Is Net Energy Metering for Solar Power a Subsidy?

The true costs and benefits of “the civil rights legislation for solar”

Herman K. Trabish: May 23, 2012

Southern California Edison (SCE) Manager of Customer Self Generation Gary Barsley said that at an important recent conference for the solar industry and the utilities interested in it, the number-one topic of conversation was net energy metering (NEM), the incentive some solar advocates call “the civil rights legislation for solar.”

Utility and solar professionals asked, Barsley said, whether there is a valid way to quantify net metering’s costs and benefits and whether they total up to a subsidy for solar system owners or a good thing for all ratepayers. “The general consensus was that there isn’t a clear answer yet,” Barsley said, “but people are really interested in finding out, because solar is going to continue to grow.”

There are 43 states with NEM programs. NEM benefits solar owners by allowing them to roll their meters backward for every kilowatt-hour they send to the grid, up to the point where their bills zero out. The return they get on the electricity they generate is the same retail rate they pay for what they consume.

The conference chatter reflects an industry-wide concern over the future of NEM as the California Public Utilities Commission (CPUC) readies a decision, expected May 24, on the question of how to define the NEM cap. Underlying the legalism involved in the CPUC decision, as Barsley noted, is a debate between solar advocates and SCE, Pacific Gas and Electric (PG&E), and San Diego Gas and Electric (SDG&E), California’s three investor-owned utilities (IOUs).

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