How It Works
During peak production, the amount of electricity generated by most household solar arrays exceeds household energy demand. The opposite is true during low-production times, such as on cloudy days or at night. Net metering allows homeowners to feed excess solar energy back to the grid and receive credit equivalent to this amount of energy. This credit is applied during periods of low-solar generation when solar households cannot supply 100% of their energy needs and rely on the grid. Net metering is not a subsidy for solar owners. Rather, it reduces costs for households as well as utility companies. Net metering ensures that solar owners receive reliable, lower-cost energy even when the sun is not shining.
New Hampshire energy statutes require utilities to allow solar customers to net meter. However, the size of solar arrays eligible for net metering is capped at 1 MW. This cap exists because of concerns that increased solar will result in a cost-shift away from solar generators and toward other ratepayers. This is not the case. Many states have demonstrated that the grid can accommodate much higher levels of solar (and other distributed energy generation) to the benefit of all ratepayers. Because peak solar generation often coincides with peak grid demand, increased solar capacity creates a better match between energy supply and demand. As a result, utility prices are less likely to spike during peak demand. This means that solar lowers energy costs for all ratepayers, regardless of income level or whether or not they own a solar array.
The Acadia Center conducted a study on the value of solar in NH and found that “the value of solar to the grid—and ratepayers connected to the grid—ranges from 19-24 cents/kWh, with additional societal values of 6.7 cents/kWh.”
Utility Companies Should Support Net Metering
For over 100 years, utility companies have enjoyed a monopoly on the same of electricity. This model has resulted in the creation of a large, centralized power grid, which might have been appropriate fifty years ago, but no longer makes sense. Rooftop solar is one the first major threats to this utility electricity model, in which individual energy needs are typically supplied by a single, dominant utility company. This is because it offers consumers the ability to generate enough of their own electricity to power all their energy needs—appliances, electronics, heating, cooling, and even electric vehicles.
Because solar reduces electric bills owed by grid-tied households, utility companies worry that solar customers continue to rely on the grid but don’t pay their share to maintain it. However, the opposite of this is actually true. During peak grid demand (i.e. hot sunny days), utility companies normally rely on energy generated by “peak” power plants. These plants are not only high-polluting, they also charge utility companies much higher rates than other power plants. Conveniently, peak solar generation coincides with peak grid demand. This means that grid-tied solar customers support the grid by supplementing its energy supply and reducing the need for costly, dirty power from “peak” plants. In this way, net metering reduces costs for ratepayers as well as utility companies.
Utility companies are not and should not be seen as enemies of the clean energy transition. Rather, they are in a unique position to facilitate and drive this process, to work alongside solar companies and homeowners as allies pushing for a common goal. We should continually call on utilities to look toward the future and transform their grids into smarter, more sustainable systems.
New Hampshire Net Metering Policy
As the cost of solar electricity production continues to plummet and traditional energy becomes more expensive, NH has reached the 1 MW cap faster than anticipated. By limiting NH’s solar generation, this net metering cap limits benefits for all ratepayers and inhibits economic growth, especially in the form of increased solar jobs. Passing legislation to increase the net metering cap would increase incentives for high-impact solar projects. This would lower energy costs for all ratepayers, ensure more consistent energy supply, reduce surges in utility prices, and add thousands of high-quality, local jobs.