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As Legislation To Increase Solar Net Metering Cap Gets Reduced, Report Shows Solar Energy Benefits Vastly Outweigh Costs

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Trenton–Homes and businesses with solar panels deliver more value to power customers and society than they receive through programs like net metering, a report said today, countering increasing complaints that solar homeowners don’t pay their fair share. The report comes in the hectic final days of the Legislative session before summer recess, as the Legislature considers bills to increase the net metering cap for New Jersey.

“Solar is a bright spot for New Jersey, but the continued growth of the solar industry right now is tied to expanding net metering,” said Doug O’Malley, director of Environment New Jersey. “We should be encouraging more solar, not penalizing it. The initial Senate legislation of a 4% net metering cap should be a floor, not a ceiling, for expanding solar.”

The Environment New Jersey Research & Policy Center report, Shining Rewards: The Value of Rooftop Solar Power for Consumers and Society, comes as the State Assembly is considering legislation to increase the net metering cap to 2.9%. The full Senate passed legislation to increase the net metering cap to 4% this December for total annual kilowatt-hours, after initial legislation called for a 7.5% cap for electric peak demand. The legislation (S2420/A3838) would revamp the rules governing net metering, which currently has a net metering cap of 2.5%, which would allow utilities to cease offering net metering when the generating capacity by net metered customers equals 2.5% of the state’s peak electric demand.

“Net metering is one of the most cost effective ways to help build more solar installations in New Jersey. We need net metering to move solar forward, however, by reducing the amount of net metering, this bill is actually an impediment to solar. Under these amendments, it will not advance net metering, and therefore not advance solar in New Jersey. We need to amend this bill to make it stronger and the threshold to be at least 4 percent. Vermont just passed legislation allowing net metering up to 15%,” said Jeff Tittel, Director of the New Jersey Sierra Club. This bill is important because it gives incentives for people to put solar on their homes and businesses. We must strengthen the bill because it allows for not only increased payment for people who want to install solar, but it will also help them get the financing. We need to expand solar projects in New Jersey including the renewable portfolio standard if we want to keep solar moving forward in New Jersey. New Jersey used to have 10,000 jobs in solar and now we have 5,500. We used to be 2nd in the nation for solar installations in the country and now we are 7th.  We need to amend this legislation to move solar forward and help create clean energy as well as more jobs. ”

Net metering programs credit solar panel owners at a fixed rate -- often the retail price of electricity -- for providing excess power to the grid, similar to rollover minutes on a cell phone plan. The arrangements have helped solar energy skyrocket across the country, but in recent years utilities and their allies have ramped up their attacks on the programs, declaring them unjustified “subsidies.” As of March 2015, 44 states and Washington, D.C. have developed mandatory net metering rules for at least some utilities

Today’s report tells a different story. Of the 11 net metering studies reviewed, all found that solar panel owners offered power customers net benefits, such as reduced capital investment costs, avoided energy costs, and reduced environmental compliance costs.

“Distributed solar power means we don’t have to build expensive new power plants; it means electricity is delivered more easily and efficiently; and it helps save the environment to boot,” said O’Malley.

Eight of the 11 studies also found that the value of solar energy was higher than the average local residential retail electricity rate. The median value of solar power across the studies was nearly 17 cents per unit, compared to the nation’s average retail electricity rate of about 12 cents. In other words: utilities that provide retail rate net metering tend to underpay solar panel owners, not subsidize them.

“Solar power’s rewards are far greater than its costs,” said O’Malley. “That’s why it's imperative our state leaders promote policies to encourage the growth of solar, not stifle it."