Net-Metering in a Nutshell

Let’s take a moment to get you up to speed on what net-metering is, and why it is important for the democratization of the energy grid.

What is net-metering?

Net-metering describes how energy companies credit solar owners for the energy they produce and feed into the grid. When a home or business installs solar, it typically remains connected to the grid because during the day, the solar array is producing a lot of energy – much more than the building is likely using – and this unused energy flows to the grid to be used by other consumers. At night, when the solar array is not producing energy, the home or business draws from the grid again. Because energy you produce during the day is supplementing the energy in the grid that companies like Duke or CenterPoint are selling to your neighbors, the energy company credits you for that energy.

What is SEA 309?

Signed into law in 2017, SEA 309 allows energy companies to credit solar owners with only a fraction of the retail value of the energy they produce. The same energy that was once valued at $0.11 per kWh is now valued at only $0.03. That means during the day you are producing energy that is valued at about a quarter of the cost of the energy you use at night. What does that mean for your energy bill? Well, you still have to pay the energy company full retail value for the energy you draw the grid, but they pay you only wholesale value. In short, you can expect to pay a lot more and take a lot longer to break even on your investment in a solar array.

But what about the energy company?

If you read an energy company’s side of the story, you might be told net-metering is unfair to them and their other customers. But actually, distributed solar (think “rooftop solar”) actually helps the grid and the energy company that manages it in several ways.

First of all, distributed solar reduces the distance between the production site and the consumption site, reducing ware and tear on the grid. Think of it this way. A central point of production like a power plant is typically far from the point of consumption, like a household on the other side of town, and for the energy to get there it has to travel across a long network of power lines. Distributed points of production, like the solar panels on your roof, only has to travel a short distance to reach the next point of consumption, likely your neighbor’s house.

Secondly, solar produces energy at peak demand times. To meet the daytime demand, energy companies often have to open “peaker plants” with a high operating cost during times where demand exceeds their usual production. Distributed solar, however, helps to meet that demand without additional cost or environmental impact.

And finally, why should you sell your energy at a loss? Your rights as a property owner allow you to increase your energy independence, and that shouldn’t mean selling your excess energy at less than you purchase it for.


Decision will restore fairness to the billing method used to compensate rooftop solar owners

INDIANAPOLIS – A broad coalition of solar companies, environmental and consumer advocates, led by the Indiana Office of Utility Consumer Counselor (“OUCC”), has prevailed at the Indiana Court of Appeals in a case challenging approval by the Indiana Utility Regulatory Commission’s (“IURC”) of CenterPoint’s “excess distributed generation” (“EDG”) tariff for rooftop solar and other DG customers. CenterPoint
was the first Indiana utility to file for approval of an EDG tariff following the state legislature’s overhaul in 2017 of net metering for customers of Indiana’s five investor-owned electric utilities.

That law—SEA 309—phased out retail rate net metering and replaced the former 1:1 kilowatt-hour bill credit with a much smaller credit based on 125% of the utilities wholesale rate. That change in compensation resulted in a bill credit that is approximately 70-80% lower than what customers receive for retail rate net metering. However, as noted by the Court, the law did not change the method by which “excess” distributed generation would be calculated and the credits applied to customers’ monthly electric bills.

The law defined EDG as the “difference between” the energy delivered to the customer from the grid, or “inflow”, and the energy delivered by the customer to the grid, or “outflow”. In other words, while the law changed the bill credit rate, it still required utilities to net inflow and outflow during each billing period to determine the number of kilowatt hours of “excess” distributed generation to which the smaller credit rate would be applied.

By contrast, the CenterPoint EDG tariff approved by the IURC attempted to change how the bill credit was calculated on customers’ monthly bills by eliminating this netting altogether, replacing it with a tariff provision that charged DG customers the retail rate for every kWh delivered by the utility and credited customers at the much lower 125% of wholesale rate for every kWh of energy delivered by the customer to the grid. If approved for all of Indiana’s investor-owned electric utilities, this proposed EDG tariff provision was expected to drastically slow down rooftop solar adoption in the state. The Court of Appeals rejected the CenterPoint tariff provision because it violated the plain meaning of SEA 309.

“While there is more work ahead of us, we are thrilled with the outcome”, stated Kerwin Olson, Executive Director of Citizens Action Coalition. “We sincerely thank the OUCC for the crucial role it played in standing up for Indiana consumers and achieving this win.”

Will Kenworthy, Regulatory Director, Midwest for Vote Solar, served as an expert witness in the CenterPoint EDG proceeding before the IURC. His testimony in the case objected to the instantaneous netting interval. He stated that “fair, accurate compensation is the key to expanding residential solar. CenterPoint’s proposal was neither fair nor accurate, and I’m glad the court recognizes that. Monthly
netting makes sense and is a win for Indiana ratepayers who use their hard-earned money to add more solar to the grid.”

“This is a very good win for Indiana consumers investing in the clean energy transition,” said Brad Klein, Senior Attorney with the Environmental Law & Policy Center. “It will guide the development of EDG tariffs for the rest of Indiana’s electric utilities and will create needed stability and certainty for the rooftop solar industry and Indiana consumers.”

Solarize Indiana Board member Mike Mullett concurred, hailing the Court’s decision as a “critical victory for the rule of law which upholds the plain meaning of SEA 309 and thereby gives effect to the clear legislative intent behind the law to reduce but retain a financial incentive sufficient for retail customers to continue to invest in innovative distributed solar technology.”

“This decision comes at a critical time for the Indiana solar industry. Solar companies testified that CenterPoint’s proposal would have a devasting impact on both solar/DG providers and their customers,” said Laura Ann Arnold, President of Indiana Distributed Energy Alliance (IndianaDG). “Because there are other similar tariffs already approved or pending, this decision has potential statewide impact much
larger than SW Indiana where CenterPoint operates.”

“This decision is good news for everyone who wants to see a cleaner energy system in Indiana that puts consumers first,” said Zach Schalk, Indiana program director for Solar United Neighbors. “Rooftop solar benefits everyone by producing homegrown, clean energy close to where it’s actually needed. Protecting traditional monthly netting puts rooftop solar within reach for more Hoosier families.”

A copy of the opinion from the Court is available here.

Contact information:
Laura Ann Arnold, IndianaDG, (317) 635-1701, laura.arnold@indianadg.net
Mike Mullett, Solarize Indiana, (812) 350-0707, mullettgen@aol.com
Will Kenworthy, Vote Solar, (704) 241-4394, will@votesolar.org
Zach Schalk, Solar United Neighbors, (317) 268-2099, zach@solarunitedneighbors.org

Renewable Energy Day and the Bills you Need to Watch

Last week, advocates from all walks of life gathered at the State House to urge legislators to pass a number of renewable energy bills this session.

But there’s work left to be done. These bills need to be granted a hearing, and there’s only a week left! Now is the time to contact your state legislators to let them know how important these bills are to you.

Read more about each of these bills and learn what they do to secure a future for renewables here:


Top Stories on the New Solar Bills

Read more about the new bills introduced to the State House & Senate to save solar in Indiana!

Indiana Public Media: Lawmakers announce bills to provide better access to solar at Renewable Energy Day

Statehouse File: Climate advocates call for net metering, other legislative action on renewable energy

WBIW: Sen. Alting files climate legislation for youth organization ahead of Jan. 18 Climate Action Event

Robert Cooper Audubon Society presents conservation awards

Congratulations to our very own John and Carolyn Vann at Solarize East Central Indiana for being awarded that Richard Greene Public Service Award in celebration of their hard work as solar advocates and educators!

Read more about the conservation awards in this star press article.


Viewpoint in the Herald Bulletin: Deadlines nearing to install solar panels at home, business

John and Carolyn Vann of Solarize East Central Indiana alert Hoosiers to two upcoming deadlines to install solar and claim the current federal tax credit and qualify for net-metering. Read the full article here.

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