The Case for Net Metering

Home / Net Metering / The Case for Net Metering

Residential solar power systems are usually designed so that the owner produces more energy in the daytime than they use in the daytime in order to balance out the electricity used during non-sunlight hours at night. This is the fundamental benefit of net metering – a homeowner generates extra in the daytime, which is delivered to other nearby users (typically commercial users), while getting a credit for that electricity that is then applied to their nighttime usage.

Image Source:
Image Source:

The electricity grid is one of the most under-appreciated resources in modern life. People plug in their device, or flick a switch on the wall, with the expectation that electricity will flow through and provide a result, forgetting that behind the electrify is a complicated system of machines, power lines, humans, materials and fuel, and that the settings need to be constantly adjusted. If a homeowner installs a battery system (big $$) – no complex work by experienced professionals need be done, the hardware just sits there once you install it the first time. Net metering adds yet another aspect to this, where electricity users who used to only pull energy out of the system, can now not only push that electricity back into the system, but can do so for compensation.

There is a debate. The default argument from the utilities will likely be that solar power producers should only be paid the at the same rate  as other electricity producers – the wholesale electricity price.  Remember, that the job of utilities is not only to provide electricity on their demand – it’s their job to invest in, expand, and maintain the broader grid, and to do this, they need revenue. Not just to pay the actual costs, but to provide investors with a reasonable return on their investment. Longer term, solar will have impacts that we can’t yet foresee.

We can look at Germany to see how much impact the generation electricity could potentially have on the price of electricity – (see this chart of the old vs new daytime electricity rates), but we haven’t yet been able to see a plan as how the electric grid will be managed and maintained if the company that has traditionally done so has seen their primary source of revenue dry up. This forms the basis of the argument against net metering in its current form.

Because homeowners with solar panels are able to buy and sell electricity at the same price, it is perceived that they are receiving an unfair subsidy from the power companies. After all, residential solar users generally do not use the power they actually generate – it is transported along the power companies lines to businesses who need it. Likewise, when a residential solar user turns on their television or computer at night, they are not actually using power from the solar panels on their rooftops, but instead they are receiving power from their local utility. All of this means that residential solar users are still dependent upon the power grid. That is a true and real service that needs to be accounted for. A $0 electricity bill does not mean zero services were delivered.

However – solar power generates significant benefits for the broader grid. Arguably – the benefits are greater than the cost of net metering by almost 75%. Taken to the extreme, this could mean that residential solar producers should be paid more for the power they provide than the power that they consume.

There are also many people arguing against solar power generation on the basis that solar power producers, whether residential or commercial, significantly benefit from handouts and subsidies. No one argues against fossil fuel subsidies, which benefits those producers to the tune of $5.3 trillion a year. No one considers the 1.4 million a year that die from air pollution. What about the three feet of ocean rise coming? The melting ice caps? We could go on for a while. In the end, this argument is the giant pile of big energy calling a little tiny teapot black.

Our lives are dependent on the power grid. However, our planet is dependent on the grid evolving. We see that German electricity pricing and subsidies for solar are falling as their experiment moves on. And we see that their CO2 pollution is falling as well. The same thing will be repeated around the world.

How you make your decisions about your responsibility to the future – and what you believe about technology, climate science and humanity will push you one direction or another on this issue.

John Fitzgerald Weaver has worked in the Finance and Solar fields since 2005. He is currently employed by Beaumont Solar Co. with a focus on Commercial and Utility Development. John is a hands on salesman, with a strong engineering background who got into solar power because he felt a lack of inspiration in banking:

“Solar power aligned with many needs – my interests (technology), my morals (I think solar is important on multiple species wide levels), my need for growth (there is a lot to learn in this growing industry), and my desire to be part of something important (energy is one of the most important and fundamental – if not the fundamental – of human needs). I chose the Solar Life”

If you have a solar project in mind, you can reach John at 508-990-1757 extension 209

John Fitzgerald Weaver on Twitter
John Fitzgerald Weaver
Solar Power Plant Project Developer at Commercial Solar Guy
John Fitzgerald Weaver is a solar developer, digitally as the 'Commercial Solar Guy.' As a project developer and installer, he’s sold and managed 50+ solar projects, totalling over $25 million - with their sizes ranging from 5kW to 1500kW. He’s been involved in many aspects of the solar supply chain – as a company founder, developer, project manager, manufacturer, permit runner, salesman, contractor and financier, climbs mountains, played football, enjoys an IPA or scotch, needs to get away, and really loves this strange connection between politics, energy, finance, environment, etc in the energy world, and likes run on sentences.