May 18, 2015
The path to a sustainable solar future could be eliminating net metering and focusing on large-scale solar plants, according to a report from the Massachusetts Institute of Technology Energy Initiative.
The report, written by a multidisciplinary team of MIT researchers, has received media attention from outlets including The Washington Post, Reuters and Greentech Media, a prominent clean-energy industry outlet:
Researchers recommended a change that would eliminate the inefficiency in current policy that, for instance, subsidizes power generated by a residential rooftop system at a higher rate than power generated by a nearby utility-scale plant.
“Subsidizing residential-scale solar generation more heavily than utility-scale solar generation, as the United States now does, will yield less solar generation (and thus less emissions reductions) per dollar of subsidy than if all forms of solar generation were equally subsidized,” the report says.
The MIT team also proposed reforming policies such as net metering, which may become unsustainable, thus potentially slowing adoption of residential solar.
When paired with current utility pricing models that combine distribution costs with energy costs, net metering creates a subsidy to residential rooftop customers that is paid by other customers on the grid, the report says. New pricing models need to be designed that are widely viewed as fair and effectively share the cost of the grid among customers.
“Recovering distribution costs through a system of network charges that is more reflective of cost causation and that avoids the current direct dependence on electricity consumption would remove the extra subsidy and prevent this cost shifting,” the report concluded.