David Brown's paper entitled "Designing Compensation for Distributed Solar Generation: Is Net Metering Ever Optimal?" (joint with David Sappington) has won The Energy Journal's Campbell Watkins Best Paper Award for 2017.
In this paper, David Brown and David Sappington analyze the performance of net metering policies that are commonly used to compensate consumers for electricity generated from rooftop solar panels. Common net metering policies pay consumers with rooftop solar panels the prevailing retail rate of electricity for the electricity generated on-site. The authors demonstrate that common net metering policies are typically never optimal. Rather, the optimal compensation policy varies considerably as industry conditions change.
Net metering policies can both over and under compensate rooftop solar panels for their electricity output. Further, a net metering restriction can generate pronounced distributional effects across consumers with and without rooftop solar panels. In this paper, the authors advocate for a more robust compensation policy that ties compensation for electricity generated by rooftop solars closer to the value it provides to the electricity network. Access the Paper.
In this paper, David Brown and David Sappington analyze the performance of net metering policies that are commonly used to compensate consumers for electricity generated from rooftop solar panels. Common net metering policies pay consumers with rooftop solar panels the prevailing retail rate of electricity for the electricity generated on-site. The authors demonstrate that common net metering policies are typically never optimal. Rather, the optimal compensation policy varies considerably as industry conditions change.
Net metering policies can both over and under compensate rooftop solar panels for their electricity output. Further, a net metering restriction can generate pronounced distributional effects across consumers with and without rooftop solar panels. In this paper, the authors advocate for a more robust compensation policy that ties compensation for electricity generated by rooftop solars closer to the value it provides to the electricity network. Access the Paper.