With net billing, it makes sense to size the renewable system closer to the average use of the building. The overhead expenses of installing, reading, and billing for a separate meter are avoided. The renewable investment becomes much more cost-effective. Net metering can mean some revenue loss for the utility. Individual renewables systems are still expensive enough, however, that they are not likely to be used by many customers and are unlikely to have much overall effect on utility revenues.
Net billing can provide additional benefits to utilities, by encouraging distributed generation.
Concerns about revenue losses to utilities could be addressed by placing a cap on the number of eligible customers. In California, a limit of 0.1 percent of the peak electricity demand of each utility was deemed eligible for net metering. While this limit is small, it still allows for considerable expansion of the number of customer-owned renewable facilities. California, Maryland, Vermont, New Hampshire, Washington and New York adopted net metering during 1996-1998. Maine, Massachusetts, and Rhode Island reaffirmed their net-metering policies under restructuring regulations.