Net metering benefits all utility users

By Drs. Robert & Sonia Vogl
President and Vice President,
Illinois Renewable Energy Association

The recent National Renewable Energy Laboratory report that up to 39 percent of U.S. and 35-45 percent of Illinois’ electrical supplies could be produced by rooftop PV systems provides an opportunity for society to reduce its reliance on fossil fuels. When combined with energy efficiency, it offers households, business, industry and communities with the means to cut air pollution and reduce climate changing emissions while saving money.

With over a million residential solar energy systems installed in the U.S. and rapidly increasing, some utilities responded by seeking to raise fixed costs on residential PV systems to be connected to the grid and/or eliminate net metering arguing that owners of systems are transferring costs to other rate payers. Exelon and ComEd are seeking changes in the rate structure which solar advocates fear will reduce the financial appeal to customers who want to have their own solar PV systems. A legislative decision could be reached before this column is printed but observers expect that the issue will not be resolved before the session ends on May 31.

A Brookings report by Muro and Saha provides evidence that net metering does not transfer costs to customers without solar systems. Other customers actually benefit from the expenditures of those who install PV. A growing number of studies establish that net metering is a benefit both to the utility and non-solar-rate payers. Solar installations can reduce the need for costly grid upgrades, reduce fuel costs, reduce the need to construct new power plants, stabilize electrical prices and promote energy security.

When solar penetration increases from today’s 0.2 percent of electrical production to 10 percent the impacts on average retail rates will still be relatively modest but are likely to reduce shareholder earnings according to a report by Lawrence Berkley National Laboratory.

Muro and Saha conclude that regulators and utilities need to engage in broad and honest conversation in order to institute a cost recovery strategy which is fair to utilities while encouraging growing solar penetration.

A solar revolution is underway and distributed solar is increasing as more homeowners decide to have solar panels installed on their roofs. The rate of increase will be heavily influenced by the outcome of the policy debates occurring in state capitols.

The solar revolution is based on the recognition of the adverse impacts of increased consumption of fossil fuels. With the expansion of the expressway system in the 1950s fuel consumption increased dramatically as cars and trucks undercut mass transit systems. The growth in products derived from petro-chemicals and the industrialization of agriculture also increased consumption of fossil fuels adding to the release of climate changing gases.

Scientists began documenting that human activities were having more than local impacts. Testing nuclear weapons distributed radioactive materials around the globe. Release of CFCs reduced the ozone layer, which threatened human well being. Reforms were introduced reducing the damage from these practices.

Now we are faced with the need to reduce burning fossil fuels to decrease the risks of global climate change. When individual homeowners want to contribute to the reduction of greenhouse gas emissions by installing solar panels, buying electric cars and using their battery packs as backup power in case of grid failure and eventually going off grid, their efforts should be embraced with appropriate state policies.

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