Net Metering

Over twenty years ago when California first allowed people to produce their own power and put it on the grid, those of us pushing for the law knew the power companies would not pay what it was worth, so net metering was born. In fact, very few people today know what a battle it was to literally force the power companies to even allow interconnection. Net metering, as it was conceived, allows a system owner to receive full credit for the extra power they produce at the time they produce it, then have that credit applied to the power they buy at full price when their systems are not producing enough power to take care of their load. This goes on for one year, then accounts are settled. If the balance of the two, or the “net” of the power metered shows that money is due to the utility, it is paid at that time. If money is due the owner, most power companies get to pay very little or even nothing at all for the extra power they receive. Then it starts over from zero again until next year.

Now, as most of us pretty much know, power costs more at different times of day and at different times of the year. This is because we must have enough power to cover when demands are the highest. This is consistently in the afternoon year round, but especially during the summer. In order to do that power plants are built, but not run at full capacity. Power plants that run just at peak times are called “Peaker Plants” As you would expect, this is very inefficient and costs are much higher to operate.   It just so happens that this is just when solar is generally making maximum power! Using solar instead of running these plants saves money for EVERY ratepayer.

In addition, when solar is spread out in an area, as on homes or commercial buildings, it is called “Distributed Energy” or “DE”. This saves even more money because the power is close to where the power is used, reducing the need for distribution costs.  This again saves EVERYONE money!!! Unfortunately, despite what they say, not everyone wants to save you money and lower your rates.

Also, as most everyone knows, the more power you use, the higher the rate. What you may not know is that commercial accounts also pay a “Demand Charge”, paying extra for a high usage even though it may only be for a short period.  Meanwhile, under most net metering agreements, power companies are only forced to give credit for the base rate (or less) for that particular time period. This means the power company can pocket the extra revenue while the power may be coming only a short distance, certainly much less than from a power plant. Keep in mind this also saves on line losses as power is moved for miles through sub stations and transformers.  When clean DE goes in an area, peaks are smoothed out and power is sold to neighbors without the costs of transmission or “wheeling”… why should these solar systems be forced to pay extra for saving money?

As long as there are peaker plants, and even “emergency” peaker plants and times that we are being charged more for power, anyone that helps with clean energy systems that provide extra power during peak times without blowing smoke needs to be encouraged, not charged extra.  But wait!  We can do even better. Inverters are now ready and available that would use batteries to shift even more of their production to peak times, however they are being prevented from widespread use, just as people installing larger systems are by the lobbying of the fossil fuel industry and utility companies, with the tales they spin and the laws they write.   You may have seen some.

Most all utility companies, with help from the fossil fuel industry, are fighting this.  They do not want you to revive full credit for the power you produce. They do not want to pay you for the extra power you produce and they resell. They do not want you to have batteries to shift your production to peak times when it is more valuable and needed most. They say people with solar and clean energy systems are freeloaders, not paying their way, by using the grid but having low or no bills. If that’s true, then people who have lower bills by conserving energy are in the same boat and not paying their way either.  On the surface they can make their argument sound good, however, when looked at closer we see something different.

In 2013 Vermont did an extensive study where it found net-metering to give measurable savings not only for all ratepayers but the whole of society. The Brookings Institute sites a number of state studies with the same result. In a review of 11 net metering studies cited by the Environment America Research and Policy Center, 8 of the 11 studies used found the value of solar energy to be higher than the average local residential electricity rate. The 3 analyses that had different results were all commissioned by utilities.  Over and over again, independent studies and analyses show that net metering benefits all ratepayers and society as a whole.

And lastly, people with solar installed DO buy power when their system is not producing, at full price, covering maintenance as well as all other costs including profit for the utility.  When their system is producing, they are simply getting credit at the lowest rate for that time while the power is sold a short distance away for a higher rate. They use very little in the way of infrastructure and, by the way, in most cases, it is equipment they have already paid for as no new infrastructure is needed.  Not only is there not a loss, there is a gain for the utilities….. not as much as they might want….but it is not a loss.

These solar and other clean systems are not freeloaders using the system for free and raising everyone’s bill as some would try to tell you, but just the opposite. When people install environmentally friendly clean systems, especially ones that produce power during peak times, they save everyone money by having cleaner air, fewer power plants overall, as well as expensive inefficient peaker plants. They are incurring less in costs, bringing down rates and they are paying their way.  Also when power is placed or distributed close to the load they again save everyone money with reduced infrastructure costs, they are again paying their way.  Again, unfortunately, despite what they say, not everyone wants to save you money and lower your rates.  Instead of encouraging people to put in larger systems and inverters with batteries that can shift loads, they are passing laws against it!  We need to stop the greed and madness. We need more representation!

The idea that somehow anyone that has invested in the future with environmentally friendly, clean distributed energy, is not paying their full share and is somehow taking advantage of the rest of the ratepayers and causing higher rates is just plain nonsense.

Let’s be real. Every power plant ever built has been paid for by the ratepayers with interest. Including the land, the construction, and all of the infrastructure to transmit power into the grid.  We, the ratepayers, also pay for the constant fuel, maintenance, employees, and other expenses, fixed and variable, as well as a profit for the utility.  In addition, every power plant built has a life expectancy. At some point, it will have to all come down and all the mess will have to be cleaned up. The ratepayers will have to pay for that as well.  All of this is expected.

Just in California solar produced 28,513 GWh in 2019 with almost 70% of that coming from residential systems and 70% of that customer owned. It was paid for by private investors at no cost to any ratepayer.  It uses free fuel that puts no pollution into the air we breathe, water we drink, nor the soil we grow our food in. It is maintained for free, year after year, with no extra cost to the ratepayer. Rather than requiring new infrastructure, it distributes power into the whole area, reducing the load on the existing infrastructure, keeping the rates lower for everyone.   There will never be a rate increase due to an unforeseen variable cost.  Never a spill, leak or meltdown to worry about. Neither severe weather nor earthquakes will have a devastating effect on this power source. It will be maintained and parts replaced at no charge to the ratepayers for many, many years, and it will never cost a cent to remove or clean up.   All in all, seems like a pretty good deal to me, and that the ratepayers rather than being taken advantage of, have a debt to those who have installed solar and other clean environmentally friendly systems beyond just a cleaner environment, that we all depend on to protect life on this planet.

Net Metering is under attack. If we are serious about even slowing global warming and have any hope of saving this planet we live on, we desperately need a universal 100% net metering law for everyone, one that pays a decent rate to those who put extra power back in for all to use. We need it quickly, and with your help, we intend to see that it happens.