In Net Metering Fights, Customers Matter Most

In past months, PACE has weighed in on solar issues developing nationwide. Much of this discussion has focused on the policy of net metering, which involves paying solar rooftop owners for excess electricity they return to the grid. We have opined on net metering debates occurring in Mississippi and Louisiana, pointing out the potential for poorly designed net metering policies to hurt the majority of power customers. By overpaying one set of customers, another set of customers is forced to pay more.

In California, for example, net metering policies are expected to shift more than a billion dollars from those who own solar rooftops to those who don’t. That’s because, in California, the average median income of net metering customers is 68% higher than the average household income in the Golden State. In other words, costs are shifting from those with more money to those with less. As one California critic quipped, the policy isn’t “Robin Hood,” but “robbin’ the hood.”

Addressing the cost shift isn’t rocket science, of course. Solar rooftop owners could simply be paid less for the excess power they generate. Utilities could also assess a standard charge to ensure that adequate revenue is collected to pay for fixed grid costs. Or some combination of both. Those solutions don’t sit well, though, with the solar industry, which understands that generous payments to solar rooftop owners are essential to making their solar products attractive to customers.

That’s why the solar industry and its advocates have been quick to cry foul over any proposal, no matter how sensible, that seeks to recalibrate solar policy with customer realities. Even modest charges, such as Alabama’s $5 per kilowatt monthly charge for solar customers, was labeled “anti-solar” by the industry. A similar attempt in Arizona drew the same ire from solar advocates. Likewise, in Florida, anyone who doesn’t support an amendment to allow big box stores to sell solar-generated power directly to customers – free of the regulation to which utilities are subject – is labeled “anti-solar,” or worse.

In truth, the fight over solar’s future is far more about protecting the solar industry’s business model than protecting the revenues of traditional utilities. That’s because, in the regulated marketplace, it’s not utilities who really pay solar rooftop owners through net metering – it’s other customers.

According to a new report from Bloomberg Business, California’s solar battle is moving to the legislature. With the state hoping to get half of its power from renewable sources by 2030, solar companies believe their customers aren’t being paid enough through California’s net metering policies. On the other side of the ledger, according to the report, major utilities like PG&E, Edison International, and San Diego Gas and Electric have asked state regulators to cut net metering payments and increase set charges to new residential solar customers. Solar lobbyists are calling the request “anti-solar.” What they really mean, of course, is “anti-solar industry.”

It’s worth remembering that big solar companies are for-profit ventures. The media often forget that, portraying the work of the solar industry as altruism instead of capitalism. The debate over solar issues is too important to gloss over that distinction, especially if lawmakers and regulators hope to create a policy landscape for solar that is sustainable and fair for everyone. Perhaps it’s time we stop characterizing the debate as “solar versus utilities” and start focusing on the group that really matters – the average customer who will end up paying for whatever policy makers decide.