There’s a big to-do at the moment about a certain state bill making the rounds of the California legislature. Bill AB-920 (full text here), sponsored by Democrat Assemblyman Jared Huffman, proposes revisions to the state’s current net metering laws. But before I go into that, let’s do a real quick crash course in net metering. The setting: your solar electric (PV) system generates electricity. Now, one of two situations apply:
- It generates less electricity than your property consumes.
- You make up the difference by drawing on conventional electricity from your regional utility
- OR, it generates more electricity than your property can use at a given point; you suddenly have “net excess generation” (NEG)
- Your meter runs “backwards”: your utility compensates you for this NEG, generally in the form of credits that appear on your next electric bill
When we use the term “net metering,” we’re talking about Scenario 2. Most states have net metering laws requiring utilities to offer such a program–the credits can be carried forward for a certain about of time before expiring. In some, it’s only month to month. For others, it’s 12 months. This is a much better deal because it gives you a better chance of achieving a zero balance, or close to it, on your electric bill. Those ten days of your summer vacation, when your PV system was sending kWh like mad into the grid, can essentially come back and cancel out ten days of low winter sun and Christmas lights.
Now back to the issue at hand. According to California’s current net metering laws (see DSIRE), NEG “is carried forward to a customer’s next bill for up to 12 months. Any NEG remaining at the end of each 12-month period is granted to the customer’s utility.” This is fairly SOP for net metering in this country–at the end of the year, if you haven’t used up your 65 kWh of NEG–because you were conscientous about your energy usage, or went on a really long vacation, or whatever–the excess evaporates. It’s like a rollover minutes plan from a cell phone company where the minutes expire.
However, the utility took that energy and made it part of its portfolio. In turn, those kWh were sold to other consumers. If the utility is making money from this electricity, you as the owner of the system should be too, without limitations–at least, that’s what the bill’s supporters believe. As this op-ed in the LA Times points out, utilities aren’t too crazy about this notion. After all, they point out, they’re already heavily subsidizing solar panel installations in California by offering cash rebates as well as current net metering incentives; why should they have to take this extra step?
The bill would require utilities to do one of two things: either provide a sort of endless rollover of NEG credit so that it could be carried over from one year’s electric bill balance to the next; or actually pay the customer for any remaining NEG credit on their bill at the end of the year. Either way, the customer would be aware that NEG would not go uncompensated. This would encourage greater energy conservation. If you see that you have 65 kWh of electric credits remaining on your bill, and you know that those credits are due to expire at the end of the month and be no good to you anymore, you might be less inclined to turn off the lights, or maybe you’ll turn the AC up a notch. After all, if you tack on another 40 kWh to your bill, you’ll still have 25 kWh of credit leftover…so why bother conserving?
But conservation of energy is in everyone’s best interests. Although revising California’s treatment of NEG will throw a wrench in the already straining works of utility profitability, it would be a step in the right direction for encouraging state-wide energy conservation–not to mention solar adoption. Let us know what you think of the bill’s potential effects, and we’ll keep you posted on its progress through the legislature.
