United States: Energy Independence In The Age Of Renewables

Facing the traditional energy sector's uncertain future and the decreased cost of producing renewable energy, many companies have taken to generating their own power. Manufacturers may be in an ideal position to do the same through "net metering." Some companies, including giants such as Google and Apple, have been so successful generating their own power that they sell excess energy back to the grid. In considering such practices, manufacturers need to weigh the costs and benefits and monitor local legislative agendas.

An Opportunity for Independence

Renewable energy sources' viability constantly grows. For example, since 2009, the price of solar power in the U.S. has fallen over 70%. Coupled with this cost reduction, solar panel efficiency has drastically increased. But, solar power costs more than traditional energy sources. To incentivize investment in solar, the federal government provides a 30% investment tax credit that was recently extended through 2019.

Many manufacturers epitomize a candidate to generate electricity independently. First, manufacturers represent some of the largest consumers of domestic energy. Second, manufacturers often have expansive production facilities and warehouses with ample roof space to house a large number of solar panels.

In adopting renewable resources, manufacturers face a challenge in matching the demand for electricity with the supply from renewables sources. Solar panels and wind turbines are at the mercy of the weather and produce varying amounts of electricity throughout the day. This unpredictable generation rarely matches manufacturers' demand for electricity, at times producing less than needed, and other times producing more than needed. When production falls below demand, a utility company supplies the extra needed electricity. When solar production exceeds demand, manufacturers may capitalize on the excess electricity generation through net metering.

What about Net Metering?

"Net metering" programs mandate that power-generating companies (and individuals) may sell excess energy back to the utility provider for use in the electrical grid. Large "grid-scale" producers sell excess power back to the grid at wholesale prices, while residential generators have received retail rates. State and local government set those rates and the limits on the use of net metering. The California Public Utilities Commission ("CPUC") recently expanded net metering to projects generating more than 1 MW, a positive ruling for commercial users.

While net metering benefits solar owners, utility companies have raised concerns. Utility companies assert that net metering programs may raise costs for non-participating users. A recent MIT study also raised concerns about the sustainability of net metering at a retail price. As a result, legislatures have amended net metering programs.

In 2016, Massachusetts raised the cap on the amount of energy that could be sold back into the grid, but reduced the net metering rate by 40% on most large-scale projects. Similarly, Nevada in 2015 passed a bill that reduced the net metering rate, while increasing the fixed fee net metering customers paid. Interestingly, however, the Nevada legislature in June 2017 passed a measure partially reversing the effects of the 2015 bill. The 2017 measure provides that rooftop solar customers will initially be compensated for net metering at 95% of the retail rate, although the net metering rate will decrease over time each time as additional capacity of rooftop solar is installed in Nevada.

The utility companies' arguments generally apply only to residential participants because large grid scale solar projects exact wholesale rates for electricity. The designated rate is dependent on applicable regulation and the utility's own set rates. Depending on the state and the utility provider, the net metering may occur at the retail rate that customers pay for electricity, the wholesale rate that utilities pay for electricity, or anywhere in between.

Experts predict that a virtuous cycle has begun and will lead to an eventual phase out of fossil fuel production. The debate about net metering will continue in the coming years, and manufacturers have a strong interest. As changes affect the energy market, manufacturers must be aware of their regulatory environment and make informed decisions about their energy sourcing.

Effects of Battery Storage Solutions

As utility companies' resistance to net metering programs continues to grow, rooftop solar developers and their customers are increasingly turning to battery storage solutions as a way to help offset the anticipated future restrictions on such programs. With battery storage, a battery is installed together with the rooftop solar system, and the customer can store electricity generated by the solar system in the battery, at least partially eliminating the need to sell power back to the utility under a net metering program. Excess electricity generated during the daylight hours, when the solar system is producing electricity, can be stored in the battery and then used during the evening, when the solar system is not producing. In this way, battery storage solutions serve as a hedge against the possible future restriction or elimination of net metering programs, because rooftop solar customers can retain the benefit of excess power generated by the solar system, even if the customers are not able to sell such excess power back to the utility. Additionally, many rooftop solar systems do not generate enough power to fully offset the power that the customer uses on-site, so the customer ends up still buying a significant amount of electricity over the grid from the utility. With a battery storage system in place, the customer's need to purchase power from the utility can be substantially reduced.

Government, industry and customer interest in battery storage solutions has been increasing at a rapid rate as arguments against net metering by utility companies continue to persist. In May 2017, Maryland passed a law offering tax credits for energy storage systems, making it the first state to pass such a law in the United States. Bloomberg New Energy Finance predicts that the lithium-ion battery market for energy storage will be worth at least $239 million between now and 2040. Industry titans such as Lockheed Martin, Caterpillar and Mercedes-Benz have all recently made entries into the battery storage market. Industry observers predict that we will see battery storage solutions continue to play an increasing role in commercial and residential rooftop solar installations as the technology continues to improve and net metering programs face continued opposition.

Please note Foley Summer Associate, Jonathan Siragusa was a contributing author of this post. The Manufacturing Industry Advisor team thanks him for his contributions.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

*** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.