Net metering: The civil rights movement for solar energy

The California State Legislature has just begun consideration of a little-noticed piece of legislation that figures prominently in the future of solar power in America: a net-metering cap that if raised could unshackle the solar industry and distributed power generation.

David Hochschild, Solaria

The California State Legislature has just begun consideration of a little-noticed piece of legislation that figures prominently in the future of solar power in America. California’s current net-metering legislation limits the total amount of rooftop solar power that can be connected to the electric grid to no more than 2.5% of the state’s total electric load. AB 560, sponsored by Assemblywoman Nancy Skinner (D-Berkeley), seeks to raise this net-metering cap and unshackle the solar industry from an arbitrary cap.

Thanks to the $3 billion California Solar Initiative and net metering, the Golden State’s solar industry has installed more solar power in the last two years than the previous 25 years combined. Because of these policies, California today represents 60% of the solar market in the United States. But with 50,000 solar energy systems now providing clean power in the state, California is expected to hit the 2.5% cap as soon as next year, which could undermine this burgeoning market.

Net metering should be understood as the civil rights legislation for customer-owned solar energy, ensuring that clean power generated by customers is treated equally to conventional electricity from the grid. First created in California in 1995 and now in place in 44 states, net metering allows homeowners and business owners who install solar panels or other clean energy systems to feed any surplus electricity back to the grid for the benefit of other customers. In return, the solar owners receive a credit on their electricity bill at a rate equal to what the utility charges.

This simple idea, which has no cost to the state budget, has helped democratize the electric grid and enabled more clean power generation during peak demand periods — the time of day when electricity is most needed and expensive, and when the dirtiest “peaker” power plants are typically cycled on.

Opponents of net metering have argued against the law in the past on the grounds that either A) the electric grid simply can’t support that much solar power coming from so many different locations or B) that net metering unfairly punishes non-solar ratepayers by reducing the amount of money that solar customers contribute to pay for the upkeep of the electric grid.

In fact, the electric grid is capable of absorbing substantial amounts of solar power. In parts of Germany, which has installed more solar power than any other nation in the world, solar energy penetration into the electric grid exceeds 30% during peak demand periods and the grid is holding up fine. As for the costs, the savings to the electric system created from distributed solar energy are substantial because the cost of incremental peak power from fossil fuel have increased so much and because more solar power generation at the point of use means the utilities have to spend less money in new transmission and distribution capability. And when the United States finally adopts climate legislation, this financial savings that solar power provides for the electric system will become even greater as the cost of coal, oil and natural gas increase. Solar power may not be cheap but the cost of business as usual is higher.

Just last year, the city where I live, San Francisco, came perilously close to approving a $271 million fossil-fuel burning “peaker” power plant in a low-income, predominantly African-American neighborhood. Thanks to coalition of neighborhood activists and environmental organizations, the idea was ultimately defeated. But fights like these continue in communities across the nation. More often than not, they don’t end well for poor communities.

When new fossil-fuel burning power plants are built, it’s almost always the poorest parts of town that have to live with the worst of the pollution they create. To help prevent more fossil fuel power plants from being built and shut downs the ones currently operating, we must protect the barrier-busting policies like net metering that are necessary to unlock the full potential of solar energy. The California State Legislature should build on the solar success of the last few years, resist pressure from opponents of distributed generation and move to lift the net metering cap this year.

David Hochschild is VP at Solaria, a solar company headquartered in Silicon Valley, and co-founder of the Vote Solar Initiative, a non-profit solar advocacy organization.

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