The cost of solar power has fallen dramatically in recent years, creating an increase in smaller solar installations for individual homes and businesses. The popularity of these smaller solar installations is in large part due to the policy of net-metering.
Net-metering allows people to sell their excess solar energy back to their utilities at a fair, retail rate. The popular program has driven the proliferation of solar generation in many states.
Due to a previous decision from the Federal Energy Regulatory Commission (FERC), states can set their own guidelines for net-metering programs within their jurisdictions.
However, the New England Ratepayers Association (NERA) filed a petition with FERC last month asking the commission to take net-metering out of the hands of the individual states. Doing so would allow FERC to prohibit or limit people from receiving credit for the extra energy their rooftop solar panels generate.
If FERC decides to federalize control of state net-metering programs it will severely undermine consumer choice and could have serious consequences for local economies nationwide.
In the months following the FERC decision, the solar industry’s future would be thrown into uncertainty, which could lead to a pause in new investment and developments. Disrupting the sale and installation of new rooftop solar could cause massive job losses in the industry during a time when the nation is already dealing with an economic downturn due to the pandemic.
Once FERC sets new guidelines for net-metering, state programs could come to an end. And states where excess solar energy is priced at retail rates could see excess solar sold back to utilities at their much lower avoided-cost rate—which is often half the price of the retail rate.
“For rooftop customers, net metering has been a successful policy that has helped drive the growth of solar around the country, while lowering electric bills for homeowners and small-business owners," said Katherine Gensler, Vice President of Regulatory Affairs, Solar Energy Industries Association.
Allowing FERC to undercut the current buy-back pricing for net-metered solar power will have real consequences for retail consumers who made solar investments with the certainty that they would receive a retail rate for the energy they supply to the grid.
“State legislatures that have passed net-metering laws, and the commissions that have implemented them, are the most affected here, and are most affected by the COVID-19 virus,” said Jeff Dennis, general counsel at Advanced Energy Economy.
The Energy Choice Coalition supports state-run net-metering programs. Federal overreach into net-metering could damage the solar industry as a whole. Furthermore, this widespread legislative change would hamper private-sector investment and cost states jobs when they have never been needed more.
FERC is open to comments from individuals and organizations until June 15, 2020. The form to submit comments to FERC on net-metering can be found here.