Climate Change Policy: Adjusting Energy Markets

17 February 2021

(Originally posted on the Solar Tribune)

For the first century or so of the utility industry’s life, things were slow to change and the status quo helped to prop up the prosperity of the business. Each home would have a single utility option available to them in a regulated market, and the relationship between utility and customer was basic: the utility deliveries power and fixes the occasional outage, while the customer pays their bill once per month. In recent decades, though, policy and regulations have been pushing back that perhaps the status quo model of the energy market is not the most efficient on the basis of costs to the customer, growth of new technology, and the implementation of climate-focused signals. As such, certain policies targeting these long-standing energy markets have taken center stage.

Examples of some of these adjustments to energy markets that are in various stages of implementation already include the following:

Net Metering

What is it: Net metering, often a lightning rod for debate in the energy communities, is defined as a billing arrangement that compensates on-site producers of energy (such as customers with rooftop solar systems) for any excess generation that they do not use and instead export to the utility grid, though the level and format of the compensation vary by location.

Is it enacted anywhere: According to the National Conference of State Legislatures, at least 17 states have authorized the use of net metering.

Dr. Stephan Singer, Senior Advisor Global Energy Policies at Climate Action Network International:

There is no one size fits all solution. Approaches to policy and financing need to be tailor made depending on the regional, national, and local situation. And approaches need to be reliable and predictable for investors for planning security and a supportive infrastructure such as with net metering, storage and preferred grid access for renewables  – may that be the individual houseowner that puts solar on his roof or the utility scale investment by larger corporates.” 

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