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Net Metering (also called Net Energy Metering, or NEM) is the most important policy driving the expansion of Freeing Energy’s core topic: small-scale, customer-owned solar and battery systems. Net Metering directly impacts the costs and availability of rooftop solar on homes and small-businesses in most states in the US.
Freeing Energy devotes several sections to Net Metering, its history, and why it has become so contentious. These include a Local Energy Bill of Rights (page 254) and a section called: Net metering: getting fair value for your solar kilowatt hour (page 237).
In late 2021, shortly after Freeing Energy was published, California proposed the most contentious Net Metering policy in US history, referred to as NEM 3.0.
Historically, California had been the leader in local energy. Freeing Energy highlights many examples:
But critics claim the newly proposed fees and low prices paid for excess solar will undermine the state’s leadership and risk collapsing the most vibrant local energy market in the US.
Freeing Energy is an ideal starting point and reference guide for anyone looking to understand the issues around Net Metering and why it is dividing groups that have otherwise been allies for decades. The book covers a wide set of issues, several of which are summarized below.
Cost shifting is “one of the most effective arguments utilities are making to slow local energy and net metering. It invokes the morality of social justice by suggesting that wealthy homeowners installing solar will shift the costs of maintaining the grid to low-income families in the form of higher electricity rates.“ (page 233).
Is this really a factor? Freeing Energy offers several new perspectives that are largely overlooked by experts and the media.
From the book, “I believe the best role for local energy champions like us is to do everything we can to help the electric monopolies find their way to a future where everyone wins.“
The section Reinventing Electric Monopolies lays out a high level set of approaches that can better align utility interests with local energy owners, paving the way for utilities to remain a vibrant and successful part of a more decentralized future grid (page 255).
A century ago, the one-time assistant to Thomas Edison, a man named Samuel Insull, paved the way for a grand bargain—a “social compact”—that gave electric utilities one of the best deals in business: they were granted exclusive monopolies and protected from competition in exchange for oversight from government regulators. This unique business model has been so successful that it lasts to this day, largely unchanged (page 18, 61, 227, and 238).
Freeing Energy includes:
Freeing Energy lists 18 reasons why local energy is becoming irresistible, including:
But the declining costs are the biggest reason local energy is unstoppable: small-scale solar systems are dropping to a fraction of the projected price of electricity from the grid (see the following graph).
In the meantime, Net Metering remains an essential bridge that ensures customers get the lowest cost energy and that utilities have a chance at becoming essential parts of our future electricity system.
Freeing Energy explains how electric utilities see local energy as an existential threat that leads to their demise, including quotes from a now-buried 2013 electricity industry white paper:
“The electric utility sector has not previously experienced a viable disruptive threat to its service offering. . . . However, a combination of technological innovation, public/regulatory policy, and changes in consumer objectives and preferences has resulted in distributed generation [“local energy”] and other DER being on a path to becoming a viable alternative to the electric utility model.” (page 231)
Bill Nussey pulls together research and insights from top experts on clean energy policy including:
From Freeing Energy:
“A war is brewing. It is big versus small. Control versus choice. Powerful corporations and entrenched government bureaucracies versus individuals and communities. The old business model is a dinosaur— slow, cold-blooded, seemingly invincible but vulnerable to rapid change. Local energy is the age of mammals. Smaller. Faster. Self-regulating and adaptable to different conditions.“
“In nearly all ways, the future of electric monopolies is in their own hands. They can embrace the coming changes and play an essential role in our clean local energy future. Or they can resist change, foist unfair fees on local energy owners, hire more lobbyists, and when all the dust settles, still find themselves on the wrong side of history—sidelined and irrelevant.“
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