But first a little background.
What is net metering and why should you care?
We’ve covered this topic before, but net metering is one of the most successful solar incentives we have in the United States. Under this provision, you’re allowed to sell excess solar power to the utility company (as a credit) – and buy back electricity from the grid at night (as a debit).
At the end of each billing cycle, you’re only responsible for the “net” difference in metering. For many homeowners and businesses, this means paying $0 to their utility company.
How successful is the net metering program?
- it’s successful enough that 43 separate states, the District of Columbia, and 4 US territories already have net metering programs in place
- it’s successful enough that the federal government has mandated that all public utilities offer the program wherever customers request it
- it’s successful enough that net-metered access grew from 0 solar-powered homes in 2003 to 300,000 solar-powered homes in 2012
In other words, net metering is incredibly successful.
If Net Metering Is Good – Why Are Solar Companies in San Diego Worried?
The program works – and it works very well. But many utility companies throughout the Southwest are trying to change their states’ respective net metering programs.
Some want to end it altogether, while other utilities want to add price hikes and fees.
Their primary complaint is that net metering places an unfair burden on the utility grid. And non-solar customers often end up footing the bill for network improvements.
Many solar companies are fighting back, charging that utility companies are trying to squash competition and protect their monopolistic power. In other words, solar energy and net metering pose a threat to the standard business model that most utility companies follow.
The net metering fight is different in each region of the Southwest – but California’s Assembly Bill 327 (AB 327) appears to be the center of attention. If approved, AB 327 could replace the state’s tiered billing system with a flat rate that removes some of the financial incentives that come with solar.
Because California is currently the country’s largest solar market, success or failure here could influence what happens to net metering elsewhere in the nation.
AB 327 is still under review by the California Public Utilities Commission. A detailed cost-benefit analysis from the regulatory agency could come out as early as October of this year – maybe sooner.
Keep checking in with us for new updates. And as always, if you’re in the market for a solar installation, contact us today for a free consultation.