Net Energy Metering, Distributed Solar Valuation, and Rate Design

The US Department of Energy (DOE) produced a report on net energy metering (NEM) in response to a request from Congress. To gather information for the report, DOE conducted a Request for Information (RFI) and tasked ICF, Inc. to review 15 recent cost-benefit studies related to NEM. DOE’s report is a 10-page letter that summarizes the conclusions it drew from the responses to the RFI and from ICF’s report. ICF’s analysis for DOE, Review of Recent Cost-Benefit Studies Related to Net Metering and Distributed Solar, highlights the different value categories, approaches, and assumptions used in NEM cost-benefit analysis, value of solar studies, and broader DER valuation frameworks, emphasizing commonalities and differences between them, and how they are evolving over time. A short summary is available on ICF’s blog. The National Regulatory Research Institute released a Review of State Net Energy Metering and Successor Rate Designs, which summarizes state public utility commissions’ actions to find alternatives to the more commonly used net metering rate design. These alternative proposals include compensating for energy delivered to the grid at a price other than the retail service rate; increasing fixed charges and sometimes also minimum bills; time-varying rates; and adding demand-charges to bills for customers who did not have them previously.