The Net Metering dilemma should be apparent from the above charts based upon the fact that the load factor of the Net Zero home is zero. With a "net volume" of zero, any fixed costs of service (transmission, distribution, or generator capacity charges) cannot be recovered through volumetric rates — dividing by zero usage equals infinity. One alternative would be to recover these fixed costs using Demand Charges proportional to the "net peak" of the home. In the above example, the Demand Charges for a Net Zero home would at most only be about 12% lower compared to the non-solar home. This might incentivize battery storage, which would allow the solar home to store some of the surplus solar energy earlier in the day and use that in the evening to reduce Demand Charges.
When a power grid does not have much solar installed, a new solar home often provides more "energy value" to the grid than it consumes because solar production occurs during the day when wholesale power prices are the highest. However, over time, increasing levels of solar generation (both rooftop and utility-scale) reduces the system hourly net demand and suppresses energy prices. This has already occurred in California, where wholesale energy prices from 9 AM to 2 PM are frequently close to zero or even negative due to solar generation surpluses. As a result, it is an easy exercise to show that the value of the surplus energy produced by a Net Zero solar home in California is now less than the cost of energy the home consumes the rest of the year. The utility is then effectively acting as a battery that is paying more to charge than it receives when it generates. If the Net Zero home has no bill at the end of the year, then non-solar homes in California are subsidizing both the fixed costs attributable to the solar home and the negative net energy value of the solar home. This is not a sustainable situation with large amounts of rooftop solar additions expected to continue in California.
The California Public Utilities Commission has struggled to develop new utility rate designs deemed fair to both rooftop solar customers and non-solar customers, but eventually it must do so in the face of California's low-carbon energy policies. Otherwise, how will utilities pay to maintain the grid when every home has rooftop solar? Many other states are wrestling with these same issues. Rate design changes will directly influence the deployment levels of both customer-side solar and battery storage for years to come, with direct cost impacts for non-solar customers who rely on utilities for their electric service.