Rooftop panel benefits to ‘society’ outstrip net-metering costs, report says

Source: Edward Klump, E&E reporter • Posted: Thursday, October 20, 2016

A new report says homes and businesses that turn to solar energy tend to provide more benefits to the electric grid than they receive from net metering.

The document, released yesterday by the Environment America Research and Policy Center, relied on 16 other analyses to form a counterargument to utilities that say solar owners aren’t paying fair amounts.

“Rooftop solar users are givers, not takers, when it comes to the value they provide to society and the electric system,” Bret Fanshaw, a co-author of the report, said in a statement. “In many cases it appears that solar programs are a bargain for utilities, not a burden.”

The report is the 2016 edition of “Shining Rewards: The Value of Rooftop Solar Power for Consumers and Society.” It indicated the 16 analyses showed net benefits to the grid, meaning the value of solar was greater than the cost of solar integration. In 12 of those, the value of solar was higher than the average residential retail power rate in the area during the analysis.

The median value of rooftop solar energy in the 16 analyses was 16.35 cents per kilowatt-hour, according to the study, while an average residential retail rate in related states was about 13 cents per kWh.

The report singled out net metering as being instrumental in helping solar energy grow in the United States. The setup enables credits to owners of solar panels for excess power at a set price, typically the retail rate they pay for power. The report said net metering has a role in 41 states and the District of Columbia.

But the study said some parties have taken to attacking this as an unjustifiable subsidy, while it argued access to net metering should be preserved and expanded along with other options that allow “fair compensation” to people with solar.

The Edison Electric Institute, which represents a group of U.S. investor-owned electric companies, believes “outdated net metering policies that create a cost shift must be updated,” according to a statement from Jeff Ostermayer, an EEI spokesman. He noted a report requested by Nevada that cited a cost shift of about $36 million a year related to net metering.

Ostermayer also touted his sector’s work in renewables in the United States. He said the “electric power industry is leading the way on solar power and currently accounts for about 60 percent of all installed solar capacity on the energy grid today.”

Fanshaw, who is with Environment America, said in an interview the report he co-authored showed the benefits of distributed solar are worth at least the retail rate of electricity used in net metering. It’s important to look at the big picture, he said, while some studies may only focus on certain aspects.

A benefit of solar cited in the new report was a reduction in how much electricity utilities need to buy or generate from power plants fired by fossil fuels. Solar systems can cut the amount of energy lost through the transmission of power, according to the study, and can lower exposure to swings in fuel prices while helping with grid resiliency and avoiding certain environmental compliance costs.

Other named benefits included avoiding greenhouse gas emissions, reducing air pollution and creating jobs. Gideon Weissman, a co-author of the report who’s with Frontier Group, said the use of natural gas and coal is “pushing us toward the brink of catastrophic climate change.”

“Our analysis shows that the people and businesses who invest in rooftop solar aren’t just guiding us away from the cliff, they’re also providing benefits to society and to their fellow ratepayers,” Weissman said in a statement.

The study suggested lifting “arbitrary caps” that limit use of net metering, while saying governments should consider the full benefits of solar. The report called for leaders to reject alternatives that lack “full and fair compensation.”

The report specifically said state and local regulators should avoid high fixed charges or rate designs that seek to shift costs to small users, including people with solar. States should have aggressive goals for solar energy, it said, and financial and regulatory hurdles to solar should be removed.

Karl Rábago, the executive director of the Pace Energy and Climate Center who has studied the value of solar, said everyone benefits through lower rates when value surpasses costs.

“Utilities should start working with customers and regulators to make more solar and more savings happen,” he said in a news release.