The Spotlight

Are Homeowners That Go Solar "Freeloaders"?

  09 Jul 2015  |    
The solar boom shows no signs of slowing down. According to SEIA, the last quarter was the best one ever for the U.S. residential solar sector. The U.S. added 1.3 GW of solar energy, and solar made up over half of the electricity generation capacity added in the U.S. last quarter.1
Solar Energy Industries Association, June 2015
Yup, we added more solar than natural gas, coal, and nuclear energy combined.

This is all great news. Solar is saving businesses, schools, and homeowners money, and the industry supports a thriving workforce. It will only keep growing as the price of solar continues to drop. But some people aren’t thrilled about that, and opponents of this booming industry have taken to throwing out as many criticisms as they can and seeing what sticks.

One of the most persistent criticisms of solar focuses on net-metering, a process by which the owner of a solar installation is compensated at the retail rate for extra electricity they feed into the grid. Fossil fuel interests regularly attack net-metering in the hopes that they can weaken a burgeoning competitor. Some utilities also aren’t fans, which should come as no surprise: net-metering allows homeowners to play an active role in electricity generation, taking profits away from utilities who had enjoyed a virtual monopoly until now.

According solar opponents, net-metering places an unfair burden on consumers without solar installations – particularly low-income ones. But that theory doesn’t really stand up to scrutiny.

The thinking goes like this: consumers that install solar recieve the retail rate for the energy they generate. This allows them to “zero out” their electricity bills, thus avoiding having to pay for grid maintenance and upkeep. As more people go solar, the pool of consumers that pay to support the grid shrinks, leaving all of the people left in that pool to pay an increasingly larger share. Eventually, the only people left in that pool will be low-income consumers who can’t afford to install solar. But this kind of thinking ignores the litany of benefits that solar brings to the grid, the environment, and public health – benefits that go unaccounted for, and actually make a kW/h of solar energy more valuable than the retail rate.

States across the U.S. are discovering the overwhelming benefits of net-metering. For instance, every kW/h of solar energy contributed to Maine’s grid by distributed solar is worth $0.33 per kW/h2
Maine Public Utilities Commission, March 2015
– even though distributed solar generators are only credited $0.13 per kW/h they contribute to the grid. In New York, the true value of solar is anywhere from $0.15 to $0.40.3
University at Albany
Likewise, distributed solar is woefully undervalued from Missouri4
Missouri Energy Initiative, January 2015
to Nevada.5
Nevada Public Utilities Commission, July 2014

What accounts for the overwhelming benefits provided by net-metering and distributed renewables? A few things. For one, if homeowners are generating their own electricity, that reduces the demand for new utility-scale power plants. In other words, distributed solar reduces the need for capital-intensive projects with high upfront costs that raise electricity rates. Clean energy also brings innate public health benefits because it doesn’t contribute to smog and harmful pollutants. Plus, it prioritizes less water-intensive, zero-carbon energy, thus preserving our environment for future generations. But even if you leave out the societal and environmental benefits, net-metering just makes sense. Net-metering makes for a more efficient grid, reducing the losses inherent in long-distance electricity transmission – in Massachusetts, the value of distributed solar is over $0.22 per kW/h without societal benefits factored in.6
Acadia Center, April 2014

The facts are clear: the only thing “unfair” about net-metering is that distributed solar generators aren’t getting paid the rates they deserve for their electricity. Remember that the next time a fossil fuel pundit decides to decry this vital policy measure.

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