Grading the Net-Metering Program, One State at a Time

A group of net-metering advocates in the United States has released a report grading each state's policies on allowing residents and businesses to get compensated for feeding excessive electricity from their renewable energy systems to the electric grid.

The 112-page report, "Freeing the Grid," gave 15 states an "A" or "B" for making it relatively easy and affordable to connect their solar, wind or other types of systems to the grid (see report for explanations of the grades). Back in 2007, only one state got the high mark.

The report gave 27 states an "A" or "B" for net-metering rules that allow residents to get credit for sending unused electricity to the grid. That's also a big jump from 2007, when 13 states won that recognition.

The Network for New Energy Choices prepared this third, annual report. It worked with Vote Solar, the Interstate Renewable Energy Council, the Solar Alliance and the North Carolina Solar Center.

Not surprisingly, many states with mandates for their utilities to boost their offerings of renewable electricity also have incentives in place to entice consumers to install renewable energy systems. Net-metering policies exist in 42 states and Washington, D.C.

California, which has been ahead of other states in adopting policies and subsidies that are friendly to renewable energy, has scored well, getting an "A" for net metering and "B" for interconnection.

Texas, the big wind energy producing state, has no net-metering program and received a "D" for its interconnection standards, which include technical and legal requirements.

Some state have both kinds of policies, but those policies appear onerous and costly to the report's authors. Georgia, for one, got an "F" for both. States that flunked in one category or the other included Hawaii, Idaho, Kansas, Kentucky, Louisiana, Wyoming, Utah and Minnesota.

Net-metering policies are meant to promote generating solar, wind or biomass electricity where it's consumed. Solar energy system owners could export extra electricity to the grid and get credits on their bills that are equivalent to the retail price.

But writing and deploying effective net-metering programs is far from simple. And whether they are cost effective is subject to debate.

In California, a legislative effort to raise the cap for net-metering customers prompted utilities to question whether net metering benefits a small group of people at the expense of those who can't afford or choose not to install solar. Utilities typically recoup the cost of the programs they run seeking rate hikes that apply to their overall customer base.

California has yet to answer a thorny question about whether net-metering customers are paying their fair share of the costs of maintaining the electric grid. The California Public Utilities Commission is due to release a report in January that will examine this and other issues.

Some utilities in other states are grappling with similar issues (see Xcel Looks for Grid Upkeep Fee From Solar Customers).

Efforts to raise the net-metering cap in California didn't succeed. Some lawmakers tried to raise the cap from 2.5 percent to as much as 10 percent, but failed to muster enough votes to send the bill to the governor for signature this year (see Cal Net Metering Bill Stalls).

The Pacific Gas and Electric Co., which serves central and northern California, then agreed to Gov. Arnold Schwarzenegger's request to increase the cap to 3.5 percent. The utility, which was close to hit the 2.5 percent ceiling, would stop accepting new net-metering customers when the overall generation capacity from existing net-metering customers' systems reaches 3.5 percent of the load.

In the "Freeing the Grid" report, good interconnection standards refer to rules that clearly spell out the technical and legal mandates. They also do not impose expensive fees or add costs by requiring devices such as redundant disconnect switches, which the report said adds to the cost of installing solar without providing the intended safety assurances.

Good net-metering rules should make it easy for consumers to earn credits from their utilities for feeing excessive electricity to grid, the report said. Of course, advocates want states to forego restrictions on the size of solar energy systems or the types of customers who can participate in net metering. 

Photo via Flickr/Creative Commons.