Senior decision-makers come together to connect around strategies and business trends affecting utilities.

Post

Rooftop Solar Credits...Your Time is Almost Up

image credit: Photo 36626597 © Zygotehasnobrain | Dreamstime.com
Nevelyn Black's picture
Writer Independent

Nevelyn Black is an independent writer with a background in broadcast and a keen interest in renewable energy.  In the last few years, she transitioned from celebrity interviews and film shoots...

  • Member since 2017
  • 747 items added with 431,722 views
  • Jan 25, 2022
  • 278 views

It’s official, residential solar is in trouble.  Most residential solar credit programs were started to promote clean energy and provide customer savings.  Residential customers were happy to pay the upfront costs, of rooftop solar installation, in exchange for lower bills and credits for excess energy sent to the grid.  The federal solar investment tax credit isn’t set to expire until 2024 but some states are making the switch now. 

  • States like Georgia are maxed out and utilities are reconsidering net-metering rates. In Georgia, the pilot program was capped at just 5,000 participants and might not be opened to new customers until early 2023. Georgia Power will most likely review the program this year with its proposed long-term energy plans and subsequent rate changes to the state utility commission.
  • California tabled its plan to reduce benefits by 80 percent when it was met with fierce opposition. However, it may resurface after a few tweaks.  “There’s no question the commission needs more time on this,” said Bernadette Del Chiaro, the executive director of the California Solar and Storage Association.
  • The Florida Legislature is considering a plan that would crack down on rooftop solar credits as well. Many are concerned about the domino effect this will have.  The passage of these bills could discourage further investment in solar, cause the loss of thousands of solar-related jobs leaving customers who already own solar stranded for maintenance help.  “This bill is a small-business issue,” said Michael Vergona, president and co-founder of Urban Solar. “When you add additional costs to the cost of solar, you take it off the table for many homeowners.”  
  • State utility regulators in Arizona and Louisiana have agreed to end net metering. In the past, Louisiana combined the 50 percent state tax rebate, the federal Investment Tax Credit with the retail-rate.  Now regulators have replaced net metering with compensation based on a 12-month calculation of wholesale rates.
  • In Arizona, net metering has been phased out causing a decline of about 20 percent in solar installations.  Admittedly, 20 percent may not seem like much but Arizona is the fifth-ranked consumer of solar energy systems in the U.S.  Net metering supporters are worried, if it can happen there, it can happen anyway.  

On the other side of the issue, Republican Sen. Jennifer Bradley defends Florida regulator’s plans arguing that the solar industry is “mature,” and the current policy is “regressive.” She believes this bill, SB 1024, will level the playing field for non-solar owners.  “The cost shift to non-solar customers is substantial,” Bradley said.  Is the decision to reduce or remove net metering premature?  How are utilities defending long-term plans that don't include credits to residential solar customers?

Nevelyn Black's picture
Thank Nevelyn for the Post!
Energy Central contributors share their experience and insights for the benefit of other Members (like you). Please show them your appreciation by leaving a comment, 'liking' this post, or following this Member.
More posts from this member
Discussions
Spell checking: Press the CTRL or COMMAND key then click on the underlined misspelled word.
Rao Konidena's picture
Rao Konidena on Jan 25, 2022

I believe it is premature to remove the net metering for solar. Here is why from a residential solar owner perspective –

  • In my home state Minnesota, as an Xcel Energy customer, I buy from my utility electricity at a rate of 12 cents per kWh but only receive 7.139 cents/kWh for any excess energy generated between 1 pm and 7 pm. See https://www.mnseia.org/pv-demand-credit
  • If I look at my historical 2 years of solar energy generated, the month of June is the peak month, with spring as the ramp-up month (due to snow) and July-Sep as a ramp-down month (due to shading from trees). See attached data chart.
  • The size of the system was dependent on my annual energy usage when installed. In Minnesota, homeowners are limited to 120%. See wording from the statue here – “Participation in this program may be limited to systems of a certain size or have other restrictions, such as that the amount of the expected production from the solar facility does not exceed 120% of the annual on-site energy consumption combined with the size of any subscription the customer might have to a Community Solar Garden.”. Source - https://mn.gov/puc/activities/economic-analysis/distributed-energy/net-metering/
  • Utilities such as Xcel Energy can aggregate net-metered solar and participate in energy markets such as Midcontinent Independent System Operator (MISO). It is important to realize here that organized markets provide 3 market services – 1) energy (solar is paid Locational Marginal Price), 2) capacity market and 3) Ancillary Services such as frequency regulation.
  • Inverter based resources such as net-metered solar can provide grid services such as
    • disturbance ride-through,
    • reactive and voltage support,
    • they can slow down and arrest frequency declines,
    • they can regulate frequency like an Automatic Generation Control (AGC) on inertia-based systems like a coal plant and
    • provide dispatchability like any other resource. This last point is why MISO calls solar and wind as Dispatchable Intermittent Resources (DIRs).
    • Source - https://www.sciencedirect.com/science/article/pii/S104061901830215X
  • Because solar is variable (some take offense to the word intermittent when referring to renewable sources such as wind and solar), the grid operators conduct an engineering analysis to determine solar’s contribution at the time of peak demand. MISO gives utility scale solar only 50% capacity credit, meaning a 100 MW solar counts as a 50 MW solar for reliability purposes.

So, as seen above, solar is already restricted because a residential customer is not paid the same rate at which s(he) is buying energy, the size of the system is proportional to their annual energy usage, and weather (if its snow in the winter, it is shading from the trees in the summer). And the markets penalize solar due to its variable nature even though solar can provide grid services like a coal plant.

Hence we should not remove net-metered solar yet.

Ed Reid's picture
Ed Reid on Jan 25, 2022

There is a huge difference between net metering only the commodity and net metering the commodity plus the costs of owning, operating and maintaining the utility. The utility customer with solar generation continues to use the utility to take excess site-generated electricity during the day and to provide electricity at night. Utility commissions should not have approved commodity plus net metering and the utilities should not have agreed to it, because it is a hidden "tax" on customers who do not generate onsite.

Nevelyn Black's picture
Nevelyn Black on Jan 26, 2022

Thanks for all your feedback and the data.  Looks like Energy Central opened the floor for more comments on the topic.  Would love to see your viewpoints posted there are as well. Energy Central Topic of Focus: Let's Talk About the California Net Metering Debate

Bryan Leyland's picture
Bryan Leyland on Jan 25, 2022

Anyone exporting power to the grid should get paid the value of the power to the grid at that moment. If they are paid more than that then other consumers have to pay more for their electricity.

Bob Meinetz's picture
Bob Meinetz on Jan 27, 2022

Thank you, Bryan. That would seem obvious, but solar panel installers are working overtime to obscure how electricity is bought and sold, and who is doing the buying and selling, to jack up its price for consumers.

Consumers, after all, have better things to do than analyze their electric bill each month. All they see is their electric bill going up. And up. And up.

Get Published - Build a Following

The Energy Central Power Industry Network is based on one core idea - power industry professionals helping each other and advancing the industry by sharing and learning from each other.

If you have an experience or insight to share or have learned something from a conference or seminar, your peers and colleagues on Energy Central want to hear about it. It's also easy to share a link to an article you've liked or an industry resource that you think would be helpful.

                 Learn more about posting on Energy Central »