IDEAS home Printed from
   My bibliography  Save this article

The impact of rate design and net metering on the bill savings from distributed PV for residential customers in California


  • Darghouth, Naïm R.
  • Barbose, Galen
  • Wiser, Ryan


Net metering has become a widespread mechanism in the U.S. for supporting customer adoption of distributed photovoltaics (PV), but has faced challenges as PV installations grow to a larger share of generation in a number of states. This paper examines the value of the bill savings that customers receive under net metering, and the associated role of retail rate design, based on a sample of approximately two hundred residential customers of California's two largest electric utilities. We find that the bill savings per kWh of PV electricity generated varies by more than a factor of four across the customers in the sample, which is largely attributable to the inclining block structure of the utilities' residential retail rates. We also compare the bill savings under net metering to that received under three potential alternative compensation mechanisms, based on California's Market Price Referent (MPR). We find that net metering provides significantly greater bill savings than a full MPR-based feed-in tariff, but only modestly greater savings than alternative mechanisms under which hourly or monthly net excess generation is compensated at the MPR rate.

Suggested Citation

  • Darghouth, Naïm R. & Barbose, Galen & Wiser, Ryan, 2011. "The impact of rate design and net metering on the bill savings from distributed PV for residential customers in California," Energy Policy, Elsevier, vol. 39(9), pages 5243-5253, September.
  • Handle: RePEc:eee:enepol:v:39:y:2011:i:9:p:5243-5253

    Download full text from publisher

    File URL:
    Download Restriction: Full text for ScienceDirect subscribers only

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    1. Mills, Andrew & Wiser, Ryan & Barbose, Galen & Golove, William, 2008. "The impact of retail rate structures on the economics of commercial photovoltaic systems in California," Energy Policy, Elsevier, vol. 36(9), pages 3266-3277, September.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Seel, Joachim & Barbose, Galen L. & Wiser, Ryan H., 2014. "An analysis of residential PV system price differences between the United States and Germany," Energy Policy, Elsevier, vol. 69(C), pages 216-226.
    2. Ren, Zhengen & Grozev, George & Higgins, Andrew, 2016. "Modelling impact of PV battery systems on energy consumption and bill savings of Australian houses under alternative tariff structures," Renewable Energy, Elsevier, vol. 89(C), pages 317-330.
    3. Darghouth, Naïm R. & Barbose, Galen & Wiser, Ryan H., 2014. "Customer-economics of residential photovoltaic systems (Part 1): The impact of high renewable energy penetrations on electricity bill savings with net metering," Energy Policy, Elsevier, vol. 67(C), pages 290-300.
    4. DeBenedictis, A. & Hoff, T.E. & Price, S. & Woo, C.K., 2010. "Statistically adjusted engineering (SAE) modeling of metered roof-top photovoltaic (PV) output: California evidence," Energy, Elsevier, vol. 35(10), pages 4178-4183.
    5. Nyholm, Emil & Odenberger, Mikael & Johnsson, Filip, 2017. "An economic assessment of distributed solar PV generation in Sweden from a consumer perspective – The impact of demand response," Renewable Energy, Elsevier, vol. 108(C), pages 169-178.
    6. Georgios C. Christoforidis & Ioannis P. Panapakidis & Theofilos A. Papadopoulos & Grigoris K. Papagiannis & Ioannis Koumparou & Maria Hadjipanayi & George E. Georghiou, 2016. "A Model for the Assessment of Different Net-Metering Policies," Energies, MDPI, Open Access Journal, vol. 9(4), pages 1-24, April.
    7. Darghouth, Naïm R. & Wiser, Ryan H. & Barbose, Galen & Mills, Andrew D., 2016. "Net metering and market feedback loops: Exploring the impact of retail rate design on distributed PV deployment," Applied Energy, Elsevier, vol. 162(C), pages 713-722.
    8. Chesser, Michael & Hanly, Jim & Cassells, Damien & Apergis, Nicholas, 2018. "The positive feedback cycle in the electricity market: Residential solar PV adoption, electricity demand and prices," Energy Policy, Elsevier, vol. 122(C), pages 36-44.
    9. Nikolaidis, Alexandros I. & Milidonis, Andreas & Charalambous, Charalambos A., 2015. "Impact of fuel-dependent electricity retail charges on the value of net-metered PV applications in vertically integrated systems," Energy Policy, Elsevier, vol. 79(C), pages 150-160.
    10. Gaiser, Kyle & Stroeve, Pieter, 2014. "The impact of scheduling appliances and rate structure on bill savings for net-zero energy communities: Application to West Village," Applied Energy, Elsevier, vol. 113(C), pages 1586-1595.
    11. Jägemann, Cosima & Hagspiel, Simeon & Lindenberger, Dietmar, 2013. "The Economic Inefficiency of Grid Parity: The Case of German Photovoltaics," EWI Working Papers 2013-19, Energiewirtschaftliches Institut an der Universitaet zu Koeln (EWI).
    12. Rutovitz, Jay & Oliva H., Sebastian & McIntosh, Lawrence & Langham, Ed & Teske, Sven & Atherton, Alison & Kelly, Scott, 2018. "Local network credits and local electricity trading: Results of virtual trials and the policy implications," Energy Policy, Elsevier, vol. 120(C), pages 324-334.
    13. Darghouth, Naïm R. & Wiser, Ryan H. & Barbose, Galen, 2016. "Customer economics of residential photovoltaic systems: Sensitivities to changes in wholesale market design and rate structures," Renewable and Sustainable Energy Reviews, Elsevier, vol. 54(C), pages 1459-1469.
    14. Oliva H., Sebastian, 2017. "Residential energy efficiency and distributed generation - Natural partners or competition?," Renewable and Sustainable Energy Reviews, Elsevier, vol. 76(C), pages 932-940.
    15. Dufo-López, Rodolfo & Bernal-Agustín, José L., 2015. "A comparative assessment of net metering and net billing policies. Study cases for Spain," Energy, Elsevier, vol. 84(C), pages 684-694.
    16. repec:gam:jeners:v:9:y:2016:i:4:p:262:d:67277 is not listed on IDEAS
    17. Chen, Zhisong & Su, Shong-Iee Ivan, 2014. "Photovoltaic supply chain coordination with strategic consumers in China," Renewable Energy, Elsevier, vol. 68(C), pages 236-244.
    18. A. Gürhan Kök & Kevin Shang & Şafak Yücel, 2018. "Impact of Electricity Pricing Policies on Renewable Energy Investments and Carbon Emissions," Management Science, INFORMS, vol. 64(1), pages 131-148, January.
    19. Chaianong, Aksornchan & Tongsopit, Sopitsuda & Bangviwat, Athikom & Menke, Christoph, 2019. "Bill saving analysis of rooftop PV customers and policy implications for Thailand," Renewable Energy, Elsevier, vol. 131(C), pages 422-434.
    20. Darghouth, Naïm R. & Barbose, Galen & Zuboy, Jarett & Gagnon, Pieter J. & Mills, Andrew D. & Bird, Lori, 2020. "Demand charge savings from solar PV and energy storage," Energy Policy, Elsevier, vol. 146(C).
    21. Rowlands, Ian H. & Kemery, Briana Paige & Beausoleil-Morrison, Ian, 2011. "Optimal solar-PV tilt angle and azimuth: An Ontario (Canada) case-study," Energy Policy, Elsevier, vol. 39(3), pages 1397-1409, March.


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:enepol:v:39:y:2011:i:9:p:5243-5253. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Haili He). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.