Net Metering.
Net metering allows customers who produce their own electricity with on-premises energy systems (customer-generators) to sell the electricity they are not using back to an electric utility and offset their future energy costs. A net metering on-premises energy system is defined as a fuel cell, a combined heat and power facility, or a renewable energy generation facility that:
An electric utility must measure the net electricity produced or consumed by a customer-generator during a billing period in accordance with normal metering practices. If the electricity supplied by the electric utility exceeds the electricity generated by the customer-generator and fed back to the electric utility during the billing period, the customer-generator must be billed for the net electricity supplied. If the electricity generated by the customer-generator exceeds the electricity supplied by the electric utility, the customer-generator:
On March 31 of each calendar year, any unused kilowatt-hour credit accumulated during the previous year is granted to the electric utility, without any compensation to the customer-generator.
An electric utility must offer to make net metering available to eligible customer-generators until the earlier of either June 30, 2029, or the cumulative generating capacity of net metering systems equals 4 percent of the utility's peak demand during 1996. After either of these criteria are reached, a utility may develop a standard rate or tariff schedule that deviates from conventional net metering, with new tariff schedules requiring the approval of the governing body or Utilities and Transportation Commission.
Net Metering.
A number of changes are made to the rules for utilities regarding net metering, including:
Consumer Protections for Solar Energy Customers.
Customer protections are adopted for solar energy customers through contracting requirements. Protections include, but are not limited to:
Prevailing Wages for Net Metering System Contractors.
A requirement is adopted stating that a contractor entering into a contract to perform work on a net metering system shall pay every worker employed in the work at least the prevailing rate of wage for their trade or occupation. There is an exception for apprentices registered in an apprenticeship program approved by the Washington State Apprenticeship and Training Council, who must be paid at least the applicable apprentice prevailing rate of wage.
Future of Net Metering Work Group.
The Utilities and Transportation Commission (UTC) and Department of Commerce (Commerce) are required to jointly convene a work group focused on the future of net metering in Washington, no later than May 1, 2024. The work group is to be comprised of representatives from a variety of specified public and private sector entities, including:
The work group is to report recommendations to the UTC and Commerce on what alternatives to net metering should be considered by the Legislature. Along with its recommendations, the work group is to provide an inventory of other states' deviation from retail net metering laws, and the impact it had on the solar industry, utilities and its customers, rural and tribal lands, and customer-generator payback periods. In making its recommendations, the work group must consider:
Additionally, Commerce must begin to conduct a study investigating the magnitude of any cost shifts among ratepayers associated with retail rate net metering in Washington by January 31, 2024. The study is to consider scenarios assuming a cumulative generation capacity of 6 percent, 8 percent, and 12 percent of 1996 peak power.
A report is to be delivered by the UTC and Commerce to the Legislature by December 1, 2026, summarizing:
As compared to the original bill, the substitute bill:
(In support) Solar is one of the many clean technologies at Washington's disposal to meet its climate goals, and net metering enables energy customers to become active participants as generators in Washington's clean energy future. Financial benefits are needed to get people to install solar and investing in these policies would be good for future generations. Net metering makes rooftop solar affordable for middle class families, and installing rooftop solar systems increases home values. The State Building Code has new requirements for solar that will take effect soon, and net metering is the simplest way to support solar investments by home and business owners. The solar industry asked for a work group in the 2019 net metering bill, but it was not included. This bill would set the groundwork for Washington's clean energy future with all stakeholders fairly involved in the development of a successor policy and takes advantage of the federal Inflation Reduction Act funding timeline through 2035. Ending retail net metering would put Washington further off from reaching its climate goals, and would create 65 different policies. Washington is nowhere near solar adoption rates necessary to see cost shift effects, and utilities have not provided any data thus far that shows evidence of a cost shift occurring. Some studies have shown that retail net metering provides grid benefits up to a 10 percent adoption rate, and Washington currently is not even yet at 1 percent solar adoption. The current system size cap of 100 kilowatts does not align with the state's clean energy and climate goals, as it is small, making it difficult to meet customer needs at an economy of scale. Washington has a history of ignoring tribal voices, and net metering is the first step towards an equitable and just transition to a clean energy future. Net metering is fundamentally an environmental issue, as climate change threatens Washington's natural resources, and the state needs to reduce its carbon footprint.
(Opposed) Solar is important and there is support for the creation of a work group to study the future of net metering, but there is also concern about this bill extending current net metering mechanisms which negatively impact non-net metering customers. Under current net metering, there is cost shifting to lower income customers without solar, advantaging some over others. Raising the maximum solar energy system size under net metering to two megawatts is also a concern, as utilities typically buy electricity from systems of this size at the wholesale energy rate which is lower than the retail rate under net metering. It is too early to push this expansion of retail net metering, as this bill amends the previous net metering bill passed only four years ago. The cost shift analysis included in the bill should be completed before current retail net metering mechanisms are extended.
(Other) The bill's provisions for solar consumer protections and the cost shift study are positive, but there is no urgency to raise the capacity limit for retail net metering. Waiting would have little to no impact, as only three utilities have passed the current 4 percent capacity limit. There is support for the consumer protection and cost shift study aspects of the bill, but there are concerns with the extension of retail net metering and expansion of maximum project system sizes. The bill as currently written would negatively impact low-income customers, particularly in hard-to-reach rural areas, due to cost shifting. The current rules outlining the end of retail net metering were already a compromise with the solar industry, and net billing is the new model being moved towards across the country.