New Report: Net Metering Key to Affordability of Solar Power for Homeowners

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Net Metering Key to Affordability of Solar Power for Homeowners

Environment California Research & Policy Center

Los Angeles – As California regulators decide the future of net metering, the state’s most successful solar energy policy, Environment California Research & Policy Center released a report today that finds that net energy metering is a vital part of a healthy residential solar energy market.

“The sun shines down on millions of homes every day, yet who can tap into its near limitless energy hangs in the balance as California regulators decide on the fate of net metering,” said Michelle Kinman, clean energy advocate for Environment California Research & Policy Center and co-author of the report Will Solar Power Have a Home in California? . “California should expand net energy metering to put more homeowners on the solar map.”

California is a world leader in the deployment of solar energy technology—in particular, rooftop solar photovoltaic panels. Practically every residential solar energy system in California takes advantages of net energy metering, which allows a customer’s meter to “spin backwards” at times when solar power production exceeds on-site needs.

The report released today finds that net energy metering is a vital part of a healthy residential solar energy market because it improves the cost-benefit calculation for homeowners, encouraging more people to adopt the technology. In contrast, the report points to the conclusion that if the state were to do away with net metering, it would significantly harm the ability for homeowners to own a piece of the sun.

According to the report,

  • A hypothetical solar homeowner in San Diego owning a 2.8 kilowatt solar energy system under net energy metering would deliver 25 percent more electricity bill savings over 25 years – about $2,800 in net-present-value dollars or $6,000 in nominal dollars – compared to the same system without net energy metering.
  • This same example homeowner installing solar panels in 2015 would be able to pay back the initial cost of their solar investment in about 9 years. Without net  energy metering, the time required to pay back the initial investment would extend to about 12 years. Studies suggest that making solar power a mainstream energy resource requires a payback period of less than 10 years.
  • Researchers at the National Renewable Energy Laboratory estimate that valuing all electricity generated by residential solar panels at the wholesale cost of natural gas generation would reduce projected residential solar energy development through 2030 by 80 percent.

“Net metering makes solar energy a realistic option for California families,” said Travis Madsen, lead author of the report. “With many key incentives for solar energy scheduled to end in the next few years – from rebates under the California Solar Initiative to federal tax credits, net metering is a critical tool for ensuring a viable residential solar market.”

The report points out that net energy metering provides economic and social benefits to all electricity customers, not just those who own solar panels. Economically, net metered solar systems benefit all customers by preventing the need to generate and transmit that power from other sources, creating jobs and leading to cleantech investment. And solar energy takes advantage of a resource that is clean, safe and ubiquitous: sunlight.

“Net energy metering is a proven way to secure a renewable energy future for California, increase our energy security, reduce pollution, improve public health, and create local jobs,” said Assemblymember Nancy Skinner (AD-15) who authored AB 510 in 2010, which doubled the number of homeowners who could participate in the state’s net metering program. “It is critical that California not backtrack on solar policies that have proven effective.”

“Net metering provides a crucial economic incentive for residential solar power,” said State Senator Marty Block (SD-39), representing the state’s strongest market for solar power. “With the shutdown of the San Onofre Nuclear Generating Station in Southern California, alternative energy sources such as solar power are needed more than ever and must remain a key component to our conservation efforts. We must create incentives and promote the use of solar energy, not erect barriers,” Block added.

Regulators at the California Public Utilities Commission (CPUC) are now deciding if and how to expand or contract the state’s net energy metering program.   Policymakers are under increasing pressure from traditional utility companies who view net metering, and the ability for their customers to generate their own power, as a threat to their business.

“For over four decades California has invited its residents to own a piece of the sun and state regulators should keep the doors wide open,” said Bernadette Del Chiaro, executive director of the California Solar Energy Industries Association (CALSEIA). “Net metering has been a critical part of our unparalleled success in cleaning up the air, creating local jobs, and achieving unlimited energy independence.”

“Allowing net energy metering to expire would unfairly shift the playing field toward the dirty and unsustainable energy resources of the past,” concluded Kinman. “Environment California Research & Policy Center urges the CPUC to ensure that solar energy system owners are fairly compensated for all the benefits they deliver, making it possible more California homeowners invest in a clean energy future.”



Environment California Research & Policy Center is a statewide nonprofit environmental research and policy organization working to protect California’s air, water and open spaces. More information can be found at