The World's #1 Renewable Energy Network for News, Information, and Companies.
Untitled Document

Finding Common Ground: Is This Document the Answer to the Net Metering Debate?

One of the problems with the increasingly contentious debates over net metering is that both sides often apply different calculations to compare the value vs. costs of distributed solar energy. Now a new report seeks to be a roadmap that everyone can use to lay out a framework for calculating costs and benefits of net metering, and hopefully get everyone starting from the same point.

The report from the Interstate Renewable Energy Council (IREC), "A Regulator's Guidebook: Calculating the Benefits and Costs of Distributed Solar Generation," was invoked this week at Solar Power International (SPI) during talks about the future of net metering. It summarizes three takeaways about distributed solar energy generation (DSG) that should be primarily weighted in any net metering discussion: 

  • It offsets combined-cycle natural gas facility, which should be factored in as an avoided energy cost
  • Installations are predictable and should be included in utility forecasts of capacity needs, and credited with a capacity value upon interconnection
  • Valuations of societal benefits should be included, such as job growth, health benefits, and environmental benefits.

Studies in California and Vermont have concluded that net metering's annual benefits to ratepayers outweigh costs. But other states from Arizona to Texas have applied varied assumptions (and omissions) to come up with different conclusions about the costs and benefits of DSG. The upshot: there's been a glaring need for a common set of methodologies and process transparency. Are utilities including how net metering can help them defer of costs such transmission and distribution (T&D) investments, and how does that offset any lost revenues? What about putting a value on how solar DG can make storm outages less severe to all customers?

These debates may come up with different final values, but "we should be able to approach it with the same methodology," said Karl Rábago, principal of Rábago Energy and co-author of the study, in an interview just before Solar Power International. "It'd sure be handy to have a single document" that laid out best practices for analyzing the value of solar, echoed co-author Jason Keyes, partner at Keyes, Fox & Wiedman LLP.

At its heart, the report lays out a "cost and benefit unbundling" of the attributes and costs for solar generation so that they can be more easily understood, according to Rábago. "We say there's a value over there you're ignoring, or a cost you're tolerating, and they're both wrong. We can make a business plan out of harvesting that value and eliminating those costs," added Keyes. At the same time, the authors do think that net metering can be structured so that utilities "are made whole" while maintaining a level of simplicity. Maybe it'll look more like a value-of-solar-tariff (VOST) that Austin Energy determines, or maybe it'll be more adjusted to some other form of net metering.

The primary target audience for this document is regulators, who have a key role in "establishing guardrails" for how states value DSG, they explained.

"Utilities have always used avoided costs as a way to keep renewables from being implemented," such as basing them on baseload resources to translate to much higher comparative costs, points out Lee Peterson, senior tax manager with CohnReznick. This study points the way to a "huge democratization" that lays out the factors for cost/benefit analysis for everyone to see and apply. "Like it or not, it's impossible for utilities to ignore this stuff and give it no value," Peterson said.  "The day is coming a lot sooner than anyone thought as far as acceptance of distributed generation."

This new IREC study, paired with a recent one from the SEIA and SEPA, creates a body of literature showing the importance of including "a whole slew of positive attributes in addition to alleged costs" to assess DSG on the grid, Peterson said. Forget the uphill fight of convincing utilities to look at DSG because of state-mandated renewable portfolio standards (RPS); now even states without an RPS such as Georgia, South Carolina, and others can examine and justify DSG based on its merits. "That's a huge step from where the industry was even two years ago," he said.

Moreover, the skill base developed through an agreed-upon methodology will apply to other important issues down the line, from energy storage to load management and smart grid. "We need to understand dynamic resources at the distribution edge," Rábago said. Blending on-site solar PV with demand response and energy efficiency, "that's going to be the next step," Keyes added. And those further analyses of those types of resources "would benefit a great deal by this component-by-component analysis."

"Every now and then, big things move through the electric utility industry," Rábago said. Distributed resources seem to be heading this way as they become more affordable and desirable by customers and stakeholders. "Inside utility companies there's a realization that these [distributed] resources are going to be more and more a part of their lives." Once valuation methodologies can be agreed upon, "the kinds of calculations left are the ones that are in the end public and open." 

Lead image: Solar rooftop via Shutterstock

Untitled Document

RELATED ARTICLES

Solar Beats Gas in Colorado

Christopher Martin, Bloomberg SunEdison Inc., the biggest clean-energy developer, began construction on a Colorado solar farm that will be the larg...

Listen Up: Solar Advice from Pat Redgate at Ameco Solar

The Energy Show on Renewable Energy World Technologies, companies and business models in the solar industry come and go. But even in the relatively new solar i...

Six Observations about the US Solar Industry Mid-2015

Paula Mints In the U.S. mid-2015, deployment of solar technologies into all applications is at a pivotal point with several facto...

Indian Solar Market Ready to Takeoff

Renewable Energy World Editors Mercom Capital Group, a global clean energy communications and research firm, released its quarterly update on the In...

PRESS RELEASES

Intersolar AWARD „Solar Projects in India“ – Applications being accepted until September 18

The Intersolar AWARD in the category Solar Projects in India honors projects in the fie...

OFS Announces Commercial Availability of InvisiLight® MDU Optical Solution for Multiple Dwelling Units

OFS, a leading-edge designer, manufacturer and supplier of innovative fiber optic netwo...

New local energy partnership brings innovative solar tracker to Washington State

A new partnership will bring the innovative AllEarth Solar Tracker solar electric syste...

30 days to GRC Annual Meeting & GEA Geothermal Energy Expo

The Geothermal Resources Council (GRC) has announced that it is only 30 days to go to t...

FEATURED BLOGS

Washington, DC Bridges the Solar Gap

The District of Columbia has enjoyed 15 years of strong economic growth. But prosperity is spread unevenly across the...

Cronimet / THEnergy study: In solar for mines size does not always matter - Reducing CAPEX with energy efficiency and load shifting

Munich, September 2015. Mining companies are constantly gaining interest in solar solutions because frequently solar ...

Final Program Now Available for GRC Annual Meeting & GEA Geothermal Energy Expo

GRC Annual Meeting & GEA Geothermal Energy Expo - Final Program from

Vacancy? No Problem!

Have you ever tried to sell an efficiency product or service to a prospect that owns or manages a building with high ...

FINANCIAL NEWS

Jim is Contributing Editor for RenewableEnergyWorld.com, covering the solar and wind beats. He previously was associate editor for Solid State Technology and Photovoltaics World, and has covered semiconductor manufacturing and related industries, ...

CURRENT MAGAZINE ISSUE

Volume 18, Issue 4
1507REW_C11

STAY CONNECTED

To register for our free
e-Newsletters, subscribe today:

SOCIAL ACTIVITY

Tweet the Editors! @jennrunyon

FEATURED PARTNERS



EVENTS

International Energy and Sustainability Conference 2015

The fourth International Energy and Sustainability Conference will be he...

Intersolar South America 2015

Exhibition and Conference: September 1-3, 2015 Intersolar South America ...

Intersolar India 2015

Exhibition and Conference: November 18-20, 2015 Intersolar India 2015 I...

COMPANY BLOGS

Be Like The Personal Trainer

Most people think sales is all about forming strong relationships with p...

7 Tips For Capturing Attention

When you’re giving a presentation or pitching a sale, you’re...

A Mind Trick For Call Reluctance

The more you think of yourself as the connection between a product or se...

NEWSLETTERS

Renewable Energy: Subscribe Now

Solar Energy: Subscribe Now

Wind Energy: Subscribe Now

Geothermal Energy: Subscribe Now

Bioenergy: Subscribe Now  

 

FEATURED PARTNERS