Net metering and time-of-use pricing play a vital role in the widespread adoption of distributed renewable energy (DRE). However, existing mechanisms may be overly weighted toward renewable energy development and fail to accommodate the large-scale adoption of DRE. This paper examines how net metering and time-of-use pricing can adapt to the mass DRE adoption through a literature review. We first provide a conceptual modeling framework for making DRE investment decisions and then report the main findings from reviewing existing literature on the roles of the net metering and time-of-use pricing on DRE adoption. It is found that net metering may lead to overcompensation or an unfair cross-subsidy effect; multiple rule-based compensations, such as avoided costs, value of solar rate and levelized cost of energy, have emerged as alternative approaches for optimizing net metering design. The effects of time-of-use pricing indicate that setting the right timing in time-of-use pricing design can enhance both the economic performance and self-consumption value of the DRE technologies.
- On the role of net metering and time-of-use pricing in distributed renewable energy adoption: A review and policy insights
- Lu-Miao Li (Author) - Jiangsu University of Science and TechnologyBin Yuan (Author) - China University of Petroleum, East ChinaP. Zhou (Corresponding Author) - China University of Petroleum, East ChinaXun Zhou (Author) - University of Surrey, Surrey Business School
- Energy Science, 2630001
- World Scientific
- 06/02/2026
- The authors are grateful to the financial support provided by the National Natural Science Foundation of China (nos. 72243012 & 72403105) and the National Social Science Fund of China (no. 22&ZD106).
- 991114494902346
- China University of Petroleum (East China)
- Surrey Business School
- English
- Journal article
