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One Step Forward, One Step Back for Ohio Policy to Fairly Compensate Solar Customers

John Finnigan's picture
Senior Regulatory Attorney EDF

John Finnigan is the senior regulatory attorney for EDF’s US Climate and Energy Program, representing EDF before state public utility commissions on smart grid deployments and energy efficiency...

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  • Nov 30, 2017 8:00 am GMT

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Rooftop solar provides many benefits to the electric grid, like having no fuel costs and increasing electric grid resiliency – the ability to quickly recover from problems.

So how can utilities recognize these benefits and reward people who install solar at their homes and businesses?

A popular way is through net metering, which allows customers to send the electricity from their solar panels to the power grid and receive a credit on their electricity bill.

The Public Utilities Commission of Ohio (PUCO) recently updated the state’s net metering policy, with some positive and some negative changes. Following the lead of the Ohio Environmental Council, Environmental Defense Fund (EDF) helped usher in these updates, and we’ll work to make sure solar customers are compensated fully and fairly.

The good

There are four ways the PUCO rule changes are a positive step for compensating solar customers through net metering:

  • Uniformity: All utilities are now required to offer net metering with standard terms and conditions.
  • Greater potential compensation: The rule allows customers to receive credit for up to 2MW in power-making capacity, or up to 120 percent of their electricity needs. Previously, utilities had varying, lower limits.
  • More land options: Now, Ohioans can build net metering projects across contiguous parcels of land, whereas before customers could only do so on a single parcel. This makes it easier for customers to design plans that are cost-effective.
  • Greater customer access: Under Ohio’s deregulated electricity market, customers can either stick entirely with their default utility or choose to have a different company make the electricity that’s delivered through the utility’s transmission lines. The new rule requires utilities to give these suppliers the energy-use data they need to offer net metering, so customers who buy electricity from them can now access the benefits.

The bad 

Like an insurance payment, capacity payments are a way to compensate solar customers for maintaining the potential to provide enough electricity when the grid is stressed.

The PUCO, however, reduced the overall payments that net metering customers receive. Previously, customers were also paid for “capacity” – or the amount by which their solar panels reduce the utility’s need to contract for power plants to be available to serve all customers when demand is high, like on hot summer days.

Like an insurance payment, capacity payments are a way to compensate solar customers for maintaining the potential to provide enough electricity when the grid is stressed. The PUCO, unfortunately, is taking away that insurance payment, even though the rooftop solar owners are still providing the benefit to utilities.

Although the PUCO is putting in place some positive net metering reforms, it wants to skimp on paying customers for helping to keep the electric grid reliable. The capacity payments are essential if customers are to receive payment for the full range of benefits that solar panels supply to the grid. EDF will work with other stakeholders to try to restore the requirement that utilities must pay net metering customers for both energy and capacity.

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