The great guessing game: How much net metering is left?


Weak reporting requirements for net metering in some U.S. states are needlessly creating murky market conditions for distributed solar PV and other renewables, a new study by EQ Research has concluded. On the other hand, in other states, strong reporting requirements have facilitated market transparency, benefiting consumers, installers and policymakers alike. The study, The Great Guessing Game: How Much Net Metering Capacity is Left?, describes net metering reporting requirements and practices in 13 U.S. states, and offers nine recommendations for improving such requirements and practices.

Net metering, a long-time foundational element of distributed solar economics, is available in 44 states and the District of Columbia. Opportunities and conditions in the distributed solar market largely depend on states’ policy frameworks, and state policy framework and market conditions can change quickly — as we recently have seen in Nevada, New Hampshire and New York. When a utility nears or reaches its aggregate net metering cap, the market for new distributed solar in that utility’s service territory can come to an abrupt halt. Therefore, understanding the future availability of net metering in a state is critical to project planning, investment, and decision-making for solar developers, customers and policy-makers.

Utilities typically must report certain net metering data periodically, but reporting requirements and practices vary widely among U.S. states. Reporting this data provides useful insight to policymakers, regulators, developers, consumers, investors, researchers, reporters and others. However, the usefulness of net metering reports depends on the types of data reported, how frequently the data is reported, and in what format the data is provided. The Great Guessing Game: How Much Net Metering Capacity is Left? examines and compares reporting requirements and practices in 13 states with different levels of market maturity:  California, Delaware, Illinois, Kansas, Louisiana, Maryland, Massachusetts, Minnesota, New Jersey, New York, North Carolina, Utah and Virginia.

The study identifies several common components of net metering reporting:

  • Megawatt Cap. Some reports specify the utility’s aggregate net metering program cap, in megawatts (MW).
  • Cap Notification. Utilities in some states must notify state regulators and/or customers when they reach a certain level of aggregate net metering capacity.
  • Number of Net-Metered Systems. Some reports include the total number of active net-metered systems in the utility’s service territory.
  • Installed Net-Metered Capacity. Some reports include the aggregate capacity of all active net-metered systems in the utility’s service territory.
  • Pending Net-Metered Capacity. Some reports include the aggregate capacity of all pending or proposed net-metered systems in the utility’s service territory.
  • Bonus Data. Includes net-metered system data differentiated by time and customer sector.

In addition, the frequency and format of net metering reporting can significantly impact the usefulness of the data they provide. These variables include:

  • Reporting Scope. Some reports are specific to an individual utility, while others cover all utilities or suppliers collectively in a state.
  • Reporting Frequency. Some states provide reporting in real time or near-real time; others require or provide annual reports.
  • Data Lag. A time lag typically exists between the end of the period covered by a report and when that report is made available.
  • Accessibility. Some states provide reports on dedicated web pages; others provide them in obscure dockets.
  • File Format. Some reports are available as spreadsheets; others are provided as cumbersome text files.

Based on the findings of this study, the authors proposed nine ideal data and reporting practices for states and utilities to consider. These proposed ideal practices are especially important in states with large or burgeoning distributed solar markets. The full study and its recommendations are available here. We’ve also published an interactive map which details state progress toward aggregate net metering caps.