Minimum Bill May be a Solution for Net Energy Metering Battles

BOSTON - July 24, 2014 - PRLog -- In a report released today, GTM Research finds that the introduction of a minimum electricity bill may be a replicable solution for other states undergoing net energy metering disputes. The Minimum Bill as a Net Metering Solution examines the impact of the minimum bill proposed in recent legislation in Massachusetts on the economics of the average home solar system and finds that, if the minimum bill is set to $10 per month, representative Massachusetts solar customers will see only a $12 increase in their annual electricity bill, equivalent to a 1 percent increase in their PV system’s overall cost of energy.

GTM Research concludes that the minimum bill is a promising policy option for resolving the net metering debate between electric utilities and the solar industry because it provides both parties with clarity on key issues impacting their businesses.  The minimum bill offers electric utilities the certainty that each of their customers will pay at least the minimum bill charge each month, which is critical for their planning needs.  And it promises the solar industry that net metering remains intact with only a minimal impact on the economics of the average solar system.

“The proposed minimum bill scheme in Massachusetts has the potential to shift the net metering policy debate in the United States by establishing a middle-ground position between solar homeowners and electric utilities,” said Shayle Kann, Senior Vice President at GTM Research. “We expect to see minimum bills seriously considered in a number of states this year.”

The report also compares a minimum bill to a fixed charge, which has been the policy option considered in many of the recent net energy metering battles – most notably in Arizona. In this regard, the minimum bill also shows promise; the impact of a minimum bill on a customer’s annual electricity bill has only one third of the impact of an equivalent fixed charge.

The Massachusetts minimum bill is part of a compromise brokered by the Massachusetts Department of Energy Resources among the Solar Energy Industries Association, the New England Clean Energy Council, National Grid, and Northeast Utilities. Other states, including California, are also considering the possibility of introducing a minimum bill to resolve the net energy metering debate.

GTM Research Associate Josh Cornfeld added, “We believe that a minimum bill may become more of a focal point in future net metering discussions around the country.  This report should help stakeholders on each side of the debate understand the policy’s impact if adopted.”

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About the report:

The report, The Minimum Bill as a Net Metering Solution, available to GTM Research solar clients (http://www.greentechmedia.com/research/report/solar-resea...), also includes a comprehensive overview of how the proposed Massachusetts minimum bill mechanism would work and analyses on the impact of the minimum bill on a typical Massachusetts solar customer’s electricity bill, the minimum bill’s effect on residential solar project economics, and the impact of different size minimum bill charges. If you have any questions or would like to gain access to the report, please contact sales@gtmresearch.com. (mailto:sales@gtmresearch.com)

About GTM Research:

GTM Research (http://www.greentechmedia.com/research/), a division of Greentech Media, provides critical and timely market analysis in the form of research reports, data services, advisory services and strategic consulting. GTM Research's analysis also underpins Greentech Media's webinars and live events. Our coverage spans the green energy industry including solar power, grid modernization, energy storage, energy efficiency and wind power sectors.