Solar panels generate discussion— Net metering rates debated
- Published: October 4, 2012
On bright, sunny days, the electric meter at Harvey and Ruth Paige’s Meadow Lane residence spins backwards, thanks to a 3.45-kilowatt solar photovoltaic array mounted in their backyard that turns sunlight into electricity. On those days the Paiges become electricity producers, feeding green power to their neighbors. Since they keep their own use low with energy-efficient appliances, during a recent month they supplied 150-kilowatt hours of electricity to the grid.
But proposed changes to the Village’s electricity ordinance may cut how much the Paiges, and other local renewable energy producers, are compensated for the power they produce. The Village may soon pay local green electricity producers the same amount as it does outside power contractors, a change that some say is a more fair arrangement, while others say they fear the new policy would discourage the installation of more renewable energy systems throughout town.
“We all know what’s best for the planet, and it’s slightly at odds with what’s best for the Village,” said Council member and Energy Board representative Rick Walkey this week. The Energy Board will consider the draft legislation, which, under a proposed new interconnection agreement with local producers, pays them a wholesale rate of around $.06 per kilowatt-hour for electricity they generate, instead of a retail rate of around $.08.
Village Manager Laura Curliss said that the current practice of paying electricity producers the same rate that the Village charges is unfair.
“The price we are charging our customers for power includes transmission costs, maintenance costs, staff salaries,” she explained. “The homeowner does not maintain our grid, and yet we’ve paid them retail rate [for their electricity].”
Harvey Paige, however, argues that the Village should promote renewable energy by compensating green producers with the higher rate and pay them for all of the electricity that they contribute to the local grid. Right now, producers can bank the power they generate to use later, but if they produce more than they use they never see a dime for that electricity they’re sending over Village power lines. Plus, they are charged $10 per month even if they use no power from the Village.
“We are a progressive village so we should be doing better than the state and federal levels by encouraging renewable energy,” Paige said. “At least we shouldn’t do anything to discourage it.”
Pat Brown, who has a 5-kilowatt roof-mounted solar array on Stewart Street, contends that the Village should incentivize residential renewable energy generation by keeping the current “net metering” arrangement, since investor-owned utilities such as Dayton Power & Light provide financial incentives for homeowners to install renewables. Also, she said that with just three residential producers there is little chance that they would ever make a significant dent in town’s power purchases or the Village’s bottom line.
“It appears that there is a fear that somehow we’ll produce so much solar that the Village won’t meet their [power supply] contracts,” Brown said. “But we’re producing so little compared to what the village is using.”
Net metering in the village
In 1999, the Ohio state legislature passed a law requiring that all investor-owned utilities offer net metering to their customers. Even though municipally-owned electric power systems, such as the Village’s, were exempt from the law, when Brown installed her first 10 solar panels in 2010, a net metering arrangement was set up with the Village.
Under that scheme, Brown supplies the grid with energy she doesn’t use, perhaps on a sunny day, and draws from the grid at night when her panels aren’t producing. The meter spins backwards when she overproduces, giving Brown credit that she can use when she consumes more than the panels can provide. So in effect, Brown is getting paid the retail rate for the electricity she generates.
However, each month Brown’s meter resets, so the excess power she generates doesn’t carry over into the next month. By contrast, the Ohio net metering law requires that any surplus generation carry over until the end of the billing year. It also stipulates that utilities pay the generation, or wholesale, rate and not the retail rate.
Since 2010, other local households have followed suit. The Paiges installed their solar system, Brown upgraded hers and Sylvia Carter Denny and Bryon Dann put up a 6.5-kilowatt array at their Kingsfield Court home. Combined, their annual generation capacity is about 15 kilowatt-hours, or 1/2,000th of the Village’s annual consumption of 30 megawatt-hours. Other renewable energy systems in the area, including Fred and Kathy Stockwell’s 2.5-kilowatt combined wind and solar system and the 4.7-kilowatt solar array at the Springs Motel, are located outside of the Village’s electric service area and are not connected to the local municipal utility.
According to the Village’s electricity ordinance, net metering is allowed when on-site generating capacity is 25 kilowatts or less. That amount was recently increased to 50 kilowatts in educational institution zones following a request from Antioch College, which is erecting a 50-kilowatt solar array on North Hall.
A new proposal
But based upon a recommendation from the Village’s power consultants, Courtney & Associates, the current ordinance should be changed, Curliss said. The proposed ordinance, which has been discussed in Council but not yet officially introduced, includes an interconnection agreement between renewable energy producers and the Village where no such agreement exists.
That interconnection agreement requires that producers pay the Village to install a bi-directional meter. The meter measures separately how much energy is produced and consumed. Electricity being sent from the Village grid to the residence is charged at the standard retail rate while electricity being generated on-site is purchased by the Village at a lower wholesale rate. That rate, which would currently be $0.063 per kilowatt-hour, is set at the running average 12-month cost that the Village pays its outside power suppliers. Meanwhile, the $10 minimum fee, which Curliss said is most accurately described as a “readiness-to-serve” charge, would be continued, since it helps pay for the electric system’s overhead.
“Unless you are unwilling to hook up to the grid, you need to pay a fair price to have that grid ready to serve you,” Curliss said, in defending the fee. “It pays to keep the wires and the poles intact and for the staff and crew to service them.”
Curliss urged that Council consider the changes even though there are so few renewable energy producers, because if the Village is requiring new equipment, then producers should get it installed when their systems go up. More households may soon jump on board.
“We can’t go down a road of putting in one kind of meter, and then saying we need to pay wholesale and say we need another,” Curliss said. “Suddenly you could have 1,000 homes. For a few people you can do anything, but sooner or later it becomes unworkable.”
Curliss added that the Village currently has contracts to purchase 82 percent of its electricity needs through renewables, including large scale hydro, landfill gas, wind and solar projects, so addition incentives may not be needed. And Walkey said the Village is still in discussions about building a larger solar generation system locally, which could be a financial boon to the Village while helping its carbon footprint. Overall, the Village needs to look at the costs and benefits of incentivizing household-scale solar by paying a retail rate to customers who generate it, Walkey said.
“Is the money that we’re losing enough to encourage renewable energy?” Walkey asked. “Is it worth it to the village to eat that amount of money? Do we want to compensate beyond that?”
Solar households respond
As a pioneer of household renewable energy generation, Brown said that she has helped the Village meet its goal of reducing its carbon footprint even while total village electricity use rose over the same time period. So she was surprised when she learned that the Village might reduce its compensation for local producers. Even if the three current producers were “grandfathered in” and could continue on under the existing arrangement, Brown would still be dissatisfied, she said, since future customers would have less incentive to go green.
“It would be both a fair and generous practice for Yellow Springs to join those who do more [to reimburse renewable producers] than those who do less, especially since the amount of reimbursement is minuscule and the Village has offered no other incentives to increase solar production among its residents,” Brown wrote in a recent letter to the editor.
Paige said that the threat of global climate change should motivate the Village to do more to reduce its greenhouse gas emissions. As an example, they should subsidize renewable energy production at the household level with the higher rate, he said. Referring to the recently cancelled SolarVision solar farm, Paige said that if anyone should be subsidized to produce green power, it should be residents, not outside companies. Furthermore, household-scale solar distributed throughout town may be advantageous to large-scale solar projects since they require high transmission costs.
“The closer you are to the source of electricity when you consume it, the better,” Paige said.
Brown agreed with Paige that households can contribute a lot to the village’s green energy aspirations, but argues that concerns that huge numbers of customers will erect solar panels for financial gain are overstated. According to Brown’s calculations, at the current rate of installation of about one local household per year, it would take 1,800 years for every household in town to install solar panels. Even that figure is unlikely, since 80 percent of Yellow Springs is covered by trees, she added.
“The fear that scores of people will rush to put solar on their residences is a silly myth,” Brown wrote.
Tours of local renewable energy production sites, including the Paige and Dann/Denny residences, will take place the weekend of Oct. 6–7 as part of the annual Ohio Green Energy Tour. Visit www.greenenergyohio.org for a schedule and more information.