Net metering benefits all ratepayers, two reports conclude

CARSON CITY — Two separate reports released Monday, one from the Brookings Institution and the other from SolarCity and the Natural Resources Defense Council, both conclude that net metering is a benefit to all utility ratepayers.

“According to our research, multiple analyses in multiple states around the country are in fact concluding that net metering is a net benefit for the grid and non-solar using customers — not a net cost,” said Mark Muro, a senior fellow and policy director for the Metropolitan Policy Program at Brookings.

The report by Muro and Devashree Saha uses evidence from other states to evaluate the ongoing dispute in Nevada that net metering payments to rooftop solar customers represent an unfair cost shift to other ratepayers.

The second report concludes that rooftop solar provides a net benefit of $7 million to $14 million per year to all Nevadans whether they have solar or not. The higher $14 million figure includes what the study says are conservative estimates for environmental and health-related benefits.

State regulators earlier this year adopted a new rate class for rooftop solar customers after determining that net metering customers receive a subsidy from non-metering customers of about $16 million a year. The new rates have brought the rooftop solar industry in Nevada to a standstill.

The Brookings report found that the new rates have resulted in new residential solar installation permits plunging 92 percent in Nevada in the first quarter of 2016.

But the study found that while the conclusion is not unanimous, net metering frequently benefits all ratepayers when all costs and benefits are accounted for.

“Regulators everywhere need to put in place processes that fairly consider the full range of benefits (as well as costs) of net metering as well as other policies as they set and update the policies, regulations, and tariffs that will play a critical role in determining the extent to which the distributed solar industry continues to grow,” the Brookings study says.

The SolarCity report notes that the Nevada Public Utilities Commission in 2015 identified 11 categories of benefits and costs that should be evaluated to asses the impact of net metering. But the new tariff that took effect Jan. 1 considered only two categories – energy and energy losses – because of insufficient data or time to evaluate the others.

“Shifting the utility’s core financial incentive from its current focus of ‘build more and sell more to profit more’ towards a future state where the utility is financially indifferent between sourcing utility owned and customer-driven solutions would neutralize bias in the utility decision-making process,” the SolarCity report concludes.

Jon Wellinghoff, a former Federal Energy Regulatory Commission chairman who is now chief policy officer for SolarCity, said the report was vetted by several prominent institutions, including Stanford University.

Wellinghoff said the study will be submitted to the PUC in two Northern Nevada rate dockets with the expectation that the information will be factored into the analyses. The next Southern Nevada rate case won’t come until 2017, but he expressed the hope that the information could be put to use sooner than that.

“If you just look at the benefits that relate to the utility system, we are lowering their costs by enough to see a net benefit of $7 million a year,” Wellinghoff said.

“We would like to re-institute business in Nevada,” he said. “We’ve gone from thousands of rooftop solar applications a month to 15 to 20 a month. No one in the industry can live on that.”

Contact Sean Whaley at swhaley@reviewjournal.com or 775-461-3820. Find him on Twitter: @seanw801

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