Grant Bosse: Net metering -- Too much of a good thingBy GRANT BOSSE
August 20. 2018 9:47PM
Do you like apples? No, this isn’t a “Good Will Hunting” joke. Imagine that you liked apples so much that they were a big piece of your monthly household budget.
After spending $100 to $200 every month, you decide to save money by growing your own. You invest several thousand dollars in a backyard orchard. Now every autumn, you harvest your own apples. The trees are so productive, in fact, that you end up growing far more apples than you can eat.
So you go back to the grocery store where you spent so much money to buy fresh apples in February, and it buys your apples for the same price you paid.
This is net metering.
Have my pop culture reference and fruit anecdote tricked you into reading about electric utilities?
Net metering allows electric utility customers who generate their own power, such as through rooftop solar panels, to sell the power they can’t use back to the grid, offsetting the cost of electricity they buy from the utility when the sun isn’t shining.
New Hampshire’s net metering program is currently limited to customer-generators with a peak capacity of 1 megawatt (MW). Senate Bill 446 would increase that threshold to 5 MW, and lock in those benefits for projects built after July 1 for the next 12 years. SB 446 sailed through the Senate and the House on voice votes, but was vetoed by Gov. Chris Sununu in June.
Allowing larger generators to become eligible for net metering would expand the program from homeowners and small businesses to commercial and municipal customers. Much as with entitlement programs such as Medicaid and Social Security Disability, expanding eligibility for net metering would have expensive consequences.
The flaw at the heart of net metering is that the electricity bought by the customer does not have the same value as the electricity sold back to the grid.
The apple metaphor only goes so far, of course, but it does help us think of electricity as a perishable item. You have to use it when it is generated.
Power plants receive forward capacity payments to guarantee that their power will be available. But utilities can’t count on customer-generators to crank up the wattage when other customers need it most. The times when a customer has excess power to sell back to the grid are usually when the grid needs that power the least.
Because the price of power on the spot market fluctuates, utilities end up paying a premium to buy back power from net metering customers, and that expense is passed on to other ratepayers.
On a small scale, these net metering subsidies don’t add up to much. But as net metering expands, it quickly becomes too much of a good thing. Sununu estimates that SB 446 would cost New Hampshire ratepayers $5 million to $10 million annually to subsidize large-scale energy producers. That’s a bad idea as New Hampshire homeowners and businesses struggle with high electricity costs.
After 40 years of limping along as a small, subsidized stepchild of the electric power generation industry, solar is edging closer to being a commercially-viable alternative to fossil fuels.
It is possible to expand net metering to large-scale solar projects without shifting the burden to other ratepayers, if solar producers would stop being so greedy. Would they be willing to accept the spot price for the power they produce when they sell it back? The apple you buy in February is more expensive than the one you want to sell back to the store in September.
The other alternative is to perserve your apples so that you can enjoy them until the next harvest. That’s why battery technology could unlock a clean, distributed power grid. If we could develop a safe, affordable battery that could store a few days’ worth of power and fit in the basement, we could literally stockpile solar energy for a rainy day.
This would insulate the power grid from short-term blackouts, and ease the price spikes from peak demand. Customer-generators could sell their excess power back to the grid when it’s really needed, and get a good price for it.
The Legislature should sustain Sununu’s veto of SB 446 rather than force ratepayers to subsidize large-scale solar.
A market-based net metering system would be cheaper, cleaner, and as American as apple pie.
Grant Bosse is editorial page editor of the New Hampshire Union Leader and Sunday News. Email him at email@example.com and follow him on Twitter @grantbosse.