Nevada PUC Study: Net Metering Can Lower Energy Bills for Everyone, Not Just Solar Panel Owners

by Henry Kaplan | Jul 17, 2014 |

(Boulder City, Nevada. Motto: "A Leader in Solar Energy Development". By Sarah Nichols from Las Vegas, NV, USA [CC-BY-SA-2.0], via Wikimedia Commons.)

As solar panels appear on more and more rooftops, a fight has broken out over just how much that solar power is worth. A solar panel doesn’t necessarily power the home it sits on – the energy it generates may be pumped back into the grid, and sent to other consumers on the network. With a net metering program, the owners of solar panels only pay for the net amount of energy they used. Essentially, that means that they sell any unused energy they produce back to the power company at retail prices.

However, power companies don’t like buying energy at retail prices – they generally buy in bulk. Many power companies oppose net metering programs, and in their fight against them, they often make the argument that net metering raises prices for other customers. Here’s a quote from an article just last week on one of these fights in North Carolina:

Duke Energy spokesman Randy Wheeless challenged that notion, saying if the company is paying too much for solar, then it's customers are paying too much (as costs tend to get passed along). The suggestion, that if Duke can pay less to buy it, customers will see a windfall.

But a new study commissioned by the Nevada Public Utilities Commission has found that, at least in Nevada, the opposite is true:

The study, conducted by the San Francisco-based energy consulting firm Energy + Environmental Economics (E3), found that despite dire predictions from utilities in other states, net metering customers in Nevada will have "no substantial impact" on costs borne by non-solar ratepayers.

Instead, net metering customers will allow the state savings of somewhere around $166 million in avoided transmission network and generation costs, all of which would have shown up on Nevadans' electric bills.

Net metering saves money for even non-solar customers, they found, because more solar power means that they save money on production and transmission:

The study found that for every kilowatt-hour the state's utilities buy from rooftop solar customers in 2014 and 2015, they'll be able to avoid buying 2.45 kilowatts of "central station renewables" -- output from the state's big, industrial-scale wind, solar, and geothermal projects.

That means considerable cost savings that can be passed on to non-solar ratepayers.

And of course, the solar energy that panel owners sell back to the power company is then sold to nearby homes, albeit without making a profit.

This study focused on Nevada, but it doesn’t bode well for energy companies making this argument in other states.

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