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Net Metering

December 20, 2021
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WRITTEN BY Dr. Alan Moss and Dr. Tomy Granzier-Nakajima

Executive Summary

The “Net Metering and Easy Connection Act” (Section 386.890, RSMo) allows customers who own renewable energy generators (e.g., solar panels) to sell electricity that they generate to utility companies. When calculating utility costs, the customer is then charged for the difference in electricity that they provide to the utility company and the electricity that the utility company provides to the customer. The majority of customers who participate in net metering use solar panels due to relatively low costs, solar panel efficiency, and ease of installation. Several state-commissioned reports have found limited negative impacts for customers that do not participate in net metering as a result of utility companies attempting to recoup costs due to reduced revenue and fixed operational costs.

Science Highlights

  • Net metering laws allow electrical utility customers to earn a return on investments in renewable energy systems such as solar panels.
    • Compensation policies for utility customers vary widely between states.
  • Home solar panel usage has been rapidly growing during the last decade due to reduced panel and installation costs.
  • Community solar is one possible way to minimize disruption to utility business models while promoting access to solar energy.

Limitations 

  • There is no scientific consensus on the ideal rate structure for energy customers.
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