Dive Brief:
- A strategy document from Warren Buffett’s Berkshire Hathaway Energy concludes that net energy metering (NEM) should be replaced by a policy that provides for transmission and distribution system costs and maximizes the use of distributed energy resources (DER) during peak demand periods.
- The document from Berkshire Hathaway, which has invested $15 billion in central station renewables, stressed the need for a new policy to prevent the shift of grid infrastructure costs to non-DER-owning customers from DER-owning customers who pay lower pro-rated fixed charges when their on-site generation reduces their total bill amount.
- Berkshire Hathaway subsidiary regulated utilities NV Energy and PacifiCorp are lobbying for changes to the current NEM policy that pays DER owners retail rates for electricity sent to the grid, while solar advocates are pushing for a "value of solar" policy.
Dive Insight:
The Berkshire Hathaway strategy document affirms the value of DERs but argues for a new policy approach that includes a fixed charge and a demand charge.
Net energy metering is considered crucial to the value proposition of distributed energy resources. DER advocates say their value to the grid is greater than the cost they impose, a point confirmed in a recent NV Energy study.
Despite the contentious debates that have taken place in places like Arizona, utilities and advocates are finding ways to compromise on DERs. In Massachusetts, for example, utilities struck a compromise that includes solar incentives and a minimum bill charge.
The Alliance for Solar Choice, which has long argued NEM is the best solution to support DER, especially while solar constitutes less than 1% of U.S. electricity, accepted the minimum bill compromise because it uncapped NEM.
Warren Buffett recently said he may invest another $15 billion in renewables.
