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Net metering of rooftop solar is largely net benefit, reports show

March 22nd, 2019 | By Roger Kuznia

Home solar panels on roof

One of the many benefits for homeowners in installing a solar panel system at their home is net metering, which gives solar customers retail price credits on excess energy produced by their solar systems that is sent back to the grid. In essence, net metering works much like a solar battery would, as excess energy can be stored in the grid “bank” and be pulled back off of the grid for use in times when your solar system isn’t producing enough energy, or at night, when your solar system can’t produce any.

There are some power companies that don’t offer net metering at all, as these companies argue that solar customers are not paying their fair share of costs to maintain the grid, yet still have the access to it. Then there are other power companies and their interests that have sought or are seeking to reduce the value of solar with this premise in mind.

But what is interesting is that thinking appears to be short-sighted.

How net metering produces net benefits

According to a report written by The Brookings Institution, a nonprofit public policy organization based in Washington, D.C., whose mission is to conduct in-depth research that leads to new ideas for solving problems facing society at the local, national and global level, an accumulating amount of national literature is largely in favor of net metering. From that report:

Increasingly [the literature] concludes — whether conducted by PUCs (public utilities commissions), national labs, or academics — that the economic benefits of net metering actually outweigh the costs and impose no significant cost increase for non-solar customers.  Far from a net cost, net metering is in most cases a net benefit — for the utility and for non-solar rate-payers.

The findings from some of the reports cited by The Brookings Institution are very interesting to read. One of those came from Minnesota’s Public Utility Commission. Per the Brookings report:

In 2014 Minnesota’s Public Utility Commission approved a first-ever statewide “value of solar” methodology which affirmed that distributed solar generation is worth more than its retail price and concluded that net metering undervalues rooftop solar. The “value of solar” methodology is designed to capture the societal value of PV-generated electricity. The PUC found that the value of solar was at 14.5 cents per kilowatt hour (kWh) — which was 3 to 3.5 cents more per kilowatt than Xcel’s retail rates—when other metrics such as the social cost of carbon, the avoided construction of new power stations, and the displacement of more expensive power sources were factored in.

It’s interesting to hear this MPUC study factor in the “social cost of carbon,” which is to say the carbon dioxide emitted into the atmosphere when power companies use fossil fueled sources to generate their electricity. Those greenhouse gas emissions are a known contributor to climate change. Yet power companies are still using coal and/or natural gas to generate most of their electricity, and that social cost of carbon isn’t factored in. While utility companies are making advances in using and utilizing clean energy, they’re too big to pivot quickly to generating the majority of their energy from clean energy sources anytime soon.

Home solar energy systems provide clean, renewable energy quickly

You don’t have that nimbleness issue in going solar at your home with help from Pink Energy. You can start using clean energy the moment your system is turned on, and our solar panels come with a 30-year warranty. Pink Energy sees the value in providing clean energy to customers and is proud and excited to be part of building this movement, one solar panel at a time and one home at a time. Not only are we saving customers money on their electric bills, we are doing a great thing for the environment too.

One of the final takeaways from The Brookings Institution report is this: “Regulators and utilities need to engage in a broader and more honest conversation about how to integrate distributed-generation technologies into the grid nationwide, with an eye toward instituting a fair utility-cost recovery strategy that does not pose significant challenges to solar adoption.”

We couldn’t agree more. Recognize the true value of solar, and don’t punish homeowners for using it. For more information about how you can go solar at your home and the cost of solar, please call us at (877) 4-GO-Pink, and we would be happy to speak with you.

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