Net Metering: Energy Providers Clash On Cap, Utility Rates
New Hampshire already permits a limited amount of net-metering, which allows solar panel owners to sell some power back to the electric grid. The solar industry has long called for those limits to be lifted, but the state's utilities say they can only accommodate so much, without passing on costs to other customers.
- Sam Evans-Brown - Host of Outside/In, a show on NHPR about the natural world and how we use it.
Check out Outside/In's episode on solar: "The Accidental History of Solar Power," hosted by guest Sam Evans-Brown.
What is net metering?
Sam Evans-Brown, host of Outside/In at NHPR, says that net metering is an exchange of power between homes with solar panels and the public-utility power grid. He explained by using his own home, which has solar panels installed on the roof:
When I got up this morning, and there was no sun on those panels, my refrigerator was running. I turned some lights on because the sun wasn't up yet. While all that electricity was being used, I was importing electricity from the [public utility power] grid, and my meter was running forwards. So if you were to go look at the [electromechanical meter's] disk, the numbers would be counting up. However, now I am here at work, the refrigerator is still running but nothing else is going on at the house. The sun is hitting the panels, it's probably generating more [energy] than what the house is using. So the house is exporting electricity back on the grid, and if you were to look out at the meter, the disk would be running backwards, and the numbers would be counting down.
Evans-Brown says that if a homeowner with solar panels generates more energy than they consume, they can bank that credit to the next month, or carry those credits over the year.
What is the current net metering debate in New Hampshire?
Currently, homeowners with solar panels can sell their excess energy back to the grid at a market price of 17 cents per kilowatt-hour. The more that homeowners use solar, the less power they will need to purchase from the grid. Utility companies, such as Eversource, worry that this will drive the cost of power up, and this would negatively impact those customers who do not use solar energy.
Rick LaBrecque, manager for distributed generation at Eversource, says that the cost of power infrastructure, including maintaining poles and wires, does not decrease as more customers use solar power. So as these customers save money by selling energy back to the grid, prices for energy must go up to compensate:
It would disproportionately affect nonsolar customers...we call it a cost-shift, or a cross-subsidy, where nonsolar customers' rates have to go up to compensate for solar customers getting retail credit for what is really a wholesale product.
On the other side of the argument, solar energy companies feel that solar energy is not widespread enough in the Granite State to actually impact the price of power when solar customers sell their excess energy back to the grid.
Jack Ruderman, the director of community initiatives at ReVision Energy, says:
What Rick [LaBrecque] is talking about, all these costs, that may be true fifteen years from now, or twenty years from now, when we have a lot of solar spread throughout the state.
He also argues that net metering provides a valuable service to these power grids.
Net metering is not a subsidy, it is an exchange of goods for money...When I overproduce, and export my solar power onto the grid, if I am Eversource, there is a value to that electricity. It's going to end up being distributed to my neighbors and sold to my neighbors.
Wholesale vs. Retail Prices
The wholesale price for power is about four or five cents per kilowatt-hour, and fluctuates depending on demand. Currently, home owners receive the retail price of 17 cents per kilowatt-hour for the energy they sell back to the grid. The Public Utilities Commission was asked to research whether this retail sale price was currently causing a cost-shift to nonsolar customers, and they recommended that more data needed to be collected from utility companies before setting final net metering rates.
In the statehouse, HB-518 would eliminate the current cap on net metering, which allows customers to sell back their energy for up to 100 megawatts of power. However, the bill would also change the price of sale to reflect wholesale rates rather than retail rates. This would significantly reduce the amount of savings for solar users, who initially invest in solar panels with the hope of making up the cost after a few years of collecting their energy and selling excess back to the grid.
LaBrecque says that customers who use solar already receive tax credits for using more sustainable energy, but Ruderman says that there simply aren’t enough people using solar right now to justify reducing the price.
Searching for a Solution
Evans-Brown thinks that current discussions do not take the debate far enough. He says:
If you want to reduce costs in the future on the grid, you should send some sort of price signal that lets people know when you are using some really high priced electricity at that time...every home would have a little display on the wall...that signal, could, if you wanted, be connected to smart appliances.
Ruderman agrees that price signals are essential, but that there would need to be more research, and potentially a pilot program, to make that change. Ruderman has another solution for solving the debate:
Let’s get an audit from the Public Utilities Commission [to solve whether cost-shifting is actually already occurring]...and then secondly, let’s do something about the grid. Let’s modernize the grid and move into a smart grid.
Ruderman thinks that if people can be more thoughtful about their use of electricity, and could potentially sell back excess power at higher prices when demand is high, or store energy when the demand is low, the system will become more practical and sustainable.
LaBrecque says that Eversource supports modernizing the grid, but that there still needs to be changes on the net metering structure in order to prevent certain solar customers from having an advantage over those who do not have solar.
In states such as Massachusetts, Vermont, and Hawaii, net metering has had vastly different impacts. Our guests discussed these states and how they compare to New Hampshire. Here is the latest from Massachusetts, Vermont, and Hawaii.