SEIA: Fitch warning of utility net metering ‘death spiral’ is ‘old news and bad analysis’

Facebook
Twitter
LinkedIn
Reddit
Email
Fitch's assertion that net metering poses a 'credit challenge' to IOUs was dubbed as 'bad analysis' by the SEIA's Sean Gallagher. Source: Flickr/mjmonty

The Solar Energy Industries Association (SEIA) has dismissed Fitch warnings that propose net metering could damage the creditworthiness of utilities as “old news and bad analysis”.

Earlier this week, Fitch Ratings, one of the US’ ‘Big Three’ credit rating agencies, warned of a “death spiral” directly related to net metering, since the mechanism was analysed as posing a credit challenge for investor owned utilities (IOUs).

This article requires Premium SubscriptionBasic (FREE) Subscription

Unlock unlimited access for 12 whole months of distinctive global analysis

Photovoltaics International is now included.

Not ready to commit yet?
  • Regular insight and analysis of the industry’s biggest developments
  • In-depth interviews with the industry’s leading figures
  • Unlimited digital access to the PV Tech Power journal catalogue
  • Unlimited digital access to the Photovoltaics International journal catalogue
  • Access to more than 1,000 technical papers
  • Discounts on Solar Media’s portfolio of events, in-person and virtual

Or continue reading this article for free

As solar PV deployment rapidly accelerates in the US, net metering (NEM) policies that credit surplus energy transmitted into the grid at retail rates were portrayed as needing alteration “to incorporate a larger fixed charge component.”

“Failure to address NEM rate design issues could lead to an unsustainable cycle of rising monthly bills for non-NEM customers, incentivising them to acquire residential [distributed generation] DG systems and leading to further rate increases and more departures,” Fitch reported.

The SEIA disagreed. “This is old news and bad analysis. State public utility commissions and other researchers have repeatedly found that the benefits of distributed solar equal or exceed the costs to electric ratepayers,” said Sean Gallagher, vice president of state affairs at SEIA. “Rather than using rates to slow down the solar revolution, utilities and regulators can help bring about a sustainable distributed energy future that aligns customer behaviour with system needs.”

State-wide reaction to net metering

Despite being met with mixed reception across the nation, net metering on the whole has been praised by the solar industry, despite conceding that rate structures may be in need of reform.

“NEM policies promote the deployment of customer-sited distributed solar generation in many markets. However, NEM and rate design, inherently linked, need to evolve to transparently allocate costs and benefits, compensating all parties for their value contribution,” said the Smart Electric Power Alliance (SEPA), in a statement. “This transition will only be effective when utilities, the solar industry and customers collaborate to create a sustainable solar distributed generation marketplace.”

Unfortunately, blaming retail net metering for jeopardising utility welfare is nothing new. Utilities have long been arguing that the scheme causes an imbalance as rooftop solar consumers are ‘subsidised’ to use the grid by the rest of the utility’s ratepayer base.

Last month, Arizona Public Service (APS), attempted to oust net metering and replace it with a mandatory demand charge and a lower volumetric charge; insinuating that net metering was outdated: “It’s time for our industry to adapt its pricing model to reflect new energy technologies and the changing way customers are using electricity,” said Don Brandt, CEO of APS, in a statement at the time.“There will be the usual naysayers who want to protect the status quo for their short-term financial gain, but Arizona has delayed too long already.”

Illinois’ ComEd attempted to implement a controversial ‘Next Generation Energy Plan’ which would have also introduced a demand charge. For their part, regulators in Hawaii and Nevada effectively eliminated net metering as it was known.

Those measures were purportedly to the benefit of the utilities, but have had the opposite effect on solar progress in those states. Hawaii recently downgraded its solar industry outlook to ‘stormy’; whilst Nevada has been plagued by backlash against the decision – with key solar developers boycotting the state and consumers engaging in frequent protests

7 October 2025
San Francisco Bay Area, USA
PV Tech has been running an annual PV CellTech Conference since 2016. PV CellTech USA, on 7-8 October 2025 is our third PV CellTech conference dedicated to the U.S. manufacturing sector. The events in 2023 and 2024 were a sell out success and 2025 will once again gather the key stakeholders from PV manufacturing, equipment/materials, policy-making and strategy, capital equipment investment and all interested downstream channels and third-party entities. The goal is simple: to map out PV manufacturing in the U.S. out to 2030 and beyond.
21 October 2025
New York, USA
Returning for its 12th edition, Solar and Storage Finance USA Summit remains the annual event where decision-makers at the forefront of solar and storage projects across the United States and capital converge. Featuring the most active solar and storage transactors, join us for a packed two-days of deal-making, learning and networking.
16 June 2026
Napa, USA
PV Tech has been running PV ModuleTech Conferences since 2017. PV ModuleTech USA, on 16-17 June 2026, will be our fifth PV ModulelTech conference dedicated to the U.S. utility scale solar sector. The event will gather the key stakeholders from solar developers, solar asset owners and investors, PV manufacturing, policy-making and and all interested downstream channels and third-party entities. The goal is simple: to map out the PV module supply channels to the U.S. out to 2027 and beyond.

Read Next

August 29, 2025
US-based climate insurance provider kWh Analytics has launched a new renewable energy insurance cover for extreme weather events.
August 29, 2025
US grid interconnection agreements grew by 33% in 2024, reaching 75GW, with three-quarters signed for solar PV and battery energy storage system (BESS) projects, according to a new report from energy market analyst Wood Mackenzie.
Premium
August 29, 2025
PV Tech Premium hears from Renewable Properties and Silicon Ranch about the new 'start of construction' rules for US solar projects.
Premium
August 28, 2025
US solar companies could potentially pay “tens of billions” of dollars in retroactive duties on products imported from Southeast Asia between June 2022 and June 2024, following a decision from the US Court of International Trade (CIT).
August 28, 2025
Boviet Solar has completed exterior construction work on its 3GW PV cell manufacturing facility in Greenville, Pitt County, North Carolina. 
August 27, 2025
The governor of New Jersey, Phil Murphy, has signed a new legislation that seeks to build 3GW of new community solar by 2029.

Subscribe to Newsletter

Upcoming Events

Solar Media Events
September 16, 2025
Athens, Greece
Solar Media Events
September 30, 2025
Seattle, USA
Solar Media Events
October 1, 2025
London, UK
Solar Media Events
October 2, 2025
London,UK
Solar Media Events
October 7, 2025
Manila, Philippines