As interim CEO, I want to share important information about Minnesota’s net metering policy. While this policy was crucial in its early days for promoting solar energy, it is now outdated, expensive, and unfair. Reforming net metering is essential for ensuring a sustainable, reliable, and equitable energy future for all cooperative members.
Net metering allows members with solar panels or other distributed energy systems to generate their own electricity and sell any excess power back to the grid. When the policy was established in 1984, solar technology was still in its infancy. Minnesota was a leader in encouraging renewable energy at that time. However, the energy landscape has changed dramatically, and the policy has not kept pace.
First, the policy is outdated. While solar technology has advanced, the current net metering laws do not reflect these changes. Today, we have new technologies, such as energy storage, that were not available in the past. Given that Minnesota is now on a path to carbon-free electricity by 2040, the environmental incentives that once made net metering valuable are no longer as critical. It’s time to update these laws to align with the present-day energy market.
Second, net metering is expensive. Under the current policy, cooperatives must pay retail rates for excess power, even though we can buy electricity at cheaper wholesale prices. This drives up costs for all members. Additionally, utility-scale solar projects provide a more efficient and cost-effective way to decarbonize our grid than smaller, distributed systems. Reforming net metering would help lower costs and improve the effectiveness of our clean energy transition.
Finally, net metering is inequitable. It shifts the financial burden to members who do not have distributed systems, many of whom may not be able to afford solar installations. This results in higher electric bills for those least able to absorb the additional costs. Reform is needed to create a fairer system for everyone, not just those with the means to invest in solar technology.
The current model is unsustainable and places unnecessary financial strain on most co-op members. Reforming net metering will help stabilize the grid, lower costs, and ensure that both traditional and renewable energy sources are integrated effectively.
Minnesota’s electric cooperatives are ready to lead the way in these reforms, advocating for policies that support all members while continuing our collective goal of a reliable, affordable, and sustainable energy future. We look forward to supporting these changes in the upcoming 2025 legislative session.