With the Rise of Distributed Solar, Net Energy Metering is Causing Utilities, Policymakers, and Consumers to Find a New Way Forward on Rates

July 15, 2016

WASHINGTON, D.C. – (RealEstateRama) — With the falling cost of consumer renewable energy sources such as distributed solar, more and more Americans are generating their own electricity and selling it back to the grid—a process known as net energy metering. However, as net metering has increased the amount of distributed solar deployed, utilities, policymakers, and consumers have debated how to pay for services provided by these distributed energy resources and the grid.

The Center for American Progress has released an issue brief today looking at the current market and policy landscape around net energy metering. It discusses the positive effects of selling distributed energy back to the grid, including lowering carbon emissions and local air pollution, and how consideration of these and other services in electricity rate design can help grow the renewable electricity marketplace and achieve fair rates for consumers.

“There’s no arguing that net energy metering helps deploy renewable energy technologies,” said Luke H. Bassett, CAP Associate Director of Domestic Energy Policy and the author of the brief. “For many consumers, the ability to save, or even make money, on their monthly electric bill is a critical part of the decision to install solar panels on their homes or businesses. Net energy metering is a vital tool to incentivize distributed solar installations while enabling policymakers and stakeholders to plan how to knit together these resources and the services they provide as those markets grow. This paper identifies the need to develop ratemaking approaches in more mature markets that capture the value of grid and distributed technologies while continuing to expand low-carbon energy.”

In trying to account for the increasing diversity of uses, customers, and technologies entering service on the electric grid, net energy metering has challenged the traditional way utilities and regulators do business. It has also created an opportunity for stakeholders to reconsider how to provide electricity, achieve lower carbon emissions, and manage grid-related services at just and reasonable rates and in an inclusive manner. This conversation will only become more important as new technologies and services come online as the United States works to meet carbon emission reduction goals. Policymakers must find a way to incorporate these new technologies in a way that works for everyone.
Click here to read the paper.

For more information on this topic or to speak with an expert, contact Tom Caiazza at or 202.481.7141.