Value Of Solar Q&A — A Square Cheeseburger In A Round Hole

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Originally posted at ilsr.org

In 2013, Minnesota was the first state to adopt a value of solar policy as an alternative to net metering. It was left to the state’s investor-owned utilities to adopt the policy, but none have as yet. Why don’t utilities want to use value of solar? Should solar advocates be pleased or put-out that the policy lies dormant?

Find out more in this debate between ILSR’s Director of Democratic Energy John Farrell and Xcel Energy’s Rick Evans at a Minnesota Solar Energy Industries Association conference in November 2014.

Use the following links to jump to answers to the hottest questions about the value of solar, or view the full list of questions or watch the entire 68-minute video below.

• How does this compare to feed-in tariffs?
• How does the value of solar conversation fit in with the bigger conversation happening nationally?
• Do any of you think VOS will be implemented by any utilities? If so, when and by whom?

The Full Video

Watch the 68-minute video to see the two address a variety of questions about the policy, including its origins and prospects for implementation.

Questions for the two participants included

The first three minutes of the panel were a collection of audience questions, then answered in bulk. The questions included (links go directly to that portion of the video):

Initial Questions

• Background of the legislative process
• Xcel Perspective on Development of Value of Solar
• How does this compare to feed-in tariffs?
• Do you have any insight into the administrative process for overcoming hurdles?
• What is the prognosis outside of the state?
• What are the challenges that you see for establishing the “adder” for Value of Solar?
• What is the difference between a rate re-design and changing the rate structure?
• Where do you think we’re headed about a debate on who should own (solar gardens)?

The Answers (or parts of the answer)

Additional Questions

• Cost of solar panels likely to come down
• Value of solar likely to go up
• Nothing is ever that simple
• How does the value of solar conversation fit in with the bigger conversation happening nationally?
• What does a 21st century electricity utility look like?
• Narrow View: What is the economic value?
• Broader view: what is public incentive?
• What is it that we want from our utility system in the 21st Century?
• Energy Conservation, Efficiency, Renewables, Distributed Generation
• Problem: Net metering doesn’t fit with the accounting principle
• Value of solar begins to solve the problem for utilities of the future
• What we see all over the county is a state-by-state discussion about net metering
• What is the value that net metered customers are producing?
• Value of energy produced is often more than what the utility says should be included
• How do we change the rules so it makes fiscal sense for utilities to accept the value proposition?
• Community Solar Gardens are about more than just the value of solar
• Current Incentive Programs: 1 Solar Rewards 2. Made in Minnesota
• When we default to the Public Utilities Commission, we default on the decision about where the money comes from
• Where do you see the utility going in terms of grid stability? Is democratic energy seen as an opportunity for Xcel?
• What is Xcel’s position on value per kilowatt hour?
• Do any of you think VOS will be implemented by any utilities? If so, when and by whom?
• Does the PUC allow Xcel to hit targeted ROE’s and if so, why wouldn’t xcel be indifferent to solar investment?
• Surveys show Minnesotans want more solar, and are willing to pay for it—why wouldn’t utilities increase it a little bit?
• How did you come up with the cost of S-RECs as being 2-3 cents?
• Are the rates for solar gardens considered to be a net metering rate or a value of solar rate?
• If you as a garden operator complete a solar garden application for yourself, the applicable retail rate in effect at the time is locked in
• The rate will be updated in February based on the preceding 12 months of historical data
• Right, it won’t be 14 cents forever. The rate updates annually based on the previous year’s revenue and sales data
• The point is that you can’t switch over to the VOS rate, you’re locked in to the applicable retail rate you have because that rate will likely increase

Further reading:

• The authorizing legislation for Minnesota’s value of solar
• ILSR’s comprehensive coverage of the value of solar formula process
• ILSR’s full report on Minnesota’s adopted value of solar policy
• John Farrell’s question on value of solar – we have it, but should we use it?

This article originally posted at ilsr.org. For timely updates, follow John Farrell on Twitter or get the Democratic Energy weekly update.