The prestigious Washington D.C. think tank’s analysis of existing literature shows a broad consensus that net metering – where solar households receive the same rate as the general electricity tariff for their solar exports – is benefiting utility customers who do not employ solar PV.
As the national battle over net metering rages on in multiple states, one of the most prestigious think tanks in the United States has weighed in. The Brookings Instite issued an analysis of existing literature on the policy, concluding that here is a broad consensus that under most conditions solar PV systems provide more value than cost to other utility customers.
To reach this conclusion, Brookings looked at studies by utility regulators in at least eleven states as well as reports by Berkeley National Lab and a number of think tanks. The organization found that reports by regulators in ten states – including Nevada – have found that other ratepayers benefit from net-metered solar under current penetration levels.
“Increasingly (the national literature) concludes— whether conducted by PUCs, national labs, or academics — that the economic benefits of net metering actually outweigh the costs and impose no significant cost increase for non-solar customers,” declared a post by Brookings Metropolitan Policy Program Director Mark Muro and Senior Policy Associate Devashree Saha. “Far from a net cost, net metering is in most cases a net benefit—for the utility and for non-solar rate-payers.”
Citing the report from Berkeley Lab, Brookings concluded that even at much higher levels of rooftop PV penetration, there would be limited impact on average retail electricity rates.
Brookings also identified a need for better processes to evaluate the benefits as well as costs of solar, while stating that utilities must still be able to make a profit.
“Regulators and utilities need to engage in a broader and more honest conversation about how to integrate distributed-generation technologies into the grid nationwide, with an eye toward instituting a fair utility-cost recovery strategy that does not pose significant challenges to solar adoption,” notes Brookings.
The think tank gave five specific recommendations for regulators in this regard, including adopting a “rigorous and transparent” methodology for identifying, assessing and quantifying the costs and benefits of distributed generation (DG), undertaking value of solar assessments, implementing decoupling of utility profits and utility sales and moving towards a rate design structures based that meet the needs of DG.
