Evaluating the Impact of Reduced Compensation Structures on Residential Solar Net Metering
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This research paper explores how policy design and government incentives regarding residential solar net metering programs have changed over time. Residential solar is important in transitioning individual homes towards renewable energy sources and net metering was a program intended to incentivize households that produced excess solar energy for the grid. Existing research analyzes how net metering policies have evolved over time to offer less net compensation to households by decreasing electricity pricing or adding extra charges for participating in the program. This study analyzes how such decrease in compensation affects the number of residential solar customers in net metering programs. The study employs a two-part methodology: 1) a descriptive analysis of policy revisions by state and 2) a time series analysis comparing policy changes by year and the percentage of state population enrolled in the residential solar net metering program. Data is gathered from the U.S. Energy Information Administration (EIA) Form EIA-861, covering the period from 2011 to 2024. The results are represented in line graphs and time series, which illustrate the continuous increasing trend in the number of customers despite lowered compensation. Customers are not sensitive to changing compensation rates and continue to opt into the net metering program. This trend is valuable in continuing to design policy that can best support the clean energy transition and understanding clean energy program features most important to customers.