Note To PUC: Changes to Electricity Rate Design Could Dramatically Impact the Future of Solar PV

A new report from the Department of Energy’s Lawrence Berkeley National Laboratory (LBNL) finds that the future growth of distributed generation solar PV is heavily influenced by retail electricity rate design – and that proposed changes to net metering rules and retail rate structures could harm increased adoption of distributed solar.

The report, titled Net Metering and Market Feedback Loops: Exploring the Impact of Retail Rate Design on Distributed PV Deployment, is meant to inform the public and utility regulators that about the effects of changes proposed by a growing number of states to their net metering rules and retail rate structures – changes fueled by worry that increased adoption of distributed PV could result in unwelcome financial impacts on utilities and consumers.

Ryan Wiser, one of the report’s authors, said utilities are primarily concerned that solar customers don’t always pay their fair share of fixed infrastructure costs. “Utilities sometimes claim that net-metered solar customers are unfairly subsidized under existing net metering rules, with non-solar customers paying a larger share of the fixed costs of the electric grid,” Wiser said.