The value of net metering credits is influenced by several factors:
- Time of Use (TOU) Pricing: In regions with TOU pricing, the value of credits can fluctuate based on the time of day. Credits earned during peak hours are generally more valuable than those earned during off-peak hours.
- Retail Rate vs. Alternative Rates: Credits may be valued at the full retail rate, which is the same price consumers pay for electricity from the grid. Some jurisdictions use alternative rates, such as avoided cost rates or value of solar (VOS) rates, which may offer a lower value for the excess energy.
- Utility Company Policies and Local Regulations: State and local laws significantly impact net metering credits. Different utility companies have varying policies on how credits are calculated and rolled over, often based on specific net metering tariffs or agreements.
- Credit Rollover Policies: Whether credits can roll over month-to-month or expire at the end of a certain period affects their overall value. Frequent rollover options often enhance the financial benefits of net metering.
- Eligible Charges for Credits: Credits may only apply to specific charges on the electricity bill, such as energy charges, and not to fixed charges like customer or minimum charges.
- Cross-Subsidization Concerns: Utilities may adjust credit values to mitigate concerns about cost shifts to non-net metering customers, which could reduce the economic benefits for those participating in net metering programs.
Original article by NenPower, If reposted, please credit the source: https://nenpower.com/blog/what-factors-influence-the-value-of-net-metering-credits/
