Net-metering policies, which allow solar owners to receive the full retail credit for any solar energy they produce, are undoubtedly what have helped spur the growth of solar power throughout the country. From an outsider’s point of view, the policy seems fair and square: ‘if I produce one kilowatt-hour (kWh) of solar energy, I should be credited for one kWh on my bill,’ is how the argument goes. For utilities, however, that argument starts to break down as adoption of solar grows. After all, if certain customers are purchasing less energy from the utility and getting credits for extra energy they produce then it falls on the rest of the ratepayers to pick up the slack. Solar customers are still using the grid at night and when the sun isn’t shining, shouldn’t they have to pay for the upkeep of the grid?
New England states are not the first states to grapple with this issue. It’s been played out across the country, indeed, across the world for at least the past few years. Earlier in 2015, the state of Hawaii abruptly halted its net-metering policy and Tempe, Ariz.-based utility Salt River Project instituted a price plan with a demand component for solar customers that has an average net impact of $50 per month, which is currently being challenged in court by solar leasing company Solar City.
Now the same battles have come across the country to New England. Here’s an update.
Massachusetts Legislature Fails to Compromise on Net Metering
The near-term fate of net metering in Massachusetts was sealed on Nov. 18 when the state’s legislature failed to come to an agreement on raising current program caps before the end of its 2015 session. Without an agreement in place, the solar industry must continue to wait to move forward with net-metered projects that are currently on hold in 171 Massachusetts communities, nonprofit MassSolar President Mark Sandeen said on Nov. 19.
The Massachusetts House of Representatives on Nov. 17 passed in a 150-3 vote a bill that would have effectively eliminated the state’s net-metering program by lowering the net-metering rate from an average of $0.18/kWh to $0.04/kWh. State Sen. Benjamin Downing immediately proposed an amendment to the House bill that would ensure the growth of community shared solar and virtual metering while also grandfathering in existing projects, according to a statement from the senator’s office.
The legislature convened a conference committee that met late into the evening on Nov. 18, but no compromise bill was reached.
Sandeen said that, with the legislature’s 2015 session officially closed, a new program proposal would not be introduced in bill form until sometime in January or February next year. He said that proposal likely will be included in the state’s omnibus energy bill.
“The expectation is that this is going to be a very complex and contentious bill, and one only can imagine that it probably will go to the end of the legislative session in July before it finally gets resolved,” Sandeen said. “We may be another six or seven months without any relief.”
In the meantime, he added, the waiting list for new projects continues to grow. Sandeen said that 112 MW of projects currently are on hold, as everything but the smallest of projects are being placed on hold while the industry waits for direction from the administration, and new projects are added to the list by the week.
According to Sandeen, the ideal situation for the solar industry moving forward would be for the state’s administration to lift the current caps, which vary by utility, so that the industry can reach the administration’s target of having 1,600 MW of installed solar capacity in the state, and current projects can be completed before the expiration of the federal investment tax credit (ITC) in December 2016. Right now, Sandeen said, the state has just under 1,000 MW of installed capacity, and with all larger projects on hold again, many projects will not be able to meet the ITC deadline.
For now, MassSolar plans to focus on sending a message to the state legislature that it should follow the recommendation of the state’s net metering task force to complete a value-of-solar study and base the net metering credit rates on real data.
“We believe that if you provide fair and equitable compensation for the grid and solar owners, the need for arbitrary net-metering rate changes or minimum bills is eliminated, because if we are actually allocating costs fairly and allocating benefits to all the parties involved, we can move forward and move to a renewable energy future,” Sandeen said.
Vermont Reaches Net-Metering Cap Earlier Than Expected
Two Vermont utilities in November announced changes that will update their net-metering programs in order to accommodate reaching the current program cap of 15 percent peak load earlier than anticipated.
Vermont Electric Cooperative (VEC), which serves eight Vermont counties, said that as of Nov. 1 it had reached its 2016 cap and that it would immediately stop accepting any new net metered projects larger than 15 kW for 2016. It will, however, accept projects of 15 kW or smaller through Nov. 30. As of Dec. 1, VEC’s 2016 program will be closed.
Under Vermont’s 2014 net-metering law, the state’s utilities, after reaching the 15 percent peak-load cap, can continue to accept solar net metering systems of 15 kW or less without prior regulatory approval. For other net-metering systems, the Vermont Public Service Board (PSB) can raise the current cap on petition of a utility. The law requires the PSB to put in place a new net-metering law on Jan. 1, 2017. According to the bill text, PSB must by Jan. 1, 2016, submit a final proposed rule to the Vermont House Committees on Commerce and on Natural Resources and Energy and Senate Committees on Finance and on Natural Resources and Energy.
VEC said that, for projects larger than 15 kW starting now and projects 15 kW and smaller starting Dec. 1, the utility plans to ask the PSB to issue certificates of public good with the following conditions:
- That projects not be constructed or interconnected until after Jan. 1, 2017
- That the rules of the net-metering program that start on Jan. 1, 2017, apply to those projects
A spokesperson for Green Mountain Power (GMP) said that, having reached its program cap, the utility on Nov. 18 filed a request with the PSB to extend its net metering program on a limited basis.
GMP in a Nov. 16 statement said that, pending board approval, it will continue to allow homes and businesses to go solar by accepting net-metering applications that are 15 kW and under. The proposal also allows for 7.5 MW of community solar projects for homes and businesses that cannot directly place solar on their home or property.
Vermont solar developer SunCommon is responding to the net-metering program changes announced this month by concentrating its education efforts on Vermont homeowners to ensure they understand what the changes mean for them.
SunCommon’s services allow homeowners to commit to net-metered solar projects without any up front costs.
“We handle everything from financing to design to permitting,” Emily McManamy, a spokesperson for SunCommon, said. “The scramble is on us to file these permits in time, but for the homeowner, they just need to say yes to solar.”
McManamy added that SunCommon is encouraging Vermonters that are interested in solar to commit now so they can get in under the cap extensions and take advantage of the federal ITC incentive before it expires.
New Hampshire Hits Net-Metering Cap in One Year
With arguably the lowest net-metering cap in New England, its no surprise New Hampshire hit its 50-MW cap, which represents just 1 percent of peak demand, soon after solar leasing companies entered the state. Up until 2014, the state had less than 10 MW of solar installed but over the course of 2015, two of the state’s three utilities hit their caps with the third approaching it quickly. Further spurring the growth of solar in New Hampshire is a tweak to the law that allows group net-metering.
Susan Glick, a spokesperson for Sunrun, a solar leasing company that does business in New Hampshire said the cap is “a threat to the industry.” She believes that it is the access to solar with no money down that created that surge in applications. “Just at a point in time where [solar] is finally available, do you really want to shut it down?” she asks.
Glick argues that solar with net metering is what the public wants. Sunrun does business in many states and has seen this battle heat up many times. “We have seen attacks by utilities on 40 or 50 occasions and overwhelmingly we have been successful in preserving rooftop solar," she said.
For New Hampshire, Glick would like to see utilities allow for an immediate extension of the cap so that solar interconnection applications could continue to be filed until there was a legislative session that officially changed the law. She points to a letter sent by the New Hampshire Sustainable Energy Association and signed by 63 major New Hampshire companies that calls for immediate action to take place.
A thriving solar industry creates jobs and economic activity as well as the emission-free electricity that states need. “Rooftop solar creates high quality, full-time local jobs that can’t be outsourced, and it drives economic growth…NH's clean energy jobs pay annual wages that are 50 percent higher than the state average annual wage,” the letter said.
“So the bottom line is the public wants this,” said Glick.
The New Hampshire legislature reconvenes in January 2016 but at this time it is unknown when the net-metering issue will be addressed.
Lead image: Solar panels on a red roof. Credit: Shutterstock.