Fair play for rooftop solar

Photo by Bill Mead on Unsplash

You’ve decided to invest in solar panels for your house. Then you run into reality. Solar only shines during the day (and during sunny weather). In order to have electricity when the sun goes down you need extra equipment and a large battery bank. This can push the price of a solar installation up by as much as 60%.

There’s a better alternative to expensive battery backup. You could plug your solar panels into the grid. Essentially you are using the grid as a giant battery. Your meter tracks both how much electricity you generate and how much electricity you draw from the grid. This is called “net metering.” And this giant battery needs zero maintenance on your side and is essentially available free of charge. 

Historically governments and utilities were not interested in investing in solar electricity themselves. It was untried and too expensive. Instead, as a sustainable gesture, they encouraged wealthy homeowners to try solar. There were government and utility incentives for spending your own money doing the right thing for the planet. That was fine, as long as there weren't that many houses with solar. However, the pace of residential solar is accelerating. BC is expected to generate 62 GWh through net metering in 2024 and 1,600 GWh by 2048.

Net metering can be done in a number of ways. In BC utilities offer a straight one for one: for every kilowatt hour of electricity you contribute, you can pull a kilowatt hour of electricity off the grid. However this plan may need to be tweaked in the near future. Sometimes net metering policies are viewed through a partisan lens -- utilities are evil for changing anything about net metering and homeowners and solar installers are the good guys (saving the planet) and deserve incentives from the utility.  It’s more complicated than that.

There are two problems with the net metering model. The first is that the model doesn’t take into account the fact that the value of electricity changes drastically during the day. Unfortunately sunset hits about the time that people start their peak use: turning up the heat, cooking dinner, starting a load of laundry. The daytime electricity you contribute is worth one price and the electricity you take from the grid at 5 PM when electricity is much more expensive.

The second problem with current net metering is the cost of maintenance for the utility. If you are a net metering customer with a well designed system, there will probably be times where you produce so much energy you don’t owe the utility for any electricity at all. The problem is that there is a lot more going on behind the scenes. The utility has to make the rounds of all the transmission and distribution lines and trim all the trees. The utility has to replace aging substations, transmission and distribution equipment. Normally utilities bundle these costs into the charge for kilowatt hours, collecting enough money to cover these costs (and make a profit). When you use zero electricity under net metering, you are contributing zero money to grid maintenance. 

There’s a conundrum here. The type of people who put solar on their roofs are relatively wealthy. They have larger houses and according to BC Hydro their electricity bill is 40% higher than an average customer. When they generate enough electricity to zero out the charge on the electric bill, they aren’t contributing to utility maintenance. That invariably raises rates for everyone else. This pushes more people to install solar on their house…which results in less money for maintenance…then the utility raises prices on non-solar customers. It’s estimated that two thirds of the rate rises in California are due to rooftop solar. The current situation in BC isn’t dire, but with the expected growth, net metering will be an issue. 

In March 2023 BC Hydro held a workshop on net metering rate design and intends to file a rate application addressing “under-recovery of costs” caused by net metering. Let’s hope the outcome supports future renewable installations and ensures that everyone pays a fair share of utility costs.