Study: Net-Metering Costs Non-Solar Customers $36 Million Annually

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Posted by Justin Sykes on Friday, August 26th, 2016, 10:16 AM PERMALINK

A new study released this month examined what, if any, benefits Nevada’s net-metering program produces for the state and residents. The study, conducted at the request of the Nevada Legislative Committee on Energy, focused on the cost-effectiveness of net metering and the impact of the program on ratepayers. The results of the study overwhelmingly showed Nevada’s net metering program amounts to all cost and no benefit for the state and residents.

Nevada has long been a focus point in the debate over net metering. In general, net metering programs require electric utilities to purchase excess electricity generated by customers with rooftop solar installations at the full retail rate, as opposed to wholesale. As a result, solar customers avoid paying many of the fixed costs of the grid that are factored into their monthly bills. As such, these fixed costs are then shifted onto non-solar customers.

As part of the study on Nevada’s net metering program, researchers looked at the impact the program has on Nevada ratepayers. The cost-shifting impact was undeniable. The study found a clear “cost-shift from NEM [solar] customers to non-participating customers for both existing installations and future installations.”

Nevada’s net metering program was shown to “shift approximately $36 million per year” in costs from existing solar customers onto non-solar customers. It was also found that future planned installations would shift an additional $15 million per year in costs onto non-solar customers. Thus non-solar customers are essentially subsidizing a portion of solar customer’s electric bills.   

Even more concerning is that the study found the state’s net metering program produces no benefit for the state as whole. Overall, net metering from existing and future planned solar generation systems “increase total energy costs for Nevada.” In fact, the program was even found to have no real benefit from the solar user perspective. 

Even when considering the “non-monetized benefits” of renewable generation the net-metering program still has little to no positive impact. Factoring in “externalities and non-monetized health benefits of reduced air emissions from self-generation, does not significantly change the results…for the costs and benefits” of net metering for Nevada overall. The study concludes, “There is no substantial net emissions reduction or additional health benefits attributable to NEM systems.”

Nevada’s net metering program is clearly all cost and no benefit. Not only does the program shift $36 million in costs annually onto non-solar customers, but also increases total energy costs for the state while having no impact on emissions or health.

As such, one can only wonder why Nevada, or any state for that matter, would continue net metering programs that quite literally have no beneficial impact on consumers or the environment, and instead serve only to burden residents and the state with higher energy costs.  


Photo credit:  Marufish

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