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Austin Energy\u2019s VOST might be the answer to the NEM controversy.<\/p>\n
HERMAN K. TRABISH: AUGUST 24, 2012<\/p>\n
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Ten U.S. utilities currently account for 70 percent of all net energy metering (NEM) — but most solar companies and utilities are thinking about it.<\/p>\n
Innovative financing, unprecedentedly low panel costs and local mandates are increasing the prevalence of photovoltaic solar-generated electricity. But\u00a0utilities<\/a>\u00a0and ratepayers without solar are concerned about potential cost inequities. Austin Energy (AE), the progressive municipally owned Texas utility, may have a solution.<\/p>\n NEM allows solar system owners to roll their meters backward as they earn retail rates for the electricity their systems send into the grid. In sunny places, bills can roll back to zero. This may shift some costs to the utility and the utility\u2019s other ratepayers.<\/p>\n When a PV system owner doesn\u2019t pay a bill, it\u00a0deprives the utility of income<\/a>\u00a0although that utility is still serving that customer.<\/p>\n When PV system owners don\u2019t pay for electricity, they also don\u2019t pay\u00a0ancillary charges for transmission and distribution<\/a>\u00a0system operations and maintenance even though both their electricity consumption and production use the infrastructure. That could make such payments higher for other ratepayers.<\/p>\n The result is a growing clamor from non-solar owning ratepayers and utilities to end NEM.<\/p>\n Solar advocates say NEM is\u00a0vital to the growth of solar<\/a>. It plays a pivotal role in the decision to bear the large upfront costs of installing solar because it significantly reduces the \u201cpayback period\u201d for system purchasers.<\/p>\n The rapidly expanding third-party-ownership model is eliminating the hurdle of upfront costs for residential rooftop solar. But NEM remains essential to the new financing scheme\u2019s funders because it hastens the return on their investment.<\/p>\n AE has been involved in solar for decades, explained AE Solar Incentives Program Manager Leslie Libby. It has long provided NEM because \u201ccosts were so high it was never going to be able to compete with coal or nuclear.\u201d AE\u2019s analysis, Libby added, is that even NEM, without a rebate on the system cost, is inadequate. \u201cWe still need to overcome the obstacle of upfront capital costs.\u201d<\/p>\n Because of considerations pertaining to the deregulated Electric Reliability Council of Texas (ERCOT) electricity market, AE does not allow third-party ownership in its service territory, although, Libby noted, as solar approaches grid parity, a transition to third-party ownership will likely be necessary.<\/p>\n Solar supporters at AE could see solar delivering an array of up-to-then unquantified benefits to a city that basks under one of the richest U.S. solar resources. \u201cIf we quantified them,” Libby said, \u201cwe could pay more for solar.\u201d<\/p>\n The result was Austin Energy\u2019s Value of Solar Tariff (VOST), an alternative to NEM that moves from a production-based incentive to a\u00a0hard value<\/a>\u00a0that balances out in the utility\u2019s bookkeeping. It may satisfy utilities, ratepayers and solar advocates.<\/p>\n The VOST was derived from analyses by PG&E, Sandia Labs, Clean Power Research and others. It was, Libby said, \u201can inclusive process\u201d that recognized the\u00a0multiple added benefits<\/a>solar brought the municipality, including:<\/p>\n 1.\u00a0Energy value<\/a>\u00a0for predictably priced point-of-consumption electricity production;<\/p>\n 2.\u00a0Generation value<\/a>\u00a0for the avoided cost of building traditional generation;<\/p>\n 3.\u00a0Environmental value<\/a>\u00a0for reduced emissions and pollution;<\/p>\n 4.\u00a0Transmission and distribution system value<\/a>\u00a0for reduced burdens on existing wires and infrastructure and the eliminated need for new wires and infrastructure;<\/p>\n 5.\u00a0Disaster recovery value<\/a>\u00a0for serving when central stations go offline;<\/p>\n 6.\u00a0Reactive power value<\/a>\u00a0for stabilizing voltage drops that cause outages; and<\/p>\n 7. Loss savings value for preventing all the above-named losses.<\/p>\n In the 12.8 cents per kilowatt-hour 2011 update of the annually revalued tariff, \u201cthe value for solar went up,\u201d Libby said, because the times \u201cwhen solar is produced match [the times] when ERCOT needs power.\u201d<\/p>\n Beginning in October, AE\u2019s solar system owners will be billed the same five-tiered, seasonally adjusted rates ranging from 1.8 cents to 11.4 cents per kilowatt-hour and the $10 monthly Customer Charge levied on all other AE electricity consumers. No meters will roll backwards. But solar owners will also be credited with 12.8 cents for every kilowatt-hour they send to AE.<\/p>\n Theoretically, there should be no revenue loss to utilities or undue burden to other ratepayers because AE will only be paying for value it receives.<\/p>\n Solaria<\/a>\u00a0Vice President for External Relations and Vote Solar co-founder David Hochschild, who helped lead the recent fight to protect California\u2019s NEM, said AE\u2019s VOST is still an unknown. Its viability as a solar support, he noted, depends entirely on where the tariff is set. But, he added, \u201cit\u2019s good to see Austin Energy showing leadership.\u201d<\/p>\n The VOST applies only to AE\u2019s residential solar. AE bills list it as the residential solar rate. Some AE promotional materials call it Gross Metering.<\/p>\n \u201cWhat it is not,\u201d Libby insisted, is\u00a0an incentive<\/a>. It is a credit applied to our customer\u2019s bill for bringing this valuable resource into our service territory. That resource has\u00a0a value to Austin Energy<\/a>\u00a0and we are going to credit them for that value.\u201d<\/p>\n What made the VOST \u201cpalatable both internally and externally,\u201d Libby said, \u201cis that a residential solar system owner is billed like every other customer for their total consumption. The brilliance of it is this piece. Solar system owners are no longer a special class of customer.\u201d<\/p>\n At the same time, she added, \u201cwe don\u2019t have non-solar-owners hounding us anymore. But system owners get credited at the rate the utility has agreed is the value of bringing this resource into Austin. So far, it makes sense to everybody.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":" Austin Energy\u2019s VOST might be the answer to the NEM controversy. HERMAN K. TRABISH: AUGUST 24, 2012 Ten U.S. utilities currently account for 70 percent of all net energy metering (NEM) — but most solar companies and utilities are thinking about it. Innovative financing, unprecedentedly low panel costs and local mandates are increasing the … Continue reading Can a \u201cValue of Solar Tariff\u201d Replace Net Energy Metering?<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-547","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"_links":{"self":[{"href":"https:\/\/www.greeniverse.com\/solar\/wp-json\/wp\/v2\/posts\/547","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.greeniverse.com\/solar\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.greeniverse.com\/solar\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.greeniverse.com\/solar\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.greeniverse.com\/solar\/wp-json\/wp\/v2\/comments?post=547"}],"version-history":[{"count":0,"href":"https:\/\/www.greeniverse.com\/solar\/wp-json\/wp\/v2\/posts\/547\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.greeniverse.com\/solar\/wp-json\/wp\/v2\/media?parent=547"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.greeniverse.com\/solar\/wp-json\/wp\/v2\/categories?post=547"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.greeniverse.com\/solar\/wp-json\/wp\/v2\/tags?post=547"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}![\"\"](\"http:\/\/www.greentechmedia.com\/content\/images\/articles\/3AEnem.jpg\")
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