Reforming Solar Net Metering

Abstract

One of the important policies aimed at diversifying the energy resource mix, stimulating local economic growth, and encouraging private investment in solar energy is Net Energy Metering (NEM). Under current NEM policies, participating customers generating electricity to serve their load can receive a financial credit for any surplus energy that they feed back to their utility’s grid. Unfortunately, several studies have shown that NEM policies are regressive onto low-income, disadvantaged communities as the revenue loss for utilities causes them to raise electricity rates in order to recover their costs. To quantify how NEM schema can potentially change the grid power flow and lead to variance in grid congestion, Locational Marginal Price, and utility’s avoided cost, we conducted an optimal power flow analysis in a synthetic IEEE 30-bus grid under 192 scenarios for three States (CA, FL, & MA). We used NREL’s System Advisor Model (SAM) to create synthetic data of our transmission grid using both the electricity load of a combination of residential and commercial buildings within our 30-bus system, and the behind-the-meter solar PV production generated using PVWatts & PySAM tools. We evaluated NEM policies by performing a cost-benefit analysis from the perspective of the NEM customers, non-NEM customers and the utilities, to demonstrate how NEM policies result in a net cost. We proposed several recommendations that can be incorporated into future NEM tariffs that will make them more equitable for the non-NEM ratepayers.