Industry experts debate positives, drawbacks of net metering
While some have called net metering – allowing consumers who generate their own electricity to use that electricity at any time, not just when it is generated – a relic of a previous energy era, Dr. Charles Cicchetti of the Pacific Economics Group contends that distributed energy resources (DER) are a net benefit for the overall energy sector and rate-paying customers.
DER systems are decentralized, flexible technologies, including solar and wind power, that, through net metering, allow consumers to use solar power generated during the day at night or wind from a windy day later during the month.
Cicchetti, speaking at a debate with Ashley C. Brown of Harvard University’s Electricity Policy Group at the annual summer meeting of the National Association of Utility Commissioners (NARUC), said that the benefits of net metering are numerous.
“The first of these benefits come in the form reduced capacity in transmission distribution and generation,” Cicchetti said. “There are also important societal benefits in the form of reduced air pollution and air quality control.”
Brown, however, countered that such benefits are offset by net metering customers paying retail prices for a wholesale product, which, in turn, increases prices for solar installation. The premium price paid for what Brown called less efficient products misallocates capital for carbon reduction.
More importantly, Cicchetti said, net metering relieves stress on the electric grid.
“What’s also really important is that customers who used to use the grid during peak usage times are now not doing so,” Cicchetti said. “Why should they have to pay much more for that grid?
Brown said that, going forward, best practices would be to provide market-based pricing. In the absence of market-based pricing, he said, cost-based regulation should be the preferred choice to make.
Net energy metering is not a subsidy for rooftop solar, Cicchetti said, because solar customers pay to install the systems themselves.
Cicchetti added that regulators should work to achieve grid neutrality by clarifying the value that DER and private storage bring to the grid and society. This practice, he said, would not allow utilities to give preferential treatment to utility-owned systems without offering opportunities for private system owners to become more integrated.
“Open and transparent grid access should be a public policy goal that regulators encourage,” Cicchetti said.
