Is the Green Mountain state about to become the green power state? As the battle over net metering policy is being fought in state legislatures across America, one small state has given solar advocates a big win – Vermont.
Governor Peter Shumlin signed legislation into law yesterday that will nearly quadruple the net metering cap utilities have been using, from 4% to 15% of peak load. The bill enjoyed bipartisan support, passing 136-8 in the state house and unanimously in the state senate.
Vermont may rank among the middle of the pack in America’s solar industry, but the new law is a significant validation of the value of solar energy for consumers and the overall economy, and shows utilities can work with distributed generation without falling into the “death spiral” fueling so many state-level fights.
The new cap means retail electric customers will now be compensated for sending solar energy they don’t consume back onto the grid, up until net metering payments surpass 15% of peak demand from the previous year or from 1996, whichever amount is greater. Vermont currently has 3,600 net metering projects.
“Vermont’s decision sends the clear message that rooftop solar delivers benefits to utilities, the grid, and all ratepayers,” said Bryan Miller, President of The Alliance for Solar Choice.
Any grid-connected renewable energy generation system below 500 kilowatts (kW) capacity, intended to primarily offset a consumer’s own electricity consumption will qualify for the new net metering limit, on a first-come, first-served basis.
However, a provision within the law also allows community solar gardens to qualify for net metering payments, even if they are located away from consumers, and “qualified micro-combined heat and power systems of 20kW or fewer” will also covered by the law.
Customer compensation will vary by generation technology, but for solar energy, utilities will calculate a monetary credit by multiplying excess kilowatt-hours (kWh) generated during the billing period by the kWh rate paid by the customer for electricity supplied by the utility, then apply that credit to any remaining charges on the customer’s bill. Ratepayers statewide will also benefit from the net metering legislation, as the law will also lower the net metering solar credit on larger projects.
Wider Economic, Reliability Benefits From Net Metering
But beyond customer compensation, Vermont’s net metering leadership could also boost the wider solar energy economy through additional regulatory action. Under the new law, the state’s 10-day fast-track solar permitting registration process will expand to cover projects up to 15kW in capacity from the current 10kW limit; create 5-megawatt (MW) solar pilot projects for utilities and municipalities; and start planning for additional net metering reform beginning in 2017, when federal tax credits may expire.
“Since 2011, we have quadrupled the amount of solar energy on the grid, with nearly 54MW installed or pending today,” said Governor Shumlin. “That push to expand renewable energy brings jobs to Vermont and saves ratepayers on transmission costs.”
Indeed, the state credits distributed generation with helping defer $400 million in transmission projects and saving $16 million in costs. Important facts, considering what impacts the pending Vermont Yankee nuclear power plant closure could have on state electricity supply.
In addition to cutting costs, Vermont solar energy has also created significant economic benefits, according to the Solar Energy Industries Association. 46 solar companies operate throughout the state’s solar value chain, growing 35% in 2013 to employ 1,300 total workers. 16MW of new capacity worth $47 million was installed in 2013, ranking 21st nationally, a 28% increase over 2012.
Solar And Utilities Can Play Nice Together
So as the fossil fuel funded fight against net metering plays out across the US, it’s important to remember that consumers and utilities can both win with solar.
“This major net metering expansion was the result of utilities working alongside the local solar industry and our customers to craft good policy and set a national example,” said Andrew Savage of Vermont-based AllEarth Renewables. “The policy reflects the real value solar provides and shows that Vermont’s local utilities are listening to what customers want and need.”
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