Net Energy Metering Policies Helping To Spur Solar Growth

All across the United States, rooftop solar panels are popping up on homes, businesses and schools like mushrooms in a forest, and utility-scale solar projects are bringing huge amounts of clean energy into our communities. Why? Well, among other things, consumer choice in America is something that we all hold very sacred.


Today, smart policies - like Renewable Portfolio Standards (RPS) and Net Energy Metering (NEM) - are helping to fuel solar's explosive growth. Our industry now employs 120,000 Americans at 5,600 U.S. companies. What's more, we're now generating enough electricity to power more than 1.5 million homes!

Part of this amazing success story can also be attributed to the fact that the average cost of a solar system has dropped by nearly 40 percent over the past two years and by a whopping 50 percent since 2010. As a result, American consumers, businesses and schools are flocking to rooftop solar. According to the most recent statistics, the residential market alone grew by 48 percent in the second quarter of 2013 compared to the same time period a year ago. That's nothing short of remarkable.

NEM has significantly contributed to this growth. Simply put, NEM is a credit on your bill that represents the full value of electricity delivered. Think of it this way: surplus energy generated by a home or business system is exported to the electricity grid, allowing a consumer's meter to spin backwards. This allows the homeowner or business owner to have greater control over their energy use and prices. That's literally the definition of "consumer choice."

As an association which represents more than 1,100 member companies across America, we strongly support NEM, which is now a fundamental policy - and a fundamental right - in 43 states, Washington, D.C. and four territories. Specifically, SEIA's Net Energy Metering Guiding Principles protect consumers by defending their:

  1. Right to self-generate, connect to the grid, and reduce grid electricity use: Every retail electricity customer has the right to install solar generation equipment at the customer's site, interconnect to the utility grid without discrimination, and reduce his or her grid electricity use. Reductions in customer grid electricity use due to solar generation should not be imputed as a cost to the utility.
  2. Properly valuing solar electricity, and adequately compensating solar customers: Customer-sited solar generation offers many benefits to the electric grid system and by extension to non-solar customers, including but not limited to: reduction in utility energy and capacity generation requirements, reduction in system losses; avoidance or deferral of distribution and transmission investments; localized grid support including increased reliability benefits; fuel-price certainty; and reductions in air emissions and water use. The aforementioned benefits should be quantified, and solar customers should be adequately compensated for the value their solar energy is delivering to the grid.
  3. Non-discriminatory practices within cost of service recovery: In determining cost allocation, net energy metering customers should not be treated unfairly vis-à-vis other ratepayers and all benefits should be accounted for. Punitive and non-cost based charges should be prohibited. Consistent with SEIA's Rate Design Principles, a utility should have the opportunity to recover its costs of providing service and earn a return on investment as determined by regulators.
  4. No net energy metering caps: Consistent with the policies laid out in these guidelines, there should be no aggregate or statewide limit for net energy metering.
  5. Statewide application: Net energy metering rules, regulations, and practices should be standardized statewide.
  6. Transparency, access to data: Customers, or solar companies on customers' behalf, should have access to data regarding their own electricity consumption (i.e. load data including hourly profiles), with transparency into the tariffs available to them. Billing statements from utilities should clearly show the net energy metering consumed from the utility, and any energy or dollar credits carried forward as a result of solar generation in previous billing periods.
  7. Implementation best practices:
  • Individual System Capacity: Any individual system size limitation should be based only on the host customer's annual load or consumption.
  • REC ownership: The owner of a net energy metered system should retain ownership of renewable-energy credits (RECs) produced by their owned system, unless transferred to the utility or another party in exchange for acceptable compensation.
  • Restrictions on "rollover": Indefinite rollover, credited at retail rate, should be an option for customers. The only exception is allowing for payments for annual net excess generation.
  • Metering equipment: Consistent with all retail applications, the utility shall provide a meter that is capable of net energy metering. Retail electric customers utilizing net energy metering must not be required to purchase new energy metering equipment.
  • Customer classes: All customers should be able to participate in net energy metering.
  • Aggregation: Virtual net energy metering and meter aggregation options should be available to all customers.

In many ways, these principles represent a sort of Solar Bill of Rights. As an organization, SEIA is committed to defending American consumers and businesses by protecting, strengthening and expanding NEM policies all across the United States. Today, these forward-looking, common-sense policies are saving Americans money, creating good-paying jobs in their communities, providing a shot-in-the-arm to the U.S. economy and helping to combat climate change. If that isn't worth fighting for, then what is?

Rhone Resch, SEIA President and CEO

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