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Net Metering

February 22, 2022
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WRITTEN BY Dr. Tomy Granzier-Nakajima and Dr. Alan Moss

Executive Summary

The “Net Metering and Easy Connection Act” (RSMo 386.890) 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 choose not to or are unable to participate in net metering as a result of utility companies attempting to recoup costs due to reduced revenue and fixed operational costs. Senate Bill 763, filed during the 2022 regular legislative session in Missouri, would establish a task force to research and compile a report related to net metering.

Highlights

  • Net metering laws allow electrical utility customers to sell electricity that they generate back to utility companies.
    • Compensation policies for utility customers vary widely between states.
  • Across the United States solar panels accounted for 97% of the electricity generated as part of net metering in 2018.
    • 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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