The biggest debate in solar power this year has been over net metering. That’s the policy in 43 states that lets utility customers who install solar systems feed energy they generate into the grid if they don’t need it at the time they’re generating it. They then get a credit on their power bill for that excess energy, which they can use when the sun goes down.
Net metering has been crucial to solar adoption in the U.S. Without it, many people who now install solar would be unable to do so.
The net metering controversy
Why, then, would the policy be so controversial? To answer this, you need look no further than the utilities. Their business model is threatened by the rapid spread of rooftop solar, because when utility customers generate their own power, those customers end up paying a lot less to the utility. As more people go solar, utilities are forced to raise rates on those who don’t. That makes solar even more attractive, and more people opt for solar power -- forcing utilities to raise rates even more. This pattern has become known as the utility death spiral, and it has utilities worried.
Of course, that’s not the argument utilities use when fighting net metering. Instead, they say that net metering customers are passing on to other customers an unfair burden of transmission and distribution charges. Because the common myth is that solar is only for the rich, the utilities are joined by some customer advocacy groups in expressing concern that under net metering, the poor are subsidizing the rich. A recent report by the California Public Utilities Commission seemed to uphold that claim.
But that narrative just doesn’t hold up under current conditions. Solar has become much more affordable in recent years. It’s true that when solar was a newer technology, high-income people were the early adopters. Now, the picture has changed dramatically.
Report shows rise of solar among middle class
A new report from the Center for American Progress, Solar Power to the People: The Rise of Rooftop Solar Among the Middle Class, shows just how much things have changed. To determine what’s really happening, researchers looked at data from the Arizona Public Service (APS); the California Solar Initiative (CSI); and New Jersey’s Clean Energy Program (NJCEP), databases. Arizona, California, and New Jersey lead the nation in solar installations, so they’re good representatives of national trends.
And the findings? Contrary to the myth that solar is for the rich, the report found that a majority of solar installations are happening in middle-class neighborhoods.
That’s already major news, but let’s break it down into the main points:
To be specific on what’s meant by middle-class: 60% of new installations in California and New Jersey, and 80% in Arizona, are in neighborhoods with median incomes from $40,000 to $90,000.
A particularly interesting finding in light of the fact that solar deployment is increasing rapidly: The areas with the most growth from 2011 to 2012 had median incomes ranging from $40,000 to $50,000 in both Arizona and California and $30,000 to $40,000 in New Jersey. Those families can hardly be called wealthy.
And here’s another possibly surprising finding: The distribution of solar installations in all three states aligns closely with the population distribution across income levels -- showing that solar is not just for the rich but is spread evenly among the population. In other words, solar is for everyone.
The benefits of solar power and net metering
This report should go far to show that net-metered solar provides benefits to all of us. In addition to the main findings, the report makes the important point that “solar technology provides the same benefits to the grid regardless of the homeowner’s income level” -- benefits like avoided fuel costs, reduced transmission and distribution costs, emissions-free energy production, and generation to offset use during peak energy-consumption times. As the report notes, even some utilities see the value of those benefits.
The conclusion? The implications go far beyond showing that net metering does not result in the poor subsidizing the rich. Quite the contrary: it’s policies like net metering that have made solar power a good deal for the middle class, too. Perhaps we’re seeing the other side of the utility death spiral. We could call net metering a positive feedback loop for utility customers. The more net metering and other good solar policies are implemented, the more people of all income levels can go solar. And the more utilities raise their rates in response to that, the more attractive solar becomes to people of all incomes. Net metering is an important tool in making solar available to everyone.