Photovoltaic panels are a great way to generate electricity using the sun–but solar has an obvious drawback in that we tend to use the most electricity when the sun isn’t shining (i.e., at night). The answer is a grid-tied PV system: something that’s good for individual homeowners as well as utility companies looking to create distributed solar. But what’s the best way to compensate residential solar-users who tie into the grid? A new study from the Lawrence Berkeley Lab in California suggests that net metering may be the way to go.
With a net metering billing arrangement, customers with on-site PV systems can offset their monthly consumption (from the utility company) with electricity generated from their own solar array, whether or not the demand for power at their house coincides with when their systems are generating power. Net metering has been used in conjunction with other policy support mechanisms to jump-start the market for distributed PV in California, currently the largest solar market ing the US. The study found that, depending on the size of the PV system, customers found a utility bill savings of $0.19 to $0.25 per kWh with net metering.
The study compared these savings to those from other solar compensation schemes currently under consideration, including a feed-in tariff–under which all PV generation is compensated at prices based on California’s Market Price Referent (MPR)–and an alternative compensation mechanism that would allow customers to offset up to 100 percent of their consumption within each hour, but would have to sell any hourly excess PV generation to their utility company at would be compensated at MPR-based prices. The findings indicate that these mechanisms would result in a 6% to 54% percent reduction in bill savings relative to net metering for the median customer.