November 2023 Update: MG&E’s proposed changes to solar billing and metering were rejected by the Wisconsin Public Service Commission.

MG&E has proposed rate changes for homeowners who add solar to their homes, and these changes would make going solar less economically beneficial than the current rate structures.

As proposed, the rate changes would go into effect on September 1st, 2024 for MG&E customers. All homeowners that apply for solar interconnection after that date would be subject to the new rate changes. All homeowners who have applied for solar interconnection with MG&E before September 1st, 2024, an have their installation complete before December 31st, 2025, will be “grandfathered in” to the current rate structure for 20 years.

If your utility is MG&E and you if you are hoping to add solar to your home, start the process now.

Current Monthly Net Metering

With net metering, homeowners with solar receive credits for all electricity they push onto the grid and can then use those credits when they pull electricity from the grid. The grid essentially acts as a virtual battery for the homeowner, allowing them to push-and-pull electricity freely and only paying for the difference at the end of each monthly billing cycle.

Madison Gas and Electric currently meters solar customers on a monthly basis. That means that at the end of each monthly billing cycle, any excess energy production is credited to your account at the full retail rate in the form of dollars, to be rolled over to later months. This is wonderful for solar customers because excess energy produced during the summer months can be rolled over to the lower-producing winter months. You can find additional details about MG&E Net Metering on our website here.

Here are some of the proposed changes:

Loss of Monthly Net Metering: Instead of net metering on a monthly basis, both utilities propose metering throughout each day. MG&E proposes metering every 60 minutes, with the homeowner adding either charges or credit to their bill every hour. Homeowners would lose the ability to “bank” their energy over-production for later in the day, month, or year.
Lower Electricity Buyback Rates: With the new proposed rate changes and the loss of monthly net-metering, the hourly overproduction would be purchased back by MG&E at an estimated 4-7 cents per kWh (with a potential 5 cents per kWh additional “outflow adder”), significantly less than the current rate of about 15 cents per kWh. MG&E has also proposed rate increases for 2024 to 17 cents per kWh for MG&E, increasing the expected cost of electricity for all homeowners.

You can read the full transcript of the MG&E on the PSC website here.

What it will mean for homeowners:

A Solar Rush: If rate changes are approved, there may be a rush for homeowners to go solar before the rate changes occur so they could be grandfathered in to the current rate structure. Waiting to go solar close to a rate change could mean long waits or difficulty finding a solar installer with availability.
Longer Payback Periods: The decreased buyback rates and loss of monthly net metering would increase the amount of time it would take for a homeowner’s solar array to pay for itself.
Challenges to Forecast Savings: With the loss of monthly net metering, it will be more challenging to predict how long it will take any given household to receive a return on investment for their rooftop solar array.
A Move to Batteries: Batteries would become more economically advantageous for homeowners, since they would allow homeowners to bank the solar-energy created during the day for their evening and morning hours without having to push it back onto the grid at lower buyback rates. Adding batteries significantly adds to the up-front cost of going solar but would reduce the return-on-investment time for a new solar array.

Bottom line: There is a very good chance at least part of these proposals will go through, and while it will still make economic and environmental sense to go solar even if all the proposed changes go through, the payback period for going solar will be shorter for those who get in on the current rate structure.

We expect to hear if these proposed rate changes are approved or not by the Public Service Commission sometime around Thanksgiving 2023.