When you install solar at home, the electricity you send to the local utility grid is valued under net energy metering (NEM). The future value of NEM in Washington is still undetermined, but WASEIA is addressing it.
Context is key with technical terms. With NEM, homeowners can install solar panels sized to their annual electricity use and rely on the grid as a battery. It has been a cost-effective way to lower long-term home energy expenses. In “1:1” or “full retail rate” NEM, extra solar energy sent to the grid earns credits for later use when solar production is low. If the system matches yearly usage, the homeowner pays only a monthly utility fee—about $5-$30.
Utilities have considered 1:1 NEM to be a temporary solution because not all their operating expenses are paid with fixed monthly fees. Some of those are covered by kilowatt-hours sold.
A few utilities have already moved away from retail NEM, and because there are (64) separate electric utilities in Washington, it is in everyone’s best interest to have a standard method to calculate each utility’s NEM value. The Washington State Academy of Sciences (WSAS) is developing this NEM calculator as part of its Value of Distributed Solar and Storage (VOSS) study, thanks to a 2023 law passed due to WASEIA’s efforts.
On August 29th, 2025, WASEIA contracted M.Cubed to submit comments guiding the VOSS study. Next, WASEIA will contract with M.Cubed again in commenting on PacifiCorp’s proposed rate tariff, which could influence future NEM rates in Washington without considering insights from the VDSS study. WASEIA continues to advocate for completing the study and using its results to ensure transparent and fair NEM policies.
If 1:1 NEM ends, homes with solar panels may generate enough energy for their needs, but energy sent to the grid is valued less than energy bought back later. As a result, even producing all your annual electricity might not fully offset your utility bill. Utilities argue that reduced net metering compensations prevent revenue losses and rate hikes for other customers—a debate often called the “cost shift,” which requires a transparent discussion.
Removing 1:1 NEM means excess solar energy needs storage to avoid devaluation. Using a battery increases project costs, and its financial benefits may be offset by the expense. Whether through virtual or physical batteries, storage is necessary if you can’t use all your solar energy immediately when it’s produced. Shifting household energy use to times when solar panels produce power—like running appliances midday—reduces reliance on the grid. Smart controls can automate this, but manual changes may not suit families who are away during the day. Ideally, a combination of strategies works best. Utilities use Time-of-Use (TOU) billing to encourage off-peak usage, and homeowners benefit most by blending options like TOU and Net Energy Metering (NEM) to meet both utility and homeowner needs.
Solar is still being integrated into the grid, and NEM plays a key role in how much it can lower monthly bills. If NEM compensation drops, ratepayers must consider other ways to keep energy costs down long-term.
Here is the link to the comments made by M.Cubed on the VDSS study. WASEIA-Comments-on-WAS-Phase-1-VOSS-Report.pdf. While it takes a lot of technical understanding to digest the whole document, here are some excerpts:
“ We provide comments on three different aspects of this report, the first two of which appear not to be discussed in the report but were raised by WASEIA in its March 2025 stakeholder interviews. Unfortunately, the Interim Report appears to ignore many of the points raised in those interviews, which will reduce the credibility of the study substantially unless they are addressed directly.”
“Much of the asserted “cost shift” arises from the premise that utilities own and control 100% of the output from any customer-owned solar array and therefore has the right to charge the full retail rate for internal self generation, net of a credit based on “avoided costs.” This premise is always implicit and couched in terms of “obligations”, “fairness”, and “fixed costs.” Yet the utilities making these assertions cannot provide empirical evidence to back up these claims, instead making vague statements not consistent with actual decisions and operations. The Academy should closely examine this unstated premise and prepare its analysis consistent with the facts rather than uninformed opinion.”
“Unfortunately, the term “self generation” is nowhere to be found in the Interim Report. This appears to imply that this study has adopted this mistaken perspective about customers’ rights to control the use of their own property without interference.”
“The Academy should focus on clearly documented distinctions that can be empirically demonstrated. Opinions from stakeholders that cannot be supported with some form of evidence should not be included, much the same as with any peer-reviewed study. Where two viewpoints are at odds, the Academy should clearly highlight the distinctions and discuss fully the implications of each position. If no obvious resolution exists, the Academy should include the results from both perspectives in its analysis. The Academy does not have a mandate to arrive a single solution that discards viable and realistic alternatives.”
Here’s a concise summary:
- Washington passed a 1:1 NEM law in 1998 with a program threshold of 4%
- WASEIA got a Value of Distributed Solar and Storage study funded by the State of Washington that will help create the future of NEM – DATE?
- The Washington State Academy of Sciences is working on the VOSS study now
- By 2025 many utilities have exceeded the 4% NEM threshold, or will soon
- So far utilities have chosen to continue NEM policies when exceeding the threshold, albeit not all at the 1:1 rate
The future of NEM policy is undecided, and WASEIA is your partner in shaping the future of NEM and solar policy in Washington.
