{"id":56614,"date":"2024-03-06T14:17:00","date_gmt":"2024-03-06T14:17:00","guid":{"rendered":"https:\/\/stilltbd.fm\/uncategorized\/208-the-solar-net-metering-dilemma\/"},"modified":"2024-03-06T14:53:53","modified_gmt":"2024-03-06T14:53:53","slug":"208-the-solar-net-metering-dilemma","status":"publish","type":"post","link":"https:\/\/stilltbd.fm\/episodes\/208-the-solar-net-metering-dilemma\/","title":{"rendered":"208: The Solar Net Metering Dilemma"},"content":{"rendered":"

https:\/\/youtu.be\/DeTOmxIt87w<\/a><\/p>\n

Matt and Sean talk about how net metering affects solar adoption and if it\u2019s fair. Matt also talks with Spencer Fields from EnergySage about the ramifications of the California net metering changes, and more.\u00a0<\/p>\n

Watch the Undecided with Matt Ferrell episode, Why Solar Panels Aren\u2019t Unfair or a Scam https:\/\/youtu.be\/dPfpa2KqYk0?list=PLnTSM-ORSgi7uzySCXq8VXhodHB5B5OiQ<\/a><\/p>\n

Check out my achieve energy security with solar guide: https:\/\/link.undecidedmf.com\/solar-guide<\/a><\/p>\n

Visit my Energysage Portal to research solar panels and get quotes for free! https:\/\/link.undecidedmf.com\/energysage<\/a><\/p>\n

And find heat pump installers near you: https:\/\/link.undecidedmf.com\/energysage-heatpumps<\/a><\/p>\n<\/p>\n

YouTube version of the podcast: https:\/\/www.youtube.com\/stilltbdpodcast<\/a><\/p>\n

Get in touch: https:\/\/undecidedmf.com\/podcast-feedback<\/a><\/p>\n

Support the show: https:\/\/pod.fan\/still-to-be-determined<\/a><\/p>\n

Follow us on X: @stilltbdfm @byseanferrell @mattferrell or @undecidedmf<\/p>\n

Undecided with Matt Ferrell: https:\/\/www.youtube.com\/undecidedmf<\/a><\/strong><\/a><\/p>\n


\n \u2605 Support this podcast \u2605<\/a>
\n<\/strong><\/p>\n

Today on Still to be Determined, we’re going to be talking about the dilemma around solar net metering. Welcome everybody to Still to be Determined. This is the follow up podcast that follows in the wake of the mothership. The mothership of course being Undecided with Matt Ferrell. I am Sean Ferrell. I am the aforementioned Matt Ferrell’s older brother.<\/p>\n

I’m also just generally curious about technology and its impact on our lives. Luckily for me, that is the exact focus of Undecided with Matt Ferrell. And with me as always is that younger brother. Matt, <\/p>\n

Matt, how are you doing today? I’m doing well. How about yourself? <\/p>\n

I’m doing okay. We’ve had some ups and downs here in New York City, temperature wise.<\/p>\n

So I’ve had some ups and downs health wise. My body has <\/p>\n

decided to just permanently have a cold. Oh, that’s good. That’s a nice <\/p>\n

choice. And for that cold to move up and down in its impact, apparently in accordance with the temperature outside. So I have had days where I’m like, finally, I’m over it. Followed by a day where like, I feel like crap.<\/p>\n

Followed by a day of, finally, I’m over it. Followed by a day of like, here we go again. So, if I sound a little nasal, if, if I sound to you the way I sound to me, My most sincere apologies. So the focus of today’s episode is going to be Matt’s full discussion with Spencer Fields from EnergySage about the ramifications of California’s net metering changes that took place last year, right, Matt?<\/p>\n

That was 2023. They’re going to be going into effect later this year, and Matt sat down with Spencer Fields, who did a lot of number crunching, and they had a big discussion around the net metering changes and more. Before we get into that Matt, to initiate us into the video a little bit so that we all know what the heck it is you’re talking about.<\/p>\n

What is net metering? <\/p>\n

Well, net metering is, as a solar customer, you get solar panels put in your house and then that excess energy that you’re not using gets Put in the grid. If you’re a grid tied system, it gets put into the grid and used by your neighbors. Uh, how much money or credits you get back for all the kilowatts you put into the system is net metering.<\/p>\n

So here in Massachusetts, where I am, it’s one to one net metering. So for every kilowatt hour I put into the grid, I get one kilowatt hour basically erased off of my bill. Um, some states do things where it’s like, uh, they’ll pay you, uh, the open market rates for electricity generation, but they don’t. Give you money back for the transmission, so you might only get back 50 percent of the value of that energy you’re putting in.<\/p>\n

In some places, they don’t give you anything. So you get the big fat goose egg, you get no money back of any kind or any kind of credits. So it varies all over the place, but that in a nutshell is net metering. That’s what it is. It’s an incentive. to make people want to get solar panels on their home to help offset the costs because it’s up it’s very expensive up front but then over time because you’re getting that credit back on your bill you’re saving a huge amount of money and getting a little money back so then you end up like paying off your system faster.<\/p>\n

That’s the big incentive, right? So that would be credit <\/p>\n

in the form of, I put the panels on my house, I’m making my own energy. My energy bill is lower as a result of me producing electricity for myself during certain times of day. On top of that, any excess going into the grid then gets further removed from my bill.<\/p>\n

Do I have it? Correct. You, you, you just hit it on the head. Perfect. So why is it controversial? Because of that, it’s, it’s because the big, the big argument that’s made by a lot of utilities and fossil fuel companies lobbying local governments is making the argument that as that happens and that grows and more people do solar, they’re not paying their fair share.<\/p>\n

In the maintenance of the grid, and because they’re not paying their fair share for the maintenance of the grid, we have to raise the energy costs for everybody else. That’s the argument that’s made, and that argument is largely a myth. Um, it’s very frustrating when that argument’s made, um, but that’s why it’s controversial, because it’s like your neighbors are paying for your solar panels.<\/p>\n

That’s usually the argument that you hear. That’s the big controversy. Just <\/p>\n

gonna paint this issue with a very wide brush. Now, I always like it when people who are making money say, your neighbor is profiting off of you. I love that argument. Like I, here I am a billion dollar corporation, and I’m telling you, the customer, Hey, your neighbor’s not paying their fair.<\/p>\n

Now, excuse me <\/p>\n

while I go to my yacht. A billion dollar company that’s making higher profits than they’ve ever made in history saying your neighbor’s profiting off of you. Yeah. So, what <\/p>\n

have you done in the past on your channel that touches on <\/p>\n

this issue? We did a video, went really deep on a very specific aspect of this argument.<\/p>\n

It wasn’t a collective, like all encompassing video but it was called why solar panels aren’t unfair or a scam i’ll make sure to put a link to it in the description of the podcast but it’s It explores this whole argument of, do solar panels on my house actually cause electricity rates to go up for my neighbors?<\/p>\n

And this is going to be glossing over it in a high level. The answer is no. But as you get, you start to hit a certain threshold of number of people in the area that have done it, it can potentially start to skew those numbers. But how much it skews them is. It’s super tiny. It’s like a, the tiniest, tiniest amount per person that it’s going to skew things.<\/p>\n

So it’s not like me getting solar panels is going to jack your electricity prices up by 15%. It’s, it’s such a minor amount that it goes up. And you’d also need to hit a population of like, I think it’s 10 to 15 percent of a population would have to have solar panels in their home. And in most states in the US, you’re talking 1%, 2%, maybe 5%.<\/p>\n

States like California, they’ve hit that threshold, that 10, 15 percent market adoption. So that’s why they’re trying to wrestle with it because they’re hitting that point where it is potentially starting to impact energy costs. So there’s reasons why you have to address net metering and these incentives in a smart way, because to a certain extent.<\/p>\n

They aren’t fair, but they’re meant to jumpstart the industry, to jumpstart adoption. And then the question is, how do you ramp those incentives down? When do you ramp them down? How do you make it fair to the solar homeowner? How do you make it fair to the rest of the neighborhoods? It’s a very complicated issue And that video does try to grapple with a bunch of that.<\/p>\n

And on that note, let’s go now to Matt’s full discussion with Spencer Fields from Energy <\/p>\n

Sage. One of the things I was really eager to talk to you about was the impact of the net metering changes that happened in California. What kind, what, what have you seen in the data of what you’re saying for how has that impacted solar adoption?<\/p>\n

Yeah, totally. So. So first I’ll sort of give you the rundown of what our analysis and modeling shows the impact is from a savings perspective, and then can get into sort of the specifics of what we’re seeing from how it’s impacted demand. But when we first took a look at the net billing tariff, NEM3, and how it was going to change solar savings in California, what we saw was that it reduces export compensation.<\/p>\n

So how much you are making or receiving. or being credited for every kilowatt hour that you send to the grid by about 80%. And that means that over the course of, uh, you know, 20, 25, 30 years that you have your, your solar panels and that they’re actively producing electricity. That means that your savings are going to be reduced by like 60 percent over, over a 20 year period, which is pretty substantial.<\/p>\n

And so that moves a payback period from. Under the original, our, our initial modeling, it moves the payback period from, uh, about five or six years for solar. So how long it’s going to take for your investment to pay for itself and then just sort of be effectively printing saved money. Uh, it moves from five to six year payback period to a nine or 10 year payback period.<\/p>\n

There are a couple of important caveats to that. Number one is that if you add a battery, the payback period is actually the same as it is without. a battery and your 20 year savings are higher, even accounting for the added cost of installing a battery along with solar. Um, that’s really was the goal of the net billing tariff was to try to incentivize greater storage adoption and reduce the number of solar panel systems that were installed without storage.<\/p>\n

And I think, you know, I think the way that the tariff was designed, it’s um, it’s reasonably successful at that, whether or not that’s a good thing for the industry is neither here nor there, um, or, or sort of a, is a bigger discussion, I suppose. What that’s meant is that for the second half of this year, or really from, from May through December of 2023, we saw a 50 percent lower demand for solar in California than we did over the same timeframe in 2022.<\/p>\n

So in other words, after the net billing tariff went into effect in April of 23, through the rest of the year, That’s how much we saw demand drop is, is basically in half. There’s an open question of whether that’s, uh, delayed, deferred, or, um, you know, sort of decimated, I suppose, to stay in the alliteration, like, is it, is that demand actually going to rebound at some point in the future as solar prices go down or electricity prices increase or as interest rates drop again?<\/p>\n

Um, but that’s, that’s what we’ve seen. <\/p>\n

Okay. So it’s a headed, it’s had a chilling effect. on the solar adoption. Correct. But the way it’s designed, like you said, it’s meant to get more battery installations out there. So in that regard, it’s working for what it’s trying to do as far as the value to the homeowner.<\/p>\n

But by, but by incentivizing that It’s also increased the upfront cost of getting into solar, which is probably what’s scaring a lot of people off. <\/p>\n

Correct. Yeah. I think that there’s, and when you look at data from our own marketplace or from, you know, California DG stats is a great reference, um, or from any of the publicly traded companies that solar companies that operate in California, what we’re seeing, what you see in CADG stats is that post.<\/p>\n

The implementation of that billing tariff, uh, attachment rates for storage have been around 45 or 50 percent in California. So, in the second half of the year, attachment rates are around 50%. 45 percent on EnergySage, about 50 percent in other, uh, databases. Sunrun says that they’ve gotten it up to 80%, which is, which is pretty impressive.<\/p>\n

Um, I think just because of their, their specific Financing products that they call shift that goes along with, uh, uh, introducing a battery. So right. You’ve cut, you’ve cut the number of installs that are happening in half, but half of the ones that are happening now have a ticket price. That’s twice as much as it used to be, or 60 percent more than it used to be, depending upon how big of a battery you get.<\/p>\n

That said. And to your point, that requiring people to buy a battery in addition to solar does not exactly make solar more accessible or affordable, and it doesn’t really meet any targets or goals that are stated from either state level policy or administrators or federal level policy or administrators to say .<\/p>\n

Like, we want to increase access to solar to a wider population, and this doesn’t really achieve that. Which is kind of ironic, because the main argument that the utilities use to push for a change to net metering in the first place, is this notion of the cost shift. Which is that solar adopters, uh, by adopting solar, are pushing the cost to run the rest of the grid off on a smaller subset of people and thereby increasing their costs by going solar.<\/p>\n

There are very fierce debates about whether or not that’s true, but the particular study and consulting firm that The utilities used in the California Public Utilities Commission used in designing this successor tariff to net metering said that, yes, there is a cost shift. And that’s the whole basis of the argument is like, well, we don’t want to shift the costs onto lower income consumers of electricity, but instead now you’re making solar less accessible to anybody that is, you know, not, I think, high net worth.<\/p>\n

Right. <\/p>\n

Are there other net metering kind of tariff systems around the U. S.? That are similar to California, or are they kind of an outlier with what they’re doing right now? Yeah. <\/p>\n

What people say in the industry is that energy policy starts in Hawaii, goes to California, goes from there to New England, and then spreads to the rest of the country.<\/p>\n

Solar policy hasn’t quite, you know, uh, been dispersed throughout the country in quite the same way, but it. This type of policy did start in Hawaii, and it started in Hawaii for a different reason. It wasn’t so much the cost shift argument, it was more the fact that the Hawaiian electric grid is primarily run by diesel that’s imported to the islands, so it’s a very expensive grid to run and to maintain and so electricity prices are super high.<\/p>\n

You might know there’s a lot of sun in Hawaii so people were installing solar at a really high clip and that meant that there was so much solar on the grid during the day that the utilities said Hold on, you can’t export any more solar to the grid because we’re already oversaturated and we’re already overproducing the demand for electricity on the grid with solar that’s on rooftops on the various islands.<\/p>\n

And so they introduced something that was called a non export policy. And then it sort of transitioned from there into, I think it’s called CGS or CGS Plus. Anyways, it’s a similar type of. Tariff, where solar production that’s sent to the grid is compensated at a very low rate, or at least at a very low rate compared to the cost of electricity designed to incentivize people to not only install storage, but to maximize how much of their solar production is actually consumed on site.<\/p>\n

That’s, that’s, I think even more than installing storage. That was the goal of those tariffs. Yeah, it’s, it’s <\/p>\n

from my knowledge of how it’s been rolling out. It’s. Hawaii was a very reactive, we’re in a bad place because we have way too much solar, too fast. The grid is having trouble with this. We have to react to fix that.<\/p>\n

California seems to be trying to take the proactive approach of, we don’t want to end up in the position that they were in, so let’s get ahead of this. Right. And, and on your, on your note, New England, where I am, it’s like, I’m just waiting for the other shoe to drop of New England to kind of follow suit from California because it’s like, it feels like we’re gonna head that way sooner than later is my impression.<\/p>\n

But, um, I’m curious, are there any things that you’re seeing in other states, um, like Massachusetts or other New England states or anything like that, that might be wanting to <\/p>\n

go down this path? Yeah. Um, first of all, I didn’t know you were in, in New England also. I’m, you know, all of us are based in, out of the Boston office.<\/p>\n

I live in, in Worcester. So, uh, I’m <\/p>\n

not too far from you actually. Yeah. Where are you out? I’m out in Western Massachusetts, like near Amherst. Yeah. <\/p>\n

Yeah. Super cool. Yeah. We got, we got like. Three, four inches of heavy stuff overnight, but made for a, made for a, uh, a nice morning workout shoveling the driveway.<\/p>\n

Um, yeah, so, uh, I think, let’s see a couple of different, a couple of different aspects to the, to the question. One is like, you know, exactly Hawaii was reactive. California was proactive. I think there are two reasons why Hawaii or sorry, California was more proactive. One of which is that. They were increasingly in, in like mid spring, getting to the point where that duck curve was really starting to bottom out where basically because of the amount of rooftop solar dim, uh, because of the amount of rooftop solar panels that are already on the grid.<\/p>\n

In the morning, electricity demand begins to increase, but then as the sun comes up, it decreases, and then it bottoms out in the middle of the day. So very low to no demand on the system because of how much rooftop solar there is, as well as utility scale solar. And then as the sun goes down, The issue is that demand ramps up very, very quickly and the existing grid infrastructure isn’t really designed to meet fast changing or, or less predictable demand or swings in demand in the way that that level of solar adoption requires.<\/p>\n

And so I think that was one of the main talking points. The other one was obviously this whole cost shift notion, but at the end of the day, utilities make money by spending money and they make money by By passing those costs on to everybody who’s using energy on their system, uh, or that, you know, that’s purchasing electricity from, from that utility.<\/p>\n

And so if you reduce the amount of money that a utility can invest, Because you’re reducing peak demand, or because I as a homeowner decide to invest in solar on my own roof instead of the utility being able to invest in solar in a field, or if you reduce the amount of people who are actively paying for that electricity by .<\/p>\n

installing solar and having access to a one to one net metering program, what’s called reducing the rate base, then now all of a sudden you’re trying to distribute costs across a smaller subset of people. And that makes it harder for those utilities to then recover their costs or they have to keep increasing their rates at an even faster clip than they have been so far.<\/p>\n

And so that’s, that’s the utility argument. From a, from a cost perspective. That dynamic is not unique to California or Hawaii. That dynamic exists pretty much nationwide. There were some efforts a couple of years ago to push utilities to decouple their revenues and their incentives from how much energy they’re actually producing and selling.<\/p>\n

Uh, I think there was some really interesting dockets in Minnesota that, that didn’t necessarily get. Super far, but that was one of the states that was trying to pioneer an effort to decouple utility revenues from how much electricity they’re, they’re, uh, they’re selling. At this point, what’s, what’s sort of interesting is that electrification of everything is going to increase demand for energy and Presumably increased consumption from the grid, so utilities should be in favor of electrifying everything because that means that now all of a sudden their rate base increases and they can spend a lot of money to try to, to try to meet that demand.<\/p>\n

So there, there’s sort of these competing priorities, uh, pop, you know, environmental policies and targets and things at play that influence the direction that, that like utility and in particular utility tariffs and in particular solar tariffs are headed. You asked whether or not we’re seeing these things happen across the country.<\/p>\n

Yes, absolutely. Um, there are, a number of states have already moved away from what we call one to one net metering, where the value of a unit of energy sent to the grid is valued at the same amount of money as a unit of energy that you pull from the grid. A lot of places have introduced what they call non bypassable charges.<\/p>\n

Those could be anywhere From, you know, 2 to 7 or 8 cents per kilowatt hour. So depending upon what you pay for electricity, it could be a very small percentage or maybe a higher percentage of electricity. And the idea is you have to pay for that when you’re pulling electricity from the grid, even if you’re banking credits by sending solar back to the, back to your utility.<\/p>\n

Arizona’s reduced compensation, Michigan’s reduced compensation, Idaho just passed a net billing, uh, Regulation. I don’t know if the tariffs complete or if they just finalized the bill to make that happen. That was at the end of last year. Um, North Carolina did the same thing last year. Changed what their net metering tariff looks like.<\/p>\n

Uh, there’s sort of a bridge rate or you’re on time of use rates until 2027 and then it changes again. So, it’s definitely, we’re in. We’re in the era of utilities taking a look at what happened in California and saying, Hey, we could probably do that too. Um, I haven’t necessarily heard about it happening in Massachusetts.<\/p>\n

The utilities here mostly have just been increasing rates at a pretty steady clip. Um, but, but we’ll see. I think the first thing to go in Massachusetts were the Uh, we’re the incentives. So, you know, SREC 1, SREC 2,, the SMART program. And I think as those things diminished, it was like, okay, we’re, we’re, because we’re not incentivizing solar as much, we’re reducing demand, reducing demand more organically.<\/p>\n

Um, uh, yeah, I, I haven’t heard anything about National Good or Eversource pushing to, to do away with that metering. <\/p>\n

Right. I don’t know if, I don’t know how to phrase this question, but have you looked at like when you’re looking at all the different states that EnergySage is in? And you’re looking at the data of adoption rates.<\/p>\n

Have you looked at like normalizing the data to see how these different net metering schemes impact adoption? Like the states that have only give you basically wholesale electricity rates back, their solar adoption rate is 20 percent less than some other state that gives one to one. Like have you looked at it in that kind of a way?<\/p>\n

That’s a really interesting question. I haven’t done exactly that analysis, but the closest that I’ve gotten to it is I’ve looked at solar conversion rates by payback period and, and on quotes on EnergySage. So, you know, this is, this is within our own marketplace. This isn’t necessarily indicative of how things operate outside of our marketplace, but within quotes on EnergySage, solar quotes that have a payback period of five or six years.<\/p>\n

convert twice as much as quotes that have a payback period of over 10 years. So if you’re in a scenario like California, where you go from a five or six year payback period to a nine, 10, maybe even 11 year payback period, you’re going to reduce the conversion rates, you know, by 50 percent basically is what we’ve seen with.<\/p>\n

With, uh, data on EnergySage. That <\/p>\n

does answer the question. I mean, that’s, that’s normalizing it in a different way than I was thinking of it, but it’s, it’s the, you end up with the same thing. It’s that NetMeeting is all about helping you get that return, that return investment sooner than later. So that’s the bottom line.<\/p>\n

The longer the payback period because of less incentives means lower adoption. <\/p>\n

That’s exactly it. Yeah. Or people need to look for different reasons to drive adoption. We know that right now in historically the main driver of solar adoption and really all electrification products so far has been cost savings.<\/p>\n

So financial reasons, that’s the main reason people are interested. That’s the main reason people adopt. And. And, you know, if the economic case isn’t quite as strong as it used to be, then maybe you have to talk about other things like resiliency or independence or the environmental benefits and things like that.<\/p>\n

And, and that’s, that can be a tougher sell. <\/p>\n

This is kind of a, I don’t know if you’ll want to answer this question, but like, when you look at all the different net metering rules, is, is there a net metering scheme that you think? Is a good one. Is there, are there any out there that you think are kind of equitable?<\/p>\n

Is kind of, it’s kind of like balanced. <\/p>\n

Oh, that’s interesting. <\/p>\n

Because I mean, like, if, if, if I was asking, answering this question, like for me, I live in Massachusetts. I have one to one net metering. Right. I honestly don’t think one to one net metering is fair. I think as a homeowner, I’m benefiting from it, but I, it doesn’t feel balanced.<\/p>\n

I don’t think I should be getting that one to one, it should be less than that because you have the supply, energy generation, it’s like, okay, give me the generation cost back. But the supply, if I’m pulling from the grid, I should. be still paying for the supply that I’m pulling. You know what I mean? So it’s like, it doesn’t feel like one to one is fair to me.<\/p>\n

Yeah, yeah, totally. I, you know, also in Massachusetts, also have solar on my roof, also a one to one net metering tariff. And I will say that it’s increasingly not one to one because the rates in the summer are so much lower than they are in the winter. So it’s sort of sneakily now when I And producing electricity, it’s being compensated at whatever, 20 cents a kilowatt hour, but when I’m pulling electricity from the grid in the winter, uh, and, and I’m a net importer, it’s more like 38 cents a kilowatt hour, and so, so it’s sort of sneakily become not one to one net metering in Massachusetts, which has only happened in the last couple years.<\/p>\n

Again, Probably more fair, even though I don’t like that I finally had to pay an electric bill for the first time in five years, but like, yeah, like, like probably more fair because it’s, it’s more reflective of what the actual costs to operate the grid are in the winter. Right. We can, we can quibble about the winter fuel reliability program in Massachusetts and New England in general, and whether that’s necessary and whether those costs should be revisible.<\/p>\n

That’s neither here nor there. But I think in terms of like, what’s. What’s actually fair and equitable? It’s so, I don’t have a good answer. I think early on for early adopters, it has to be one to one net metering to begin to build the, uh, to begin to build the market. I think when you look at how other markets throughout the world have evolved, and in particular how they evolved in Europe, they primarily have feed in tariffs, which is much closer to a, A net billing tariff where it’s like, okay, this is what you’re being compensated for solar.<\/p>\n

That’s sent to the grid. It’s a fixed amount. Uh, that is reflective of. You know, the time when the solar is produced and also the environmental benefit and so on and so forth. Um, but you’re, but it’s a feed in tariff. It’s fixed export compensation, not necessarily net metering so much as net billing. I think that’s probably the direction that a lot of U.<\/p>\n

S. states will go. I think what happened in California is way too complex from that perspective. That’s the idea around it. But when you have, whatever it is, 576 different potential. Export compensation rates over the course of the year. No homeowner is going to understand that. That is not a tariff or a policy that is designed to be understandable by a homeowner.<\/p>\n

But I think there’s a way that you can build a tariff or a solar export policy or compensation structure that is understandable. It’s easy to Educate homeowners on how it works, you know, anything you send to the grid is worth this much, you’re still going to pay for whatever you bring from the grid, and at the end you’re billed on net.<\/p>\n

Easy. Done. Right? Um, so I think that’s probably the direction that, that things are headed. At the same time, there’s, there’s another piece of the conversation that’s like Well, also the cost of solar is much lower in Germany than it is in the US. And why is that? And well, it’s primarily the soft costs, right?<\/p>\n

We’re buying the same equipment at similar prices. It’s primarily on the soft costs, whether it’s sales and marketing or permitting and, uh, inspections and so on and so forth. And, and, and like the labor costs aren’t that different. So then that becomes this question of like, okay, well. Let’s, let’s try to do those things in parallel.<\/p>\n

Let’s try to reduce soft costs and make the upfront costs of solar lower and more accessible and more affordable while also thinking about what future rate tariffs look like that, you know, don’t actively disincentivize solar. There are other ways <\/p>\n

to get that five to six year payback period. Correct.<\/p>\n

That point without net metering, there are ways to do <\/p>\n

it. That’s exactly it. That’s exactly it. It shouldn’t just be a tariff design question. <\/p>\n

So from your experience, looking at the full solar picture, but also net metering, because that’s what we’re talking about specifically right now, is there anything in the data or feedback you’ve heard from customers or anything that’s surprised you <\/p>\n

around, around <\/p>\n

how net metering has changed people’s minds or how it’s affected the adoption rates?<\/p>\n

Is there anything about like the data you’ve looked at that was like, Didn’t expect that and kind of surprised you. <\/p>\n

Oh, that’s a really good question. Uh. Not exactly. I mean, I guess, I guess the, like, maybe the two things that I would say are, are, you know, number one, the fact that people are still coming to EnergySage to register for an accounts from California and that they’re installing storage 45 percent of the time.<\/p>\n

I really think that you, if you were installing solar in California under the net billing tariff, you should install storage much closer to 100 percent of the time. Granted, the costs are sort of prohibitive. Um. And so I don’t know how much of that is like education or messaging or the costs or the fact that it’s really difficult to finance things right now.<\/p>\n

So you don’t want to finance a project that’s, you know, two X what an alternative is that gets you most of the way there. Um, that, that was sort of a surprise to me is it’s just like installer and consumer behavior. I really thought that we were going to get closer to a hundred percent. Attachment rate of storage much faster in California.<\/p>\n

And then I think the second one is just like in a place like Texas where most of the utilities don’t have net metering and have very low export compensation rates. It’s, you know, increasingly one of the most interesting solar markets in the country, primarily from a like grid independence perspective.<\/p>\n

Like that’s the main one. The, the winter freeze a couple of years ago, really. Precipitated a lot of dem precipitated is probably the wrong word there, uh, just for the priors, uh, but, but led to a lot of solar demand from Texas sort of immediately, and we really haven’t seen those elevated levels of solar demand be diminished, and the economic case in in Texas is not particularly strong because of the export compensation rates, um, and the lack of net metering. And yet people are still going solar at a pretty high clip. And so I think it’s mostly like a, like we were talking about earlier, it’s not as much a financial cell, so much as an independent cell, potentially a resilience or a reliability cell.<\/p>\n

So that I think, that I think is probably. The, the best answers I can come up with. I was gonna say that <\/p>\n

one for me is a, a big surprise too. Yeah. It’s like the, the more, like I have a lot of people that follow my channel that are from Texas and there’s a lot of patrons I’ve got that are from Texas and they all have solar and they all talk about it.<\/p>\n

Whenever any one of ’em talks about it, it’s about energy independence. Yes, a hundred percent. That is the thing that they talk about. And so it’s like, it’s not about. The, the, the upfront cost. It’s not about necessarily even the environment. It’s about energy independence. It’s like installing a generator at your house.<\/p>\n

So it’s like installing a diesel generator. You install some batteries in a solar panel system <\/p>\n

in your room. It’s just more quiet, more reliable, and you don’t have to refill the tank. <\/p>\n

Yeah. So I think it is probably a messaging issue that we have to get past to try to get people to understand. Um, is there anything else about net metering that we haven’t talked about that you’d want to highlight or talk about?<\/p>\n

Yeah, I guess sort of the, the only other two things that I would, that I would want to talk about are number one, I think, I think it’s worth tracking that because a lot of utilities aren’t sure what the appropriate next solar tariff is, there, there is such wide variety in the way that these rates and tariffs are designed, but one thing that we’re seeing is pretty frequently and like happened in in north carolina for instance is a fixed monthly bill and so i think that’s that’s one where it’s like okay that’s probably not the right mechanism to recover costs but um they’re being introduced across the country and that’s worth paying attention to because those can really quickly change the equation especially if as is the case in north carolina The fixed monthly bill is based on the amount of solar you have, not based on like the amount that you consume or just, you know, a standard flat fee.<\/p>\n

But instead it’s based on the kilowatts of solar you have, which is really interesting and unique. <\/p>\n

So the big, so the bigger array that you put in your house. The more money you’re going to get. No, <\/p>\n

no, no. The more money you have to pay per month. The more money you have to pay. Okay. Yeah. <\/p>\n

Yeah. Wow. Yeah. Wow.<\/p>\n

That that’s counterintuitive. That seems really counterintuitive. It seems like it’s going to incentivize people not to get solar or to get the smallest array they possibly can. <\/p>\n

Right. Exactly. So, so maybe you go to 60 percent or 80 percent offset instead of a hundred percent offset, or instead of planning for, you know, electrifying other aspects of your home.<\/p>\n

So that’s, that’s something to keep in mind. And then I think the other, the other thing is just to say, you know, right now there isn’t a whole heck of a lot of urgency to go solar, like generally speaking. Because, um, prices are elevated from where they used to be a couple of years ago. They’re starting to come down again, but they’re still higher.<\/p>\n

You know, they’re still sort of on par with call it mid 2020 pricing. Um, interest rates are super high and the majority of people. Historically have financed their solar panel system with a loan, right? If you look at Wood Mackenzie data, they would say 60 to 70 percent of people are paying for solar with a loan.<\/p>\n

So you have these elevated prices, elevated interest rates, which means that it’s, it’s not as attractive of an investment now as it was even two, three summers ago. And the one thing that I think does drive a little bit of urgency with. Installing or investing in solar now is trying to get grandfathered into existing net metering policies.<\/p>\n

Recognizing that, you know, if you’re reading the tea leaves and following where the market is headed, most utilities are probably going to move away from one to one net metering if they haven’t already. And they’re likely to head the direction of net billing in some way, shape, or form. Maybe not California’s, maybe closer to Idaho’s, who really knows.<\/p>\n

And I think As a homeowner, if I didn’t already have solar, I would be thinking about going solar sooner rather than later to take advantage of existing net metering policies. I think that’s, that’s the other. Other sort of final piece of it. <\/p>\n

Yeah. Try to get grandfathered in whatever incentives are out there in your area before they change for new buyers.<\/p>\n

That happened to me on my old house. I got into the SREC, the last stage of the SREC market right before it changed the smart system. So it’s like I ended up getting more money. Uh, every, like the checks I got cut every month were higher because I had just squeaked in right before smart kicked in the gear.<\/p>\n

Now my new house, I am on smart. So it’s <\/p>\n

right. It can be a big deal. It can, it can be a really big difference. Um, so you might, you know, these policies exist. You might as well take it, take advantage of them while you can. Exactly. <\/p>\n

Awesome. Well, thank you so much for your time. I really appreciate you telling me about <\/p>\n

this.<\/p>\n

Yeah. Thanks for the, uh, thanks for the questions, Matt. So, Matt, do you have <\/p>\n

anything else you wanted to add here and now to this conversation? <\/p>\n

Uh, the big thing would be net metering rules are going to be changing over time. They’re changing right now. Some states are working on it. So, if you don’t, if you want to get solar, you’re interested in it, you might not want to wait.<\/p>\n

You might want to get it now because you Typically get grandfathered into whatever existing systems are in place. Um, and if you don’t know if you want solar or not, I recommend checking out my achieve energy security with solar guide that I created. I’ll put links to that in the, uh, doobly doo down below, um, so that you can go check that out as well.<\/p>\n

It helps you decide if it’s the right move for you or not, because in some cases getting solar, it’s not the right move for you. <\/p>\n

Don’t forget also everybody to visit EnergySage online. We’ll put the link below and thank you to Spencer once again for taking the time to have a conversation with Matt.<\/p>\n

Don’t forget everybody, liking, subscribing, and leaving a review wherever it was you found this podcast are all great and easy ways for you to support us. We appreciate that support. And if you’d like to more directly support us, you can go to stilltbd. fm or go to the join button on YouTube and both of those ways will allow you to throw coins at our heads.<\/p>\n

We appreciate the welts and then we get down to the hard business of having a conversation with our sibling. Thank you everybody for taking the time to listen or watch and we’ll talk to you next <\/p>\n

time. .<\/p><\/div>\n","protected":false},"excerpt":{"rendered":"

https:\/\/youtu.be\/DeTOmxIt87w Matt and Sean talk about how net metering affects solar adoption and if it\u2019s fair. Matt also talks with Spencer Fields from EnergySage about…<\/p>\n","protected":false},"author":1,"featured_media":56670,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"om_disable_all_campaigns":false,"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[5],"tags":[],"aioseo_notices":[],"jetpack_sharing_enabled":true,"jetpack_featured_media_url":"","fifu_video_url":"https:\/\/youtu.be\/DeTOmxIt87w","_links":{"self":[{"href":"https:\/\/stilltbd.fm\/wp-json\/wp\/v2\/posts\/56614"}],"collection":[{"href":"https:\/\/stilltbd.fm\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/stilltbd.fm\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/stilltbd.fm\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/stilltbd.fm\/wp-json\/wp\/v2\/comments?post=56614"}],"version-history":[{"count":1,"href":"https:\/\/stilltbd.fm\/wp-json\/wp\/v2\/posts\/56614\/revisions"}],"predecessor-version":[{"id":56615,"href":"https:\/\/stilltbd.fm\/wp-json\/wp\/v2\/posts\/56614\/revisions\/56615"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/stilltbd.fm\/wp-json\/wp\/v2\/media\/56670"}],"wp:attachment":[{"href":"https:\/\/stilltbd.fm\/wp-json\/wp\/v2\/media?parent=56614"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/stilltbd.fm\/wp-json\/wp\/v2\/categories?post=56614"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/stilltbd.fm\/wp-json\/wp\/v2\/tags?post=56614"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}