Monday, July 06, 2009

The Future of Net Metering

Solar power might not receive subsidies of "ethanol proportions," but it certainly does get its share of government largesse. One perk, however, might be set to expire: net metering.

Individuals who install solar panels get to sell excess power back to utilities at retail rates. This credit often wipes out nearly or entirely a monthly utility bill. It's a great deal for solar users, but, detractors argue, not so much for other utility customers.

The argument against net-metering is that it unfairly shifts costs from solar users onto non-solar users because the utilities are using ratepayer money to compensate the solar users, and they are doing at the retail power rate, not the actual cost of solar power which is much, much lower.

The net result is that solar customers end up paying little or nothing and non-solar customers end up paying not only for power, but for all of the other costs buried in their monthly bill, like infrastructure costs and regulatory fees.

The Los Angeles Times reports today that the net metering program has almost reached its legislated limit and could expire unless the program is expanded: "utilities are limited by state law from buying from its customers more than 2.5% of a utility's maximum generating capacity" and "the state's $3.3-billion solar subsidy program has become so popular that the state utilities are approaching the legal limit for how much power they can buy from customers."

Assembly Member Nancy Skinner has introduced AB 560 that seeks to increase the cap on net metering fourfold. All of the major utilities oppose the measure, citing cost shifting issues and basic consumer fairness.

In addition to net metering, solar users also enjoy state and federal tax credits.