compensating solar customers build on net metering’s track record of success in moving us to a cleaner electricity system.

Authors

Gideon Weissman

Former Policy Analyst, Frontier Group