Energy Testimony

Favorable

Net-metering requires the utilities to bill customers who generate power on-site only for the difference between the electricity that is supplied to a building by a utility company and the electricity that is generated at the home or business and fed back to the grid.  Currently, customers can get credit from month to month, but at the end of each year the customer loses any accrued credits and the utility gets free power.  HB 701 would require the utility to pay the customer for this surplus power.

There are several benefits to modernizing Maryland's net-metering statute.  Firstly, the benefit to ratepayers is evident: requiring the utility company to pay the consumer back directly for any excess energy produced provides an incentive for homeowners or businesses to install solar systems, knowing they will be compensated for efficient energy use and independent energy production.  Because solar panels produce power at the times when electricity prices on the spot market are at their highest, the price per kilowatt paid to customers should be the same as the customer's cost would be of purchasing the power at that exact time.

A second benefit for ratepayers stems from the fact that photovoltaic solar systems generate the most electricity during the middle of the day, when demand and the cost of electricity are highest.  With net-metering, individual systems can offset expensive peak electricity purchases, resulting in lower electricity bills for all consumers.[1]

Thirdly, in addition to benefits for consumers, net-metering can be beneficial for utilities as well.  Having distributed generation during times of peak demand, like generation from solar panels on residential roofs, can "help utilities avoid the cost of additional power generation, increase the reliability and quality of electricity in the grid, and produce power at times…when utility generation costs are higher and they often need the extra power."[2]

Since a typical residential solar array does not generate more power than the home consumes over the course of a year, the use of this provision would be limited.  In those cases where an institution wishes to install a large solar array, however, our net-metering law would be an important factor in the decision to install the array.  Current law hinders that decision to go solar, missing out on opportunities to strengthen the grid and reduce our pollution.  This bill would turn a hindrance into an encouragement.

Finally, Maryland needs to focus on supplying power for people's homes and businesses with clean, renewable energy.  Currently, the state relies almost entirely on dirty fossil fuels and dangerous, costly nuclear power to meet its energy needs.  More incentives for clean energy use, such as net-metering, would ensure that the state has a reliable, affordable energy portfolio that puts us on the right track to meet our state's goal of cutting its greenhouse gas emissions 25% below 2006 levels by 2020.

[1] "Net-metering & Interconnection Standards: Pathways to Distributed Generation" SEIA.org. SEIA, Web. 25 September  2009. < http://www.seia.org/galleries/pdf/SEIA_NMIC_Factsheet.pdf>

[2] Ibid.