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Will solar net metering HELP or hurt solar consumers?

Solar NET METERING. Win or lose for Colorado?

Sun Source Solar Brokers here with an important ruling by the Colorado Public Utilities commission came down Wednesday about solar net metering.  Here’s the pros and cons on both sides of net metering.  We think the market will all-ways have it’s fits and starts, and the momentous net metering turbulence is an exact indication that times are changing.  For better or worse, the market and its consumers will self-level.

The ruling was favorable towards the Colorado Energy Office, which filed a motion asking that the discussion about net metering be distinguished from the larger debate concerning the standard of renewable energy for Colorado.

The process of net metering allows the owner of a solar system to gain a bill credit for the electricity that is put into the grid. Due to the lowering of utility revenues in which this results, there is now a conflict between the utilities, and the owners and installers of rooftop solar.

“This comes after the decision in Arizona” says the energy consultant and the former commission policy advisor for the state of Arizona Nancy Laplaca. “With the decision to begin a separate docket, there is now hope for more transparent and effective discussions in states that are discussing similar issues”.

The issue was raised to the commission because the major provider of electricity for the state of Colorado, Xcel Energy, proposed an alteration in the net metering process as a portion of its compliance plan for 2014.
The decision of the commission will make sure that the current policies for net metering stay the same until commissioners begin a new document and take the arguments in with more detail.

The director of SolarCity Policy and Electricity Markets Meghan Nutting has proclaimed this a “huge victory” for the distribution of solar, but the commission failed to indicate whether the following docket will be litigated or miscellaneous.  Litigating the process means that it will be done entirely through the legal system, says Nutting, whereas miscellaneous means that it will be more available and inclusive. “78 percent of all Coloradans support solar, and they should be included in this discussion,” she said.

“The incentive towards net metering may be simply too great in relation to the expenditures involved in solar system installation, which results in the company spending too much to bring in new, customer sited solar generation,” said Xcel VP Karen Hyde.

The worry of the utility is that a shift in cost may occur, said Robin Kittel, the Director of Regulatory Administration for Xcel. The reduction of power bills not only brins down the revenues of electricity sales, but also bring lower charges like infrastructure and billing.  This will shift greatest costs to those that don’t own solar.

To support these assertions Xcel submitted a study on the value of solar, which Nutting described as “unvetted.”
The method of avoiding costs that the study described found that the lost revenue to net metering is $0.104 per kilowatt hour, whereas the benefit is $0.046 per kilowatt hour, says Kittel. Xcel is asking for compensation for this differential in costs of $0.058 per kilowatt hour.

The critique of this study from the solar industry found that there were many benefits to solar that remained unspecified or undervalued in the study.  Because of this, the critique stated that “there are net benefits of solar DG towards the Xcel system of $13.6 million per year.”

Due to the conflict between the studies the CEO filed a motion to sever and to ask the commission to begin a process, through miscellaneous docket, that would formulate methodologies for testing the possible benefits, or detriments, of solar, and to judge the impact of DG on the design of rates, and to conduct a definitive analysis of the costs and benefits involved.

It is unclear at what time the commission may come to further decisions about net metering.  Nutting has said that though the commissioners seem in a hurry to take action, rushing is not necessary.

“Net metering is a process that is applied to a small fraction, 18,000 of 1.4 million, of Xcel’s customers,” said Nutting, “by their own judgment, in an analysis that great underestimates the values and benefits of solar, the cost of net metering will be just $1.2 million in 2014. In contrast, Xcel paid out $23.69 million in 2012 for the salaries of their executives alone”.   Xcel was asked to respond to the decision, but the commission but never heard back. “We simply have to be clear about the upcoming proceedings”, said Xcel spokesman Mark Stutz.

 

Article written by Jennifer Coleman of Sun Source Solar Energy Brokers, providing solar brokering, brokerage, and solar energy consulting services in Santa Rosa, Marin, Sonoma, Napa, Solano and San Francisco Counties.  For more information, please visit www.SunSourceSolarBroker.com

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