In addition to the basic energy value, distributed solar provides many benefits to the grid and by extension to all ratepayers. The chart below shows the avoided costs that result from distributed solar generation. The specifics of each distributed solar generation situation will vary. Balanced studies that evaluate benefits and costs coupled with transparent methodologies are critical to establishing fair policies.[1]

Net Energy Metering (NEM) is a Critical Policy for Enabling Distributed Solar

Net Energy Metering (NEM) credits solar customers for electricity that their system puts on the electrical grid. Solar customers usually do not offset all of their usage and do not zero their utility bills. Moreover, a solar customer pays 100% retail rates for all energy they use from the utility. 43 states and Washington, DC have adopted net metering policies and they are a proven and reliable method to advance the development of solar energy and enable customer choice. In addition to NEM, third-party ownership contracts, such as leases and power purchase agreements are essential to ensure that more Americans have access to solar. With leases and power purchase agreements, customers can put little to no money down on a solar system while enjoying lower electricity bills and the freedom to generate their own power. However, less than half of all states permit third-party ownership for ratepayers, making it harder for low and middle-income ratepayers in those states to go solar.  

NEM Garners Support from Diverse Communities and Ratepayers

The NAACP includes NEM along with other clean energy practices among its key policy recommendations for achieving economic and environmental justice within the energy sector. The NAACP states, “It is more important now than ever before that our communities take a stand to move our country to an energy efficient and clean future.”[2] In a recent poll, 80% of Latino voters in California said that they believe, “state legislators should make it a high priority to increase the amount of rooftop solar energy in California.”[3]

Low and Middle Income Households are Increasingly Installing Distributed Solar

As the markets mature, costs decline, and businesses innovate financing models, middle and low income customers are increasingly part of the ‘early majority’ of distributed solar customers.

Data from top solar states (Arizona, California, Maryland, Massachusetts, New Jersey and New York) shows that distributed solar is predominately and increasingly being deployed in middle income neighborhoods.[4] Additionally, in part because of recent cost declines of solar PV, policies and business models are beginning to focus on low-income consumers.

The Solar Industry Is Becoming Increasingly Diverse

The U.S. solar industry continues to remain a bright spot on the nation’s employment landscape, providing opportunities for more than 174,000 workers at 6,100 companies in all 50 states and creating jobs at a rate twenty times faster than the overall economy. In 2014, the solar industry employed 10,509 African Americans and 28,409 Latinos, comprising 6.0% and 16.3% respectfully of the solar workforce.[5] A higher percentage of solar installers are African-American or Latino than in the construction, natural gas or oil extraction, or coal industries. NEM encourages the installation of solar leading to more rooftop solar installer jobs, which are local jobs that cannot be shipped overseas. Thus, NEM and other pro-solar policies create investment that goes directly back into ratepayers’ communities when they install solar.

For a list of the top pros and cons of solar energy, visit SEIA-partner SolarReviews.