Some utilities’ opposition to the so-called free ridership of solar customers, and the related downward pressure on the value of net metering, has become an oft-repeated headline. But this month, utilities and solar developers in New York pioneered a new, cooperative approach to the issue that deserves close attention.
In a ConEd filing to the NYS Public Service Commission, the utility proposed a plan developed in a “Solar Progress Partnership” comprising the state’s six electric utilities and three largest solar development firms. The proposed plan includes a gradual decrease in net metering rates for new solar installations, while guaranteeing rates for 15 years from the time of installation. Fees would be paid to utilities, not by customers, but by solar developers, and only for community and remote solar projects that are costlier to interconnect – and the plan includes rate incentives for solar projects in geographically favorable locations that would be identified by the utilities. In exchange, the solar developers would receive pricing certainty and priority in the interconnection queue.
An article in Renewable Energy World quotes Patrick Jobin of Credit Suisse Group AG as saying that utilities and solar firms are “finally playing nicely in the sandbox.” Jobin wrote that the NY utilities and firms are “deviating from all other net metering discussions that can only be described as acrimonious and overly contentious.”
The same article quotes Kit Konolige, a utilities analyst at Bloomberg Intelligence in New York, as saying, “I don’t think we’ve seen anything exactly like this.”
The plan proposed by the Solar Progress Partnership is hardly a done deal, and there is plenty that could go wrong; but the filing is worth following as a model that, if successful, could be applicable to other states. It also suggests subsets of the solar market – geographically favorable and unfavorable areas, community solar projects – where state clean energy funds might want to target differentiated solar incentives.