Net Metering, as setup in California, allows homeowners to bank excess production during peak sunlight period of the day. This is done on a kilowatt per kilowatt basis. Both the utility and the homeowner benefit, to a point, since the excess production is typically during the period of peak demand, or slightly after. Any excess production is compensated at the wholesale rate, probably 2 to 4 cents per kwh, but not sure about that. Obviously this was setup by legislators to encourage more solar, and to reduce the need for generated power. Whether this is sustainable for the utilities long-term is debatable, especially since the utilities must have a reserve production capability to offset cloudy days when solar production is significantly reduced. Same problem applies to wind power.
I have solar power with Net Metering, a system that I installed personally, not for any altruistic reason, but for simple economics. The utilities in CA have a tiered rate structure where they decide how much you will pay for each kilowatt depending on the tier, starting at about `13 cents/kwh rising to 32 cents/kwh if you’re a bad consumer and reach tier 5, as I do. I adamantly oppose this, admittedly for selfish reasons, because I work at home, and during the summer that would be impossible absent A/C, which I’ve upgraded to achieve greater efficiency. I also have computer servers that run 24/7. My electric bill always exceeded $500/mo during the summer. I just received my annual adjustment bill and paid about $10 since I slightly under produced what I estimated I needed for the year.
I calculated my solar production capacity to annually match consumption, or slightly over produce, using that objective to evaluate return on investment, although I missed the mark by a few kilowatts and was charged $10 for the year.
In my narrow minded way of thinking, each kilowatt should be priced the same, just like most other commodities, such as gasoline, at the same rate for all residential and commercial users.
Good or bad, now is not the time to change the rules, in AZ , CA or any other state, at least not for existing systems where owners made the investment based on existing rules.
This irked me as well when I lived in CA.
Many houses are not suitable for solar. They have to have significant roof facing south or west away from tree shade.
At the time I was investigating my own natural gas powered generator that I would switch on during weekday afternoons. This would reduce tier levels significantly.
I'm sure there are regulations against this but luckily was not faced with taking the risk.