Tag:

net-metering

Will California Protect Customers’ Right to Self-Generate?

Should you be able to reduce the amount of energy you buy from your utility by generating your own power? Or does a utility have the right to demand that you buy all your power from them, even if you have a solar system on your roof?

This question is at the heart of California’s new proceeding to determine the future of net metering in the state. In comments to the California Public Utilities Commission in October, California’s three big investor-owned utilities argue that net metering should be unavailable to new customers after the current 5% program cap is reached, and that customers should have to move to a ‘buy all-sell all’ feed-in tariff (FiT) instead. Customers who want to go solar after 2016, the utilities argue, should no longer be allowed under state law to reduce the utility-generated energy they buy by generating their own renewable energy onsite. Instead, they want their customers to have to buy all the electricity they use from the utility, and sell all their onsite renewable generation back to the utility at a pre-determined price.

What price, you ask? Well, the utilities are all over the map on that one.

PG&E proposes the FiT price should vary by technology and should be set at “the avoided cost of the energy minus any costs incurred accommodating the generation that are not paid by the participating customer” (this would equal approximately 4 cents/kWh, minus integration costs). PG&E proposes an adder could be included if needed to allow continued growth of rooftop solar, with that adder declining over time.
SDG&E proposes that the FiT price should vary by technology like PG&E, but argues the price should be set based on production cost, rather than on the value of the energy to the rest of the system. (SDG&E follows up by proposing yet another alternative for determining the price: that it be based on the competitively-set ReMAT price already being used for systems of 1-3 MW.)
So Cal Edison agrees with PG&E that “the FiT rate should be based on market price benchmarks in the wholesale energy markets, such as the CAISO’s default load aggregation point (DLAP) prices” but says the price should not vary by technology and doesn’t suggest an adder to go on top of the short-run energy-only price.

We see some significant problems here. Foremost among them is that throwing out net metering and replacing it with a ‘buy all-sell all’ arrangement would be at odds with Americans’ fundamental right to self-generation. Net metering allows customers to first meet their own electricity needs with the clean energy they generate, and then receive full retail credit on their utility bill for excess electricity they send back to the grid. In California, about two thirds of the power generated from net metered systems is currently used by customers onsite. A FiT is something else entirely – the utility credits customers for all of their solar power production at a set price. In this situation, solar customers are no longer self-generators empowered to use their solar energy to primarily reduce their own load. They instead become power producers that must send all of their power to the utility.

A FiT that accurately values the net benefits of rooftop solar generation— fully building in public health, environmental, economic and grid benefits– is a fine option for those who want to be in the business of delivering power to the utilities, but it should be the customer’s choice whether they move to a FiT or choose to primarily use their solar energy onsite as a way of reducing their electricity purchases from the utility. PURPA, a federal law approved by Congress back in 1978, affirms this common-sense customer right to self-determination. (See our earlier blog post if you’d like to read our principles for designing an expanded net metering program, highlighting the importance of the right to self-generate.)

Beyond the issue of customer rights, there are other practical concerns. Arriving at the right FiT price to compensate customer-sited renewables is a difficult and contentious proposition. As outlined above, the utilities’ proposals for how that price should be calculated vary greatly from each other—and none inspire much confidence in reaching proper valuation. In fact, in recent years several CPUC proceedings considered developing value-based renewable procurement programs (AB 1969 expansion, AB 920 implementation, SB 32 implementation), and in each of those proceedings, utilities fought comprehensive valuation of clean energy tooth and nail. And the Edison Electric Institute, the trade association representing all investor-owned utilities in the US, has repeatedly stated its opposition to crediting distributed renewables with any value beyond the short term price of polluting fossil-fuel generation: see Greentech Media articles here and here. Until the monopoly utilities are willing to properly value distributed generation, a policy that secures value for customers by offsetting retail purchases is a much more pragmatic approach.

Net metering is a simple and proven policy tool for supporting self-generation, and has been enormously successful in California. The real issue here is rate design, where solutions are available, as noted in a recent DOE Sunshot paper that proposes three-pronged approach of revenue decoupling, a minimum bill and time-of-use rates that are gradually phased in for all customers. Since the CPUC is set to approve changes to residential rate structures in 2015 that will kick in over the next several years, we simply can’t know yet how the benefits of net metering to all Californians will stack up against costs (though a proper accounting of both sides is very likely to show continued net benefits for everyone). Meanwhile, California remains far from achieving its long-term goals to protect the climate, and we need to expand solar access to more Californians who live in disadvantaged communities. We hope that in 2015, solar supporters all across the state will come together to urge the CPUC take a common sense approach: extend and expand net metering beyond 2016, enabling more Californians to help tackle our collective climate challenge, and to control their own energy future.

November 17, 2014 0 comment

Renewable Energy

DOE Paper: Keep Calm and Net Meter On

written by The Vote Solar Initiative

The problem is not too much solar. That might seem self-evident, but that is basically what utilities around the country are arguing — and trying to ‘fix.’ As energy users are increasingly turning to solar to generate their own emission-free power, utilities are responding by trying to get rid of net metering, and change rate structures to impose large fixed charges. The outcome? Less solar. We have long argued that the problem is

not too much solar, nor is it net metering, the policy that is helping customers in 43 states choose sunshine as their energy source. Rather, it’s a utility business model (and perhaps a regulatory paradigm) that needs updating. In this vein, The Department of Energy’s Sunshot Program released a useful new document: Rethinking Standby and Fixed Charges: Regulatory and Rate Design Pathways to Deeper Solar PV Cost Reductions The paper makes a lot of arguments that we’ve been making, with the benefit of having a DOE logo to remove the smell of patchouli oil. The CliffsNotes are as follows:

Utility arguments on cost shifts often contain a lot of horsemalarkey. Not only do utilities fail to appropriately credit the benefits of solar, but they cherry-pick arguments about cost-shifting to inappropriately discriminate against net-metered solar users. Common rate design practice is to look at a utility’s cost of serving its customers over one year and divide those costs into two categories: ‘fixed’ long-term investments in infrastructure and the like, and ‘variable’ costs that change according to how much electricity is produced and delivered. This short-term snapshot makes fixed costs appear unavoidable, and – the utilities argue – by reducing their utility bill payments, solar customers are by definition not covering as much of those fixed costs as their non-solar counterparts. But of course individual investment in local generation can reduce the need for both fixed and variable costs over a proper time frame. As the Arizona Residential Utility Customer’s Office noted: “Fixed costs are not fixed forever; every cost is variable given the proper time horizon.” It’s time to start treating distributed generation like it’s going to be around for awhile.
Fixed charges have a ‘disproportionately negative and unduly burdensome impact’ on customers who go solar. Instead, a three-pronged approach of 1) decoupling, 2) bare minimum bill that is only assessed if customers buy little to no utility energy, and 3) time-of-use (TOU) rates, phased in gradually to all customers — should keep everything copacetic (that is, both solve for utilities’ revenue requirements and allow solar customers to get appropriate value for their generation) for a long time to come, at least until customer-sided solar reaches ‘significant plurality’ (20-30%) of utility peak load.

It’s really worth a read.

October 30, 2014 0 comment

Renewable Energy

We Have “Value for Solar,” but Should We Use It?

written by John Farrell

Earlier this year, Minnesota became the first state to formalize dozens of studies by adopting a “value of solar” formula that would fundamentally change the relationship between solar energy producers and their utility. It’s designed to have the utility accurately compensate solar energy producers for the value of solar electricity to the utility, its customers, and society. And by separating solar production from consumption, it also ensures that all electric customers are paying for their share of the electric grid. So far, no Minnesota utility has adopted the voluntary formula.

But do we really want utilities to adopt value of solar? (share your thoughts in the comments)

The Case for Value Of Solar
In an extended post in May, I made a strong case for the economic rationale behind the value of solar (as compared to net metering). I also highlighted the political consequences of ignoring the increasing gap between the cost and value of solar, and between those figures and the retail electricity price. That issue was captured in this slide from my Future of Solar presentation:

The issues raised in that post and the above chart remain true because net metering is an accounting policy, not an engineering one. It allows customers to pay the net between their solar production and on-site electricity use, even though much of the energy off their solar panels will spill back onto the grid. So even though much of the electricity produced doesn’t actually offset on-site use (because, for example, people use electricity at 9pm when solar production is virtually nil), customers with solar arrays reduce their bill as though they do offset their energy use.

Utilities suggest this the above chart illustrates a big problem, but their solution – big fixed charges on electric bills – hardly encourages any socially desirable behavior. Rather it’s a great ploy to defend a business model of a monopoly utility that’s rapidly going out of date in an era of smart grids and distributed renewable energy.

What Change to Choose?
We have better options than cementing a utility’s grid monopoly, but all options aren’t equal.

Alternative 1 – Value of Solar
Value of solar is a compromise position. It says that compensation should follow the electrons, with producers paid for what they produce and consumers paying for what they use. When well designed, value of solar is an economist’s dream: transparently setting prices on the basis of all necessary costs and benefits.

But what if we believe that customers have a right to generate their own power and to offset their own energy consumption, and should not be compelled to sell their output to utilities? Or what if we believe (as discussed more below) that power supplied at the retail level should be compensated at the retail price? Or what if we feel like it’s the utility’s job to come up with a palatable alternative to net metering and not the advocates of a distributed renewable energy future?

Alternative 2 – Net Metering + Value of Solar
Another option would be to combine the best of both policies, using net metering to credit customers up to their monthly bill total (allowing them to zero out their bill), and paying them the value of solar price for excess generation instead of a generic avoided cost or the retail electricity price. This is a pretty small tweak, since many net metering customers don’t actually produce more than they use, but it would respond to the criticism that solar produced for the grid be paid a price commensurate with its grid value, not the delivered retail electricity price.

Alternative 3 – Actual On-Site Production + Value of Solar
Alternatively, we could require that solar energy produced on-site only reduces the electricity bill if it’s used on-site. Thus, if a customer wanted to “net meter” they would have to store noon-time energy in excess of their on-site use (e.g. in a battery) to use later in the day. Excess power sent to the grid would be compensated at the value of solar price.

This is a fundamental change that’s also economically inefficient. We have an electric grid with a multitude of energy sources, and often plenty of nearby demand that a rooftop solar array can serve. Why balkanize the grid with millions of solar + energy storage systems unnecessarily?

Alternative None – Net Metering
A solar producer whose energy spills onto the grid is replacing a utility’s retail delivered power to nearby load. And if that’s the case, then why shouldn’t that customer be paid the same price the utility is paid – the retail rate – for every single kilowatt-hour put onto the grid? Is it simply because it’s costing the utility market share that we “need” a net metering alternative?

The Issue of ‘Fair Share’
The crux of all these policy options is the notion of whether solar energy producers (who rely on the electric grid for energy at night or when it’s cloudy) are similarly supporting the maintenance of the electricity system as customers that don’t net meter. Given utility “solutions” that include taxes/fees on solar producers and fixed charges, it’s clear that they believe a fair share has to be a set-aside – if you don’t send the utility some money every month, it’s not “fair.”

But numerous studies show that solar energy producers provide something of value to the utility, often in excess of their compensation. Even if a solar producer pays zero for electricity bill, the utility has received something of value, just not cash.

Nor is there anything holy about using fixed charges to cover fixed costs. There’s no cover charge at Starbucks, but there are enormous fixed costs in keeping locations open, lit, and operational. What makes a utility system any different? (and if utilities have major rate design problems, why is it only the advent of widespread solar adoption that’s motivating a change?)

Net Metering: a Proxy in the Battle for a Democratic Energy Future
Utilities rightly see the end of an era, with technological change revolutionizing their business. Value of solar (if properly calculated) is a terrific, economically efficient policy for addressing customer and utility concerns about fair compensation.

On the other hand, it’s a drop in the sea change happening to the electricity business model.

There’s $364 billion in revenue from electricity sales in the U.S. every year, and much of that is up for grabs due to the opportunity from widespread, distributed renewable energy. Residential solar alone accounts for 9% of new power plant capacity in early 2014; the entire paradigm of the electricity system is shifting.

The question to ask is not whether value of solar or net metering are the best policy for compensating on-site solar energy producers issues, but which policy will lead to a better energy future. Which will unlock more of the potential for communities to capture their energy dollars and empower individuals and communities to be their own power company?

On the issue of economic purity, value of solar makes a lot of sense. But it also cements the notion that all people are utility customers, even if they are producing power to sell to the utility. Net metering may be imperfect, but in allowing people to offset their energy use with their production, it supports a philosophy of energy self-reliance. Today’s transformation of the electricity system could accommodate utility market power or upend it. And the policy we choose for solar compensation – value of solar or net metering or something else – will play a role in that outcome.

October 23, 2014 1 comment

Renewable Energy

Can PUCs Lead on Distributed Renewable Energy?

written by John Farrell

If you’re like most renewable energy advocates that have interacted with a Public Utilities Commission, you probably don’t think they’re a repository of progressive policy toward distributed renewable energy. In general, you’re right.

But it’s worth sharing a few, promising examples of Public Utilities Commissions around the U.S. that are actually making things better for distributed solar and other means of customer control over their energy future.

A good summary is, “your mileage may vary,” depending on your state and the changing composition of your commission. But it’s worth noting that most commissions are given pretty broad authority to initiate activity on behalf of energy consumers, and maybe all yours needs is a little proof of concept.

Arizona
The Arizona Corporation Commission had a few very busy years encouraging distributed renewable energy without legislative direction. Beginning in 2006, the elected Commission established the state’s renewable energy standard, with 30% of the program’s capacity reserved for distributed generation. In cooperation with the state’s regulated utilities, it also established the Arizona Goes Solar program to simplify the process of installing solar electric and hot water systems. Finally, in 2008, the Commission adopted very robust net metering rules that allow installation of customer-sited power generation of any size, as long as it does not exceed 125% of annual energy use, with compensation at the retail energy rate.

The Commission was recently in the news for slapping a monthly fee on solar net metering customers, but its track record is impressive.

California
A state known for its leadership on clean energy, it may be no surprise that the California Public Utilities Commission has helped moved distributed renewable energy ahead. Despite failures to initiate a major solar program at the legislature, the Commission moved ahead with the $3 billion California Solar Initiative program in 2006, that’s helped develop over 2 gigawatts of distributed solar energy in the state.

The Commission also moved ahead with the Renewable Auction Mechanism (building off of a legislative direction for a feed-in tariff). While the focus on an auction may not be as cost-effective as a pure-play feed-in tariff, the program has moved forward with procuring 1300 megawatts of distributed renewable energy projects sized from 3 to 20 megawatts.

The Commission has also adopted the first energy storage mandate in the U.S. While the legislature asked the Commission to consider it, the Commission moved ahead with it based on the accelerating deployment of distributed renewable energy.

Georgia
Though more in response to utility proposals than of its own volition, the Georgia Public Service Commission has nonetheless stood up for distributed solar in several ways recently. They tripled the Georgia Power proposal for purchasing distributed solar from its customers (and centralized solar) and recently rejected a proposed fee on solar customers.

New York
The Empire State’s Public Service Commission has taken leadership on energy policy in several ways. In the 1990s, they implemented a systems benefits charge, whose funds have supported distributed generation and energy efficiency for many years, including customer-owned solar and energy storage. The Commission was also responsible for the adoption of the state’s renewable energy standard in 2004. More recently, the Commission has entered the Utility 2.0 debate, with a discussion of fundamental reform of the state’s energy system.

August 13, 2014 1 comment

Renewable Energy

“Solar Tax” on the Table in Utah General Rate Case

written by The Vote Solar Initiative

I spent part of this week in Utah, where the major utility has proposed a discriminatory fee for net metered solar customers as part of its General Rate Case – or GRC.

GRCs are typically complicated matters. They evaluate a utility’s assets, expenses, and capitalization to develop the revenue required by the utility to achieve a rate of return on shareholder equity (i.e. profit) high enough to attract private capital to this very capital-intensive industry. This part of the case involves truckloads of witnesses, testimony and exhibits. And that’s just the first phase. Once the Commission figures out how much money it is willing to let the utility collect, the second phase divvies up the total pot of revenues across all the various classes of utility customers – residential, commercial, and industrial to name some major categories. More witnesses, more truckloads, and then a hearing rivaling the chariot race in Ben Hur. Not surprising since all of these attorneys and expert witnesses are fighting over tens – if not hundreds of millions of dollars – include Commission authorized profits for the utility. The granular economic, financial, legal, engineering and accounting considerations will often number in the hundreds.

That’s why when a utility files a change to net metering policy in the context of a rate case, we join with a keen appreciation for the complicated road ahead. In Utah, Rocky Mountain Power or “RMP” filed such a rate case late last year. We joined the fray with our friends and partners at Utah Clean Energy. True to form, the case followed the expected pattern until early this summer when all of the disparate parties got together and settled every last darn issue! Well, all except one. Can you guess which one that might have been?

Right. The net metering charge RMP seeks to impose upon those self-reliant customers who install solar on their homes. This “solar tax” – so-called by local groups – would amount to an 8% rate increase on net-metered customers.

If a utility in Utah or any other state brings sweeping changes to the treatment of net metering customers to the Commission for consideration, it also has the legal burden of proving that the issue is indeed critical, and that its proposed resolution is reasonable and in the public interest. In our view, RMP has proven none of these points.

The utility argues that revenue reduction from customers generating their own power is a cost of net metering. Therefore, the argument goes, such customers should pay an additional charge to make up the difference. And this should apply to all existing and new residential solar customers, and start really soon – like September 1. Meanwhile the utility has yet to undertake a comprehensive cost-benefit analysis to make their case with . . . facts. The utility’s 2,000 net metering customers account for just 0.25% of its residential customer base. This issue is clearly not so acute that there isn’t time to do the proper analysis. There is time for a fact-based conversation rather than rash action that would seriously impact solar customers in the state.

Opponents of the fee – Vote Solar included – argue that charging solar customers a fee is discriminatory and does not properly account for the very real grid benefits of rooftop solar. Private investment in local solar reduces the need for utilities to invest in (and rate base) expensive and polluting fossil fuel power plants and electricity grid infrastructure. Furthermore it is clearly in the public interest to empower more energy consumers to choose clean energy and bring economic, public health and environmental benefits to their community.

Fortunately, we have the Commissioners who strive to understand very complex GRC issues from varying perspectives and ultimately pass judgment on the utility’s solar fee proposal. The diverse set of voices speaking out against this solar fee – including 150 individuals who attended a rally at the Commission yesterday – clearly shows that Utahns care deeply about their ability to go solar. We hope that the Commission will stand strong for solar choice rather than letting the utility’s business interests outweigh the customers they serve. Stay tuned.

July 31, 2014 1 comment

Renewable Energy

PUCN Study: Rooftop Solar is a Cost-Saver for NV Energy

written by The Vote Solar Initiative

We are applauding the results of a study from the Public Utilities Commission of Nevada (PUCN), which found that rooftop solar and other small clean energy systems installed through 2016 will deliver $36 million in net benefits to Nevada ratepayers. The study was released as regulators consider additional customer fees and other policy changes that would have lasting negative impacts on private solar investment in the state. Given the clear benefits of more rooftop solar to Nevada, we urge regulators to reject such fees and ensure that Nevada’s solar customers continue to receive fair, full credit for the valuable clean energy they deliver to the grid.

“Rooftop solar is putting Nevada energy customers in charge of their electricity supply and utility bills like never before. Today’s report confirms that such investment in solar delivers real benefits amounting to millions of dollars for Nevada energy consumers, and that the state’s existing net metering program is a fair and simple way to account for those benefits,” said our western regional director Susannah Churchill. “We urge the state’s policymakers to recognize these benefits by keeping the way clear for Nevadans to choose solar power.”

The study, commissioned by the PUCN and undertaken by consulting firm Energy and Environmental Economics (E3), assessed the costs and benefits of one of the state’s most important rooftop solar programs, net metering. Like rollover minutes on a cell phone bill, net metering gives solar customers full credit on their utility bills for the excess clean power they contribute to the grid. In place in 43 states, this simple crediting arrangement is one of the most important state policies for enabling Americans to generate their own power from solar and other renewable energy resources. The PUCN study confirms that net metering delivers grid benefits to solar and non-solar customers alike in NV Energy territory.

“Any Nevadan knows that our state has a tremendous solar resource. I’m proud to know that my solar investment is lowering my own bills as well as those of my neighbors by producing clean, reliable local electricity. It just makes sense to put that free sunshine to work with good state policy that clears the way for more Nevadans to go solar,” said retired Colonel Michael Horsley, a Las Vegas resident who went solar in 2013.

“Sunshine saves my business thousands of dollars annually that I can reinvest in my company. It’s helped us take control of our energy bills and choose clean energy, and that’s further benefitting the community we serve,” said Jared Fisher, owner of Las Vegas Cyclery, which has been solar powered since 2012.

The study found that the benefits of Nevada’s net metered solar energy systems include: savings on expensive and polluting conventional power; reduced investments in transmission infrastructure; reduced electricity lost during transportation over power lines, as surplus net metered solar energy flows to the grid and is consumed locally; and savings on the cost of meeting carbon reduction and renewable energy goals.

In addition to grid benefits, distributed solar is delivering economic, environmental and public health benefits to solar and non-solar customers alike in Nevada. Local solar power helps keep energy dollars invested in the state, an important economic engine as the state currently relies on imports for 90 percent of its energy resources. The state’s rooftop solar market has driven $200 million in private investment and helped support 2,400 solar jobs, with significant opportunity for continued economic growth if the state maintains strong policy and regulation.

Private investment in local solar also reduces pollution, building healthier communities, environment and climate. This pollution reduction is especially important for low-income families who disproportionately bear the public health burden of fossil power. Of particular benefit to Nevada, rooftop solar also helps reduce the state’s use of water-intensive traditional power sources, which require an estimated 55,000 gallons of water per year to supply power for the average Nevada household. Plus, it’s keeping the iconic “Welcome to Fabulous Las Vegas” sign lit with reliable, homegrown power. What could be more Nevada than that?

Check out our fact sheet for a 2 page overview of Nevada’s net metering benefits.

July 14, 2014 0 comment

Renewable Energy

A Bright Future for Solar in the Bay State

written by The Vote Solar Initiative

Long a national leader on clean energy policy, Massachusetts is close to raising the bar when it comes to solar, with a legislative package that would dramatically expand access to solar energy in the state. A comprehensive solar energy bill (H.4185) was introduced last week into the Massachusetts House of Representatives. If passed, the bill will encourage more Bay Staters to go solar by removing the state’s caps on net metering, and by redesigning an incentive program to bring online 1,600 megawatts (“MW”) of solar energy by 2020.

If you live in Massachusetts take action today to urge your state lawmakers to vote YES on H.4185.

The legislation was negotiated by state agencies, renewable energy interests groups, and the electric utilities. As expected, the bill is a compromise for all parties. On balance, we believe it’s a compromise worth supporting. Here’s our breakdown of what this important legislation contains:

Uncapped net metering for schools, government entities and businesses: Massachusetts’ net metering program is one of the most important reasons for our solar success. Net metering is a simple straightforward policy that provides Bay Staters with full credit on their energy bills for any valuable clean electricity they deliver to the grid for use nearby. The problem is, customer participation in net metering is currently limited by an arbitrary cap. H. 4185 would uncap net metering, and this is fantastic news for our state’s energy customers. The program is fair, it’s working and it needs to be expanded so more Bay Staters can go solar. Net metering caps for schools and government entities have already been reached, and the cap for businesses and residents is also close to being hit. This legislation permanently alleviates this problem, and without such action, the Commonwealth’s solar market would have ground to a screeching halt in the near future. This provision paves the way for a long-term, sustainable solar market without administrative caps. This is a huge win for solar in Massachusetts.

Redesigned incentive program to bring the most solar bang for your buck: Governor Patrick has set an ambitious goal for bringing online 1,600 megawatts of solar by 2020. This bill would create a cost-effective and predictable incentive program to ensure that small and large-scale solar projects are developed in the state. The new incentive program will replace the current solar renewable energy certificate (“SREC”) incentive program. The SREC program will continue to exist for solar systems that are already installed, but starting in 2016, new solar customers would have access to the new incentive program. The new program will provide solar customers with a payment for 15 years for each kilowatt-hour of production from their system (the payment is for the environmental attributes associated with the electricity, not the electricity itself). While the payments for each individual customer would be fixed for 15 years, the compensation for future systems would step-down as more and more systems are installed, eventually reaching zero as the state transitions to an incentive-free market. The exact level of compensation for each “block” of systems will be determined by the Massachusetts Department of Energy Resources (“DOER”), and Vote Solar plans to participate in that public proceeding. This “declining-block” incentive has been successful in California, and has recently been adopted in New York. Below is graphical representation of a declining block program. This program should reduce financing costs for solar systems in MA, and thereby lower the overall costs associated with going solar.

Minimum bills: A significant compromise for the solar community as part of this legislation is the establishment of minimum bills. To be clear, minimum bills are not a new charge on a customer’s bill. Instead, minimum bills prevent a customer from having a $0 electricity bill. No matter what, a customer’s bill will not drop below a certain threshold. The threshold will be determined as part of a proceeding at the Massachusetts Department of Public Utilities. For example, if a customer has a $100 electricity bill, and a net metering credit on their account of $100, the minimum bill would prevent an electricity bill of $0. Let’s say that the minimum bill is $15. In this scenario the customer would still pay the electric utility $15, and the remainder of the customer’s credit would carry-over to the next month. The minimum bill would apply to all customers – not just solar customers – which means that there is no discrimination against solar customers. The minimum bill ensures that customers of a utility will always pay something while they are connected to the grid. This approach addresses a concern by utilities that customers could avoid paying any electricity bill. Vote Solar does not share this concern because the evidence suggests that the long-term benefits that solar provides make up for any revenue loss utilities experience when customers go solar. Nevertheless, we view minimum bills as a more reasonable approach than some rate design changes proposed in other states – from additional charges on solar customers in Arizona (flat out discriminatory) to a very high fixed charge for all customers in Wisconsin (which reduces the motivation of customers to conserve energy). In the context of these other very bad proposals, minimum bills can be viewed as an acceptable proposal for MA.
Restructuring of virtual net metering: In Massachusetts currently, virtual net metering allows a solar system in one location to offset a customer’s utility bill in a different location. As such, the benefits of solar energy are available to all customers, even if the customers can’t install a system where they live or work. While this concept is in some ways preserved in H.4185, the bill credit offered under the new structure, which is simply called “virtual metering,” will no longer be the same as the net metering credit available to systems that generate and use electricity at the same location. Under the proposed legislation, the compensation per kWh for virtual metering projects would be fixed for the first 15 years, at a level to be determined by DOER in a public proceeding. It would include compensation for the electricity produced (at the sum of the generation, transmission, and transition rates) and compensation for environmental attributes (via an additional payment to bring the total compensation to the fixed level set by DOER). After the initial 15 year term, the payment for environmental attributes will end and virtual metering projects will receive only the generation + transmission + transition rate compensation. Let us note here that we disagree that this represents an appropriate long term valuation of the energy produced by these solar systems. We will actively participate in the DOER proceeding to fight for an appropriate bill credit level for these offsite systems, and will continue to work to ensure that Massachusetts’ market rules appropriately consider solar’s benefits in the longer term. Our goal is to ensure that customers without the ability to put solar on their homes and businesses still have equal and fair opportunities to access the bill-saving benefits of clean and reliable solar energy.
Multiple solar energy systems on one parcel of land: The compromise on virtual metering credit is slightly mitigated by another provision in the bill which would allow for multiple net metering solar systems on the same parcel of land, so long as the aggregate size of the solar systems on the parcel don’t exceed predetermined limits. This is very different from the current rules, which mostly forbid more than one solar system on a parcel of land. This change would allow, for instance (a) condominium owners to separately install systems, (b) low-income housing to have dedicated systems for each unit, (c) strip malls to have multiple systems to serve multiple customers, (d) farms to have multiple installations for multiple buildings. While we would prefer to see more of an aggregate net metering approach, which would allow all the meters on a parcel to be offset by the production of a single solar system, this provision in H.4185 is a small step in the right direction.

Overall, this bill is a win for solar in Massachusetts, and an important demonstration of how one leading solar state has chosen to move past the heated solar vs. utilities debates happening across the country, and strike a compromise that will keep Massachusetts customers going solar in a big way. Go Bay State, go.

Article by Nathan Phelps.

June 20, 2014 1 comment

Renewable Energy

Forget Utility 2.0, Let’s Talk Energy Ownership 2.0

written by John Farrell

The transformation taking place in the electricity system is enormous, but twofold. But most commentators – including the former FERC chair – miss half the opportunity when they fixate on the inevitable technological rather than the more fundamental economic transformation.

The 20th century electric grid was characterized by two centralized components. The technology of power generation was centralized in large, fossil fuel and nuclear power plants, with transmission lines delivering this power to large cities. The economic ownership of the grid was also centralized within state-sanctioned monopoly utilities. Any third party ownership of power systems was tightly controlled through utility requests for proposals (RFPs) and bilateral power purchase negotiations.

A revolution in the electricity system is inevitable and in progress. Low-cost wind and solar power are leading a dramatic shift toward renewable energy, much of it built close to where power is consumed. This is what many people call “Utility 2.0″ (and I’ll explain shortly why that’s an apt name). But while the technology of the 21st century grid is already different, it remains to be see if we write the rules to seize the potential ownership opportunity.

Consider the situation with distributed solar power. It’s becoming so economical that utilities in California are buying solar energy in bulk from 100 megawatt (MW) or larger solar arrays at a lower cost than new natural gas generation, and made of the same 200-some Watt panels that grace residential rooftops. Even when buying lots of solar, as Xcel Energy is doing in Minnesota, the 100 MW worth of solar will be installed in 1-2 MW chunks at electrical substations across its service territory. The technological shift in power generation is inevitable. Utility 2.0 is coming.

The future of ownership is less certain.

Under net metering rules commonly adopted in over 40 states, the technological revolution leading toward local solar energy production is also shifting the economics of the grid. Solar-producing customers are curtailing their export of energy dollars to dirty, remote power plants in favor of clean, local energy. A decentralized method of power production is leading to decentralization of ownership, a democratization of power production and ownership. This dynamic promises more dollars to local economies just as it has lent more political support for continued expansion of renewable energy.

This is Energy Ownership 2.0, energy democracy.

Decentralized power generation technology is a prerequisite for energy democracy, but it’s not a guarantee.

Former FERC Chair Wellinghoff’s proposal to let utilities build and own behind-the-meter solar installations is a Utility 2.0 concept that falls short of energy democracy. In fact it may be as much an assault on the democratization of energy as the many utility-led fights against net metering. Although the full details aren’t available in the article, what’s clear is that he envisions utilities building distributed solar facilities, even on their own customers’ rooftops, and putting the cost (with a rate of return) into their rate base. He’s right that this would let utilities’ leverage their economies of scale and low-cost capital and that this is fundamentally different than getting their only rate of return from centralized infrastructure like utility-scale power plants and transmission lines.

It’s also the danger of focusing on “Utility 2.0″ rather than “Energy Ownership 2.0.”

In this Utility 2.0 model, utilities maintain their economic hegemony, and customers lose the opportunity to capture the economic value of their rooftop. Utility 2.0 explains how utilities will accommodate the technological transformation in the electricity system, but it assumes that they can and should remain the masters of the money.

The problem is that utilities that remain economic masters of the energy system will continue to have a conflict of interest between new, renewable, customer-sited power generation and their existing, dirty power plant assets. They will continue to fight EPA regulations and net metering and anything that undermines their ability to make money on power plants and power lines they already built.

If we stop at Utility 2.0, we allow utilities to use their customers’ money – lobbying the Public Utilities Commission, the legislature, etc – to defend dirty and outdated infrastructure instead of spending it on the tools – smart grids, energy efficiency, demand management – to reduce energy bills and carbon emissions, and that also encourage economic ownership by their customers. It will gut the opportunity for rural revitalization with renewable energy. It will slow progress in fighting climate change. It will be a halfway measure.

There’s a twofold transformation taking place in our electricity system. Let’s not settle for halfway measures.

Article by John Farrell, appearing courtesy Institute for Local Self-Reliance.

June 18, 2014 1 comment

Renewable Energy

San Antonio’s CPS Energy 2nd Power Grab

written by The Vote Solar Initiative

As we reported last April 2013 San Antonio’s municipal utility, CPS Energy, attempted an unjustified rollback of its net metering program. Public outcry was such that the utility quickly decided to shelve their proposal, and instead “study” the impacts of distributed solar over the next several months. But now they are at it again, proposing a harmful new fixed fee for solar customers that is not cost-justified and would be the highest of their kind in the nation.

Click here to view the letter Vote Solar sent to the Mayor of San Antonio. Please consider sending your own letter to Mayor Castro at mayorjuliancastro@sanantonio.gov.

Back in April 2013, local groups, such as Solar San Antonio and national groups like Vote Solar took the utility to task for presenting an analysis of the ‘net impact’ of net metering that included almost zero of the benefits that this foundational solar policy generates. Using their flawed internal analysis, CPS’s April 2013 proposal called for a wholesale replacement of net metering with a buy-all, sell-all crediting program that would have offered solar customers roughly $0.056 cents per kilowatt-hour (kWh) for their solar production. Not only does that arrangement amount to 44 percent less than the credit customers receive under net metering, it also takes away the customer’s choice to meet their own electricity needs with self-generation – something we consider a fundamental solar right.

After the buy-all, sell-all proposal was put on the back burner, local groups stepped up to fill the analysis gap. Clean Power Research was hired to do a Value of Solar study (VoS Study). The VoS study was funded by the Department of Energy through the City of San Antonio and supervised by Solar San Antonio. The study showed that distributed solar in San Antonio offers a total levelized value ranges from $15.1 cents per kWh to $15.8, demonstrating the distributed solar offers significantly higher benefits to ratepayers than CPS’s internal analysis showed.

Fast forward to today, and CPS Energy is again attempting to implement a harmful proposal that is again not cost-justified and not supported by sound analysis. CPS plans to file a proposal with the City Council later this month to levy a monthly “Facilities charge” and a “Commissioning fee” on all future distributed solar generation adopters. While the exact details are confidential, together these proposed fees would be the highest fixed fees for solar customers in the nation and would almost certainly devastate the growth of rooftop solar investment in San Antonio. In Arizona, where a similarly unjustified fee of $0.70 cents per kilowatt was implemented last year, adoption of solar has slowed considerably with applications to install solar falling by half from Q1 2014 compared to Q1 2013.

Vote Solar is urging San Antonio’s City Council and Mayor Castro, to oppose these unjustified fees and instead undertake a comprehensive cost and benefit analysis of distributed solar. CPR’s 2013 VoS Study is a great starting point. If the City Council believes that – rather than using the CPR findings – a new study should be undertaken, we are recommending that they direct CPS to use the Interstate Renewable Energy Council’s (“IREC”), A Regulator’s Guidebook: Calculating the Benefits and Costs of Distributed Solar Generation, as a roadmap.

Considering the many benefits of individual investment in solar power, CPS Energy should be supporting customer solar adoption – not penalizing them for it.

June 10, 2014 0 comment

Renewable Energy

The Future of Solar Economics and Policy

written by John Farrell

Solar power is at a unique place in history. It’s growing rapidly, its price is falling precipitously. Within the next 10 years, it will compete favorably with utilities for electricity sales, on price, and without subsidies.

Given its rapid ascent, it might seem silly to talk about change. But the continued expansion of distributed solar power may rely on modifying a bedrock of distributed solar policy.

The Past

The solar past is all about net metering (and generous federal, state and utility incentives), a policy allowing smaller scale arrays (usually 1 megawatt or smaller) to connect to the grid at low cost, and for that solar energy to be credited to the producer’s electric bill as though it were a comparable amount of energy conservation. If a solar array produces 100 kilowatt-hours (kWh) in a month and the customer uses 300 kWh, then the customer’s bill is for the “net,” 200 kWh.

Why Net Metering is Awesome

Typically reduces or eliminates extraneous fees on producing local energy

Standardized tariff – same deal for everyone
Easy to understand compensation
Tax free energy production, because it is “paid” as an energy credit, not cash
Customer doesn’t need a battery because net metering is an accounting policy, not an electrical engineering one

Why Net Metering Isn’t Everything

You can’t produce more than you consume. If you’re a commercial warehouse with roof space for 2 megawatts of solar but very little on-site demand, it’s not economical to fill the roof with solar panels.
Compensation was historically much less than the actual value of solar to the utility, its customers, and society.
The customer may have a perverse incentive to increase electricity consumption because compensation is much less for energy produced in excess of consumption.

The following chart explains how net metering laid the financial foundation for solar PV projects, but that incentives had to make up the difference. It also illustrates how, based on the preliminary estimates of the value of solar from Minnesota‘s new policy, utility compensation for solar energy produced under net metering was likely far less than the actual value of that energy (unless the utility also offered rebates or incentives).

The Present

By the end of 2013, the U.S. had installed 13,000 megawatts (MW) of solar PV systems, and net metering contributed to a huge portion. The cost of installing solar had fallen 60% in five years and, in certain parts of the country, the cost of a solar array averaged over 25 years of energy production (called the “levelized cost”) had dropped below the price many customers paid to the utility per kWh. The following chart illustrates, with the levelized cost data for Missouri (about average for the U.S., but much above the cost in sunny areas like California or Colorado).

The growth in solar power and falling prices have led to a new dynamic in solar economics. For the first time in many places, solar electricity from the rooftop is cheaper than utility-provided power – without subsidies! And in particularly sunny places, the levelized cost of solar may even be below the “value of solar,” meaning that solar energy producers (if paid this value) could make a return on investment just on these merits. This “present” phenomenon will take place in different regions of the country at different times, but will happen everywhere within 5-7 years.

What’s important to note is that there’s a convergence: the retail electricity price, the value of solar, and the levelized cost of energy from solar panels are all relatively close.

It also means that by historical accident, net metering rates now and in the near future are very close to what solar energy is worth to the grid. And, it may mean that no incentives (local, state or federal) are needed to finance a solar project.

The Future

With a repeated nod toward the success of net metering and other incentives at building a growing solar market (at least in some regions of the U.S.), the future portends significant political problems if the policy prescription remains unchanged. The three key economic drivers of solar (the net metering rate, the value of solar, and the cost of solar) that have recently converged will begin to diverge rapidly. The following graphic illustrates the phenomenon that first strikes states with high electricity prices and abundant sunshine (already), but eventually spreads everywhere (in the next 10-15 years):

What does this divergence mean? Net metering will become increasingly lucrative for solar energy producers. For example, if Germany used net metering instead of a feed-in tariff policy, customers with solar arrays would be paid $0.30 per kWh for solar energy that cost less than $0.13 per kWh to produce, a 130% profit margin!

Big profit margins for solar producers is a novelty, but bad policy. First, it’s economically inefficient to pay so much more than is necessary to shift the grid to solar energy. Arguably, a 13% profit margin rather than 130% could move enormous numbers of utility customers to local solar energy. Second, when using net energy metering policy and paying a retail energy rate that is higher than the value of solar, it means that electricity customers as a whole are paying more for solar energy than its worth (assuming that the calculated value of solar is accurate). Finally, it’s inequitable. More than 75% of residents don’t own a suitable sunny rooftop for solar energy. If solar producers are getting over-sized profits, it comes out of the pockets of those who can’t afford to go solar.

But the economics are secondary to the political implosion that results from poor policy. Americans overwhelmingly love solar energy because it represents self-reliance, clean energy, and local power. It means monopoly utilities (which they dislike) lose and they win. It’s a political punch that unites the Sierra Club and Tea Party in Georgia. And it’s gone in a hurry if the evidence suggests that solar is perpetuating an economic system of winners and losers.

Already, utilities are fighting back against net metering and other distributed solar policies on the suggestion that the problems illustrated above are happening now (see the map of states where distributed renewable energy is under fire below). They aren’t. Utilities fighting now are fighting for a 20th century model of centralized control and comfortable monopoly profits. But in a decade they’ll have the truth on their side and not just innumerable lawyers and lobbyists.

So, what needs to be done differently?

Fixing the Future

No matter the changes, it’s important that the future distributed solar policy embrace the same principle as net metering: democratic access to the means of producing local energy with reasonable and equitable compensation.

Possibilities

The “value of solar” – change the form of compensation for on-site energy production from a per-kWh credit to a credit based on the true value of solar, as Minnesota has legalized. That state’s policy still uses the net metering framework (bill credits, matching production to onsite consumption) but changes the compensation from the retail energy rate to the transparent, calculated value of solar. Presuming the price is accurate, it can be enough to finance solar projects and hold non-participants harmless.

A Net Metering and Value of Solar Comparison

The following charts show how revenue from net metering and revenue from value of solar compare based on an actual 2.5 kilowatt (kW) solar array installed in Minneapolis. For a 2.5 kW solar array installed in 2014, the total revenue over 25 years is about $1500 more for net metering. For a solar array installed in 2020, the gap jumps to $5000. If the value of solar rate is an accurate representation of the actual value of solar to the grid, electric customers, and society, then the gap represents over-payment to solar energy producers.

Note: while the value of solar rate will change year to year for newly installed projects, it is locked in on a 25-year contract when a 1-MW or smaller project comes online. For more on Minnesota’s value of solar, read this report.

A feed-in tariff or CLEAN program – go a step further than Minnesota (and join Vermont, Hawaii, and various utilities like Consumers Energy in MI, Palo Alto in CA, and others) and use a policy that completely separates energy consumption from production. Set a price to pay for solar energy that grows the market or based on its value (both have been tried). Producers still buy all their energy from the utility, but they get paid for all their production (and likely pay taxes on it – after all, it’s income).
Something else entirely. Maybe 10 years from now battery storage is so cheap that everyone who has solar has one, and only excess power generation is sold to the grid at the value of solar. Or perhaps there’s community shared storage.

None of these ideas is the perfect fit for every state or every utility. And there are no doubt two other good policy concepts for each one I’ve listed here. But the future of solar energy will require a different approach than the past. And we’d best start thinking about what that future will be.

Article by John Farrell, appearing courtesy Institute for Local Self-Reliance.

June 4, 2014 1 comment

Renewable Energy

California Pairs Solar and Storage

written by The Vote Solar Initiative

We get very excited about the idea of a next-generation approach to power markets that takes full advantage of the suite of clean energy technologies available (what can we say, we’re electricity geeks). We want solar and renewables to work with storage, demand response, conservation and smart grid to repower our system with affordable, reliable, low-carbon electricity. Last Thursday, we took one step closer to that vision in California.

The California Public Utilities Commission issued a decision that will make it significantly easier for energy customers to pair their solar system with an energy storage device. In its Final Decision in the Net Energy Metering Paired Storage proceeding, the Commission decided to allow solar customers who add energy storage to continue to qualify for the standard net metering program, and exempting these customers from burdensome interconnection fees, standby charges and metering requirements. Responding to recommendations from Vote Solar and other parties, the Commission also required utilities to refund customers who were inappropriately charged these fees over the past year. Put this down as a win for California energy customers and a cleaner grid!

Under the newly adopted rules, customers with energy storage devices 10 kW or smaller will not be required to size the storage to meet either their maximum load or the maximum solar output. Furthermore, these customers, which includes a significant number of residential and some smaller commercial customers, are now exempt from having to install costly and unnecessary utility-grade meters and can instead rely on the estimated output. The Commission will issue a separate ruling to determine the precise method for making estimates, but customers with paired storage can still qualify to participate in the net metering program now.

Customers who install energy storage devices larger than 10 kW must limit their storage system size to no more than 150% of the maximum output of their solar system. These customers must also install more accurate meters, subject to a $600 cost cap for all but the most complex metering configurations. Anyone who installs larger storage devices with output greater than the 150% limit qualifies under the existing net metering Multiple Tariff schedules, which exposes them to additional costs and potential distribution system upgrades.

The decision is a significant milestone for both solar energy and energy storage. Prior to the decision, utilities have interpreted language from a recent update to the California Energy Commission (CEC) Renewables Portfolio Standard Eligibility Guidebook in a way that made it difficult and expensive for solar owners to add storage under the standard net metering tariff. The Commission’s decision clears away those unfair roadblocks and opens the door to a new era for clean energy supporters.

Storage paired with solar addresses many of the concerns utilities have about the intermittency of PV and allows solar customers to provide more value to the grid. For example, a solar customer can store clean energy produced during the daytime and discharge it to the grid in the evening when most people are coming home, turning on their air conditioners and driving up demand for energy. It’s a pretty simple concept, but a real game-changer for clean energy.

May 23, 2014 0 comment

Renewable Energy

California PUC Kicks off Big Debate on the Future of Net Metering

written by The Vote Solar Initiative

The future of rooftop solar in California was front and center this week at the California PUC’s first workshop on the design of the expanded net metering program. Following a strong recent decision keeping the rules stable for existing net metering customers for at least 20 years, the CPUC must next decide what the net metering rules will be for customers who install onsite renewable generation after the sunsetting of today’s net metering program, ie. after about July 2017. More than 60 people packed the hearing room for the workshop, including clean energy advocates, utility representatives, groups representing schools and other large customers that have gone solar, and ratepayer advocates.

First on the agenda, Commission staff asked for input on the ‘guiding principles’ to be used when designing the expanded net metering program (see below for our proposed guiding principles). Next, CPUC Energy Division staff discussed plans to develop a public spreadsheet tool by the end of this year that will help quantify the costs and benefits of various successor program structures. Since the Commission is also set to approve changes to residential rate design by spring 2015, assessing the costs and benefits of various program designs will be no small task, because the ratepayer impacts of net metering flow directly from the structure of underlying rates.

The reality is, no one – including the big utilities that argue so strenuously against the current net metering rules – has provided any real evidence that our current net metering program is anything other than a fair way to value rooftop solar and enable ordinary Californians to control their own energy future and help tackle our climate challenge. California is a solar leader due in large part to net metering’s success as a simple, predictable way to compensate solar customers for the valuable local power they feed back onto the grid — and we are all reaping the benefits of that success via cleaner air, local job growth and climate progress. No other method for compensating rooftop solar customers has achieved anywhere near that kind of real-world success in the U.S.

We think it’s smart that CPUC has kicked off public discussion on the future of net metering early, well in advance of its decision deadline of December 2015. But we also think the Commission must have strong evidence that something is broken before it makes big changes to a program that has made solar a classic California success story. Stay tuned as this critically important policy discussion continues to unfold. In the meantime, we leave you with . . .

Vote Solar’s Guiding Principles for an Expanded Net Metering Program in California:
1) Protect customers’ fundamental right to use as much or as little energy behind the meter as they choose, including reductions in their demand from the grid using renewable self-generation and other clean distributed resources. Only customer generation exported to the grid is relevant for the successor tariff.

2) Keep compensation structures simple, stable and predictable over the long-term so that solar customers, developers and investors can reasonably predict their return on investment.

3) Encourage customer adoption of storage and other customer-side innovations that improve grid functionality and balance supply with demand.

4) Minimize customers’ exposure to stranded assets. Utilities must plan for investments in the grid properly taking into account likely future growth in renewable behind-the-meter generation, storage, energy efficiency and other distributed resources. If a utility does not appropriately account for the benefits associated with distributed generation and other distributed resources, and the result is partially or fully stranded assets, then shareholders should bear the cost, not ratepayers.

5) Ensure that customer-sited renewable distributed generation continues to grow sustainably, as required by AB 327. Statutory language states that the market for distributed generation must be uncapped after July 1, 2017, and implies that the installation rate should be similar to or faster than what we see today. In order to achieve the state’s sustainability goal of 80% reductions in greenhouse gas emissions from 1990 levels by 2050, studies show substantial increases in customer-sited and other renewable generation are likely to be needed in excess of current goals, in addition to electrification of the majority of the transportation sector.

6) Ensure that the total benefits and costs of the tariff to all customers are approximately equal, as required by AB 327. Put another way, customer generators must receive fair compensation for the benefits of their exports. Updated analysis is needed to determine if benefits and costs will be approximately equal, assuming revised rates and including societal as well as grid benefits, under the current NEM tariff. If the updated study finds costs and benefits are approximately equal, no major policy change is warranted at this time.

7) Encourage growth in customer-sited renewable distributed generation among disadvantaged residential customers, as required by AB 327.

April 25, 2014 0 comment

Renewable Energy

Community Solar Gardens Sprouting in Minnesota

written by John Farrell

On April 7, the Minnesota Public Utilities Commission resoundingly rejected (click the link for an annotated ruling) a severely lacking community solar gardens proposal from Xcel Energy and required substantial improvements for the utility’s revised filing.

The regulatory smack-down means a promising community solar market for Minnesota (scroll down for the infographic version).

The Basics
Advocates worked hard to make it easy to establish community solar projects, and the following basic rules apply:

Minimum of 5 subscribers (who cannot own more than 40% of output, each)
Minimum 200 Watt subscription (typically one physical panel)
25-year standard contract
Total project size can be up to 1 megawatt (AC)

Compensation

The utility (Xcel Energy) must purchase all energy from the community solar project, whether or not it is fully subscribed
For subscribers – utility must pay them the full applicable retail energy rate (like individual net metering), including for net excess generation (energy in excess of their own on-site use)
For unsubscribed energy – utility must buy power from panels that are not owned by subscribers at the applicable retail rate for projects smaller than 40 kilowatts (kW), but only at the avoided cost rate for projects larger than 40 kW
REC – $0.03 per kWh for < 250 kW, $0.02 per kWh for > 250 kW. Not eligible if project also gets Made in Minnesota or Solar Rewards
Applicable retail rate reviewed and adjusted annually.
Bill credits, month-to-month carryover, purchase at end of year (at applicable retail rate)
If and when Xcel Energy files to offer a value of solar price, it will supersede the above rates and REC prices (at time of publication, Xcel has asked the PUC to reconsider the value of solar)

Fees
1-time fees:

A $1200 application fee, refundable if the project is withdrawn
A $100/kW deposit, refundable upon project completion or withdrawal (with interest)

Ongoing:

Administrative (called “participation”) – $300 per year
Metering fee – $66 per year, three phase: $96 per year

Process
Applications are not processed in order of application, but are prioritized as “first ready, first served” to help level the playing field between large and small developers (the latter taking more time to apply, perhaps):

The project meets the definition of completeness in Xcel’s solar-garden tariff;
The project has obtained or arranged appropriate insurance or has entered into an insurance-broker agreement;
There is evidence of site control and a point of interconnection;
There is evidence of projected subscription at the time of construction; and
The project proposal complies with all applicable material terms of the tariff and standard contract and with any additional considerations that Xcel, solar-garden developers, the Department, the OAG, and interested parties participating in the solar-garden working group have agreed to include in the plan.

Despite utility efforts to curtail solar gardens, the PUC emphatically said that there can be no limit on the total installed capacity of solar gardens.

Killed
The following items were thankfully removed from Xcel’s original proposal:

A second deposit
A 2.5 megawatt quarterly limit on solar garden installations
Lower compensation, based on “average retail energy rates”
Capacity limits in DC instead of AC (about 25% smaller)

Will They Grow?
The Public Utilities Commission was very deliberate in identifying rules that facilitate a fair balance between ease of establishing solar gardens and protections for solar gardens subscribers. The PUC also endeavored to provide adequate compensation for solar gardens, setting solar REC prices based on the projected cost of establishing solar gardens. Finally, the Commission removed capacity limits and lower proposed compensation that would have severely hindered development.

In other words, it’s a promising year for community solar in Minnesota, and combined with the victory of solar over natural gas and the solar energy standard, Minnesota’s solar market is heating up.

Article by John Farrell, appearing courtesy Institute for Local Self-Reliance.

April 22, 2014 1 comment

Renewable Energy

Ranking America’s Top Solar Cities

written by The Vote Solar Initiative

Yesterday, Environment Massachusetts released a new report called Shining Cities: At the Forefront of America’s Solar Energy Revolution, which ranks our nation’s top solar cities. The top 5 by total installed capacity are certainly known for their sunshine: Los Angeles, San Diego, Phoenix, San Jose and Honolulu. But there are plenty of non-traditional solar leaders that make the top 20: Indianapolis, New Orleans, Denver and our long-time target of New York all rank among our nation’s solar leaders.

The release specifically highlighted two bright spots from Massachusetts: Boston ranked 3rd among major cities in the northeast and New Bedford is a leader among smaller cities. The report was released at an event in front of the Joseph M. Tierney Learning Center at the Old Colony Housing Project in South Boston, surrounded by affordable housing units topped with solar panels.

“We are thrilled to be recognized as a national leader in solar power,” said Brian Swett, Chief of Environment, Energy and Open Space for the City of Boston. “Mayor Walsh wants to build on this success and continues to support new initiatives to encourage the widespread adoption of solar power and other renewable energy technologies in Boston.”

“New Bedford’s renewable power program is strengthening our City’s economy, our education system, and our environment, while saving taxpayers considerable money in the years ahead,” said Mayor Jon Mitchell of New Bedford. “Every city in America should be doing what we are doing here in New Bedford, and I could not be prouder of the creativity, commitment, and teamwork of all those here who helped us reach our goals.”

Why the focus on Mass? Local governments in the Bay State state are currently facing a particular challenge to continued solar growth – they’re running into a cap on one of their most important solar programs: net metering.

Net metering gives renewable energy customers full, fair credit on their utility bills for the excess clean power they deliver to the grid. This program means that schools are going solar to save on their power bills and direct precious limited resources to the classroom. It means that cities and counties are leading their communities on clean energy while keeping budgets in check. It means that Massachusetts is reducing the need for expensive and polluting power plants and grid infrastructure, which in turn means savings for all of the state’s energy customers.

But Massachusetts law places a cap on net metering participation, after which utilities are no longer required to offer this important customer right to new non-residential solar energy customers including the local government leaders Environment Massachusetts celebrated today. We’re working with a coalition of stakeholders including Environment Massachusetts, Boston Community Capital, SEIA and the MassEnergy Consumers Alliance to keep solar shining in the Commonwealth. We are urging the legislature to act quickly to pass S.2019 / H.3901, a bill that would raise the cap on net metering participation, and to reject legislation that would undercut the program. If you live in Massachusetts, you can add your support here.

And no matter where you call home, let your policymakers know that you support solar progress. Forward-thinking cities nationwide are benefiting from smart state and local policies that encourage solar investment and job growth.

April 11, 2014 0 comment

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