Nevada’s New Solar Law Is About Much More Than Net Metering

Posted by Laura Arnold  /   June 19, 2017  /   Posted in Net Metering, Uncategorized  /   No Comments

Nevada’s New Solar Law Is About Much More Than Net Metering

Nevada’s New Solar Law Is About Much More Than Net Metering

Nevada Governor Brian Sandoval signed Assembly Bill 405 into law on Thursday to the cheers of solar companies and advocates. AB 405 reinstates net metering for rooftop solar customers in Nevada, after utility regulators eliminated the policy in December 2015, throwing the Silver State’s solar market into disarray.

Because the policy change was applied retroactively, it triggered enormous public outcry, and the steep new fees effectively put a freeze on new rooftop solar installations. Nevada saw a 32 percent decline in solar jobs last year after large residential installers chose to pull out of the state. But with the new law now in place, Tesla, Sunrun and Vivint Solar said they plan to resume sales immediately.

Tesla Chief Technical Officer JB Straubel told reporters yesterday that AB 405 would bring Nevada “thousands of jobs and millions of dollars in positive economic benefit.” Local solar installers, many of whom were forced to make layoffs last year, thanked the governor for bringing jobs back to their communities.

"Sol-Up USA greatly appreciates solar compensation coming back to Las Vegas and Nevada, ending two years of dire straits for the solar industry and its employees,” said Frank Rieger, CEO of the Las Vegas-based solar installation company. “We’re glad that our legislation returned to the path of common sense so that Sol-Up USA can continue to provide the best products and services to its clients in the Las Vegas valley.”

Under the new law, new solar customers will immediately begin to be reimbursed for the excess energy they generate at 95 percent of the retail electricity rate. The credit is scheduled to decline in 7 percent increments for every 80 megawatts of rooftop solar deployed, to a floor of 75 percent of the retail rate. The discounted compensation rates are designed to ensure that solar customers pay their fair share to use the power grid as solar penetration increases, but still leave a lot of room for growth.

The 80-megawatt threshold for each credit tier is significant. In Nevada's biggest year, before the net metering policy changed, the state deployed around 100 megawatts of residential solar. Assuming the market booms again, it will likely still take around four years to get to 75 percent of the retail rate. And even at 75 percent, net metering compensation still looks economically appealing.

While this part of the bill serves to revive the Nevada solar industry -- and is getting a lot of attention as a result -- the net metering piece is not even the most exciting part of AB 405, according to Jon Wellinghoff, former chief policy officer at Tesla/SolarCity, who previously served as chairman of the Federal Energy Regulatory Commission.

The right to self-generate

The passage of AB 405 marks the first time in U.S. history that consumers have been statutorily guaranteed the right to self-generate electricity, said Wellinghoff, who helped craft portions of the bill in his new role as an independent policy consultant. Under Section 24 of the bill, consumers are granted the right to generate their own electricity and offset their own internal usage one-for-one at the full retail rate, in the same way they can install energy efficient light bulbs or appliances and save energy at the retail rate. Whatever energy you no longer take from the grid, you don’t have to pay for.

The right to self-generate is particularly advantageous when solar is combined with energy storage, where all of the generated electricity can be now consumed onsite at a home or business and credited at the consumer’s full retail rate, Wellinghoff said.

“The declining [net metering] rate is ultimately irrelevant when you talk about solar-plus-storage, with the right to self-generate,” he said. “You’ve got to make sure that you have this right to self-generate first; otherwise a utility can reach in behind your meter and say, ‘Oh, no. Wait a minute. We have the right to sell you all of your energy and tell you what rate we're going to pay you for anything you generate.’ Even though you might be trying to use that [generation] to offset your own load.”

There’s long been a fear among distributed solar advocates that a utility could take economic control of a technology that a customer has paid for. In a 2015 paper, Wellinghoff and Steven Weissman argued that Americans have the right to self-generate, while remaining connected to the grid, “in common law, supported by implication in state and federal law.”

“You have a right to grow trees in your backyard. If you want to cut them down and burn firewood, you have the right to do that,” said Wellinghoff. “Ultimately, it's just a fundamental right of consumers to be able to produce something on their property and use it for their own use.”

In energy, if customers can self-generate and store electricity at the retail rate, the net metering debate becomes moot, because nothing is being sent to the grid -- assuming that solar plus energy storage is affordable enough for customers to deploy, which is still a big question mark. Wellinghoff is confident that residential storage will be competitive in six to 18 months. “It’s evolving extremely rapidly,” he said.

No discrimination for solar-plus-storage

The right to self-generation isn’t the only other goodie for the solar industry in AB 405. Section 24 also guarantees the right for customers to interconnect rooftop solar or a solar-plus-storage system in a “timely manner,” with little utility interference, provided all health and safety codes are complied with.

It guarantees that excess energy consumers send to the grid will be “given priority in planning and acquisition of energy resources by an electric utility,” meaning that it cannot be curtailed, said Wellinghoff. Excess customer generation must also always be given a fair price -- based on the discounted credit tiers described above.

Furthermore, AB 405 prohibits rooftop solar and solar-plus-storage customers from being treated as a separate rate class, which is a major win for distributed solar. It means utilities cannot charge any additional fees (either fixed charges or demand charges) that are different from what the broader rate class is paying.

When Nevada regulators eliminated net metering in 2015, they also required that rooftop solar customers pay increasing monthly fixed charges, which erased all of the bill savings these customers expected to see. The language in AB 405 prevents this type of fee from being applied again in future. It’s a significant development, given that utilities across the country have made the case -- successfully in some places -- that solar customers should be treated as a distinct group.

In 2015, Arizona’s Salt River Project implemented a solar-specific demand rate that caused solar customers to pay, on average, an additional $30 per month. A year after it was implemented, customers had learned to live with the new rate, although many saw their savings from solar disappear. Meanwhile, the rate complexity caused the number of new solar customers to plummet. A separate regulatory decision in Arizona late last year established that rooftop solar customers in Arizona Public Service and Tucson Electric Power territory are considered to be in a separate rate class, and are subject to specific fees and rate plans, although policy changes to date have had a limited effect on the market.

In Texas, Oncor is currently seeking to implement a complicated mix of a demand charge and a fixed charge that the industry says would be crippling to the budding rooftop solar sector. These types of charges are now prohibited in Nevada. Legislators did call for opening a regulatory proceeding to design a time-variant rate for energy storage, but it's meant to incentivize storage and be optional.

Now that Nevada has enshrined these rights for solar-plus-storage customers in law, it will be interesting to see if other states decide to follow suit.

“I think it's replicable in any state where there is a big net metering debate going on,” said Wellinghoff. He imagined a settlement scenario where solar-plus-storage customers would continue to pay the fixed fees that all other customers pay and accept a reduction in the net metering credit, in exchange for the right to self-generate and protection from discriminatory fees.

Is the utility death spiral back?

It’s difficult to see regulated utilities across the U.S. signing up to let their retail sales go and have hundreds of thousands of mini power plants crop up on their system. But they may not have a choice if there’s legislative action, like in Nevada, or if they can’t ignore the market forces.

In California, some 80 percent of investor-owned utility customers are expected get their electricity from alternative sources in 2025. And there’s a discussion underway on how to reform the state’s electricity sector as a result.

“The retail distribution utilities are going out of the business,” said Wellinghoff. The poles and wires will soon be what’s left, “and that's fine,” he said. “It's not that there will be a utility death spiral. It's just that they'll have a restructured business.”

Over the past two years, the Nevada solar drama has been presented as a battle between Elon Musk and Warren Buffett -- and their competing views on the future of the energy system. Through Tesla and SolarCity, Musk is looking to build a distributed, low-carbon grid that uses a lot of batteries made at Tesla's Gigafactory near Reno. While Buffett, who owns NV Energy via Berkshire Hathaway, is committed to the centralized, regulated utility business model. In a letter to investors last year, Buffett outlined the risks that distributed energy resources pose to traditional power companies.

With the AB 405 now law, and a move to deregulate the Nevada electricity market in the works, Wellinghoff doesn’t believe there’s much of a battle to be fought anymore.

“It’s really a very false conflict that's being established here, I think. The utilities are fading into wires companies. That's where they're going,” he said. “People like Warren Buffett will decide which businesses they want to get into. If they want to get into the entrepreneurial energy services business, they'll invest in companies like Tesla. If they want to stay in the wires business, they'll continue to invest in companies like NV Energy.”

“Ultimately, it's going to be the choice of any shareholder and investor to decide where they want to invest their money," he said.

Funding Program for Solar Projects at Nonprofit Organizations Serving Low Income Individuals

Posted by Laura Arnold  /   June 16, 2017  /   Posted in Duke Energy, Office of Utility Consumer Counselor (OUCC), solar, Uncategorized  /   No Comments

Prosperity Indiana logo

FOR IMMEDIATE RELEASE

June 15, 2017

Contact:

Allyson Mitchell, amitchell@prosperityindiana.org, (317) 454-8544

 

Prosperity Indiana Launches Funding Program for Solar Projects at Nonprofit Organizations Serving Low Income Individuals

 

Indianapolis, IN - Today (6/15/17), Prosperity Indiana announces the first component of its Solar Uniting Neighbors (SUN) program, which is an effort to fund a total of $350,000 worth of solar projects for community organizations serving low income individuals in Duke Energy Indiana’s electric service territory.

 

The funding portion of this program is provided by a settlement agreement reached between Duke Energy Indiana, Citizens Action Coalition, Save the Valley, Sierra Club, Valley Watch, the Indiana Office of Utility Consumer Counselor, the Duke Industrial Group, and Nucor Steel. Indiana Association for Community Economic Development (IACED), dba Prosperity Indiana, was named in the settlement agreement as the administrator of the funds. Funding is available, via the settlement, for the purchase and installation of solar installations of less than 0.5MW for community, educational, religious, and nonprofit organizations that serve low income individuals in the Duke Energy Indiana service territory.

Organizations interested in applying for funding can download the Request For Project Applications (RFPA) on Prosperity Indiana’s website. Responses are due July 14, 2017 to sun@prosperityindiana.org.

 

Prosperity Indiana and its partners plan to provide access to solar energy technology in Indiana communities at highly competitive prices in a simple, easy process, while providing information and limited funding to qualifying community organizations who serve low income individuals within the Duke Energy Indiana electric service territory. To make the settlement money go further and do more, Prosperity Indiana and its partners plan to negotiate discounted pricing for pre-evaluated solar products and installers through a transparent, competitive purchasing process (using a Request for Contractor Bids) so the community organizations will not have to burden themselves with becoming experts in solar, or lose time getting and evaluating multiple bids. Similar arrangements have resulted in installed costs that are 10 to 20 percent lower than the going market costs, with a much easier and faster process for new solar owners.

 

The SUN Program Administration team also plans to provide resources for technical assistance for the development and deployment of Community Solarize programs, the SUN For All Program aimed at increasing the availability of solar for low income households, and the release of a competitive bidding process to select the solar contractors that will evaluate and install the nonprofit solar projects, all of which will be coming soon. The SUN Program Administration Team includes the expertise of the Solar Indiana Renewable Energy Network (SIREN) and Indiana Solar For All.  Andy Fraizer, Executive Director of Prosperity Indiana, states “The Solar Uniting Neighbors Program has evolved from its creation in 2014 to better serve our members and the low-income residents they serve.”

Prosperity Indiana is the state's leading community economic development organization. Prosperity Indiana supports a network of organizations that builds vital communities and resilient families. The organization advocates for public policies and assists the network in developing comprehensive solutions that engage local leadership to generate private and public investment for Indiana communities.


 

About Indiana Association for Community Economic Development D/B/A Prosperity Indiana

Community economic development is any local action that creates economic opportunities and improves social conditions, particularly for those who are most disadvantaged. Founded in 1986, Prosperity Indiana is a statewide organization that supports a network of organizations that builds vital communities and resilient families. We advocate for public policies and assist the network in developing comprehensive solutions that engage local leadership to generate private and public investment.

IURC Announces Technical Conference on Net Metering Implementation, SEA 309

Posted by Laura Arnold  /   June 16, 2017  /   Posted in 2017 Indiana General Assembly, Indiana Utility Regulatory Commission (IURC), Net Metering, solar, Uncategorized, wind  /   No Comments

logo

IURC to Address Questions Regarding the Implementation of Net Metering Legislation, SEA 309

Requests Comments, Questions for July 20 Technical Conference

FOR IMMEDIATE RELEASE

Indianapolis (June 15, 2017) - Following questions from those involved in the installation of solar panels and other net metering equipment, the Indiana Utility Regulatory Commission (IURC) is hosting a Technical Conference as a forum to address questions and concerns regarding the implementation of the newly-enacted Indiana Code chapter 8-1-40 (Senate Enrolled Act [SEA] 309) on net metering and distributed generation, particularly the Dec. 31, 2017 deadline for the 30-year grandfather provision.

The Technical Conference agenda will be based on questions and comments submitted from the public and those involved in the installation of solar panels and other net metering equipment seeking clarification on the implementation of SEA 309. Any questions or comments must be submitted in writing either via email toURCComments@urc.in.gov or via U.S. mail to General Counsel Beth Heline, Indiana Utility Regulatory Commission, 101 W. Washington Street, Suite 1500 E., Indianapolis, IN 46204 no later than June 28, 2017. All written input will be posted on the IURC’s website.

The Technical Conference will take place on July 20, 2017 from 2:00 to 4:00 p.m. in the IURC judicial courtroom 222, on the mezzanine level of the PNC Center, 101 W. Washington Street, Indianapolis, Indiana 46204. 

Please note: The discussion at the Technical Conference will be only on the short-term implementation of Indiana Code chapter 8-1-40, and not the policy decision made by the Indiana General Assembly to enact this statute.

Individuals interested in attending the Technical Conference or watching the live stream can find more information here.


About the Indiana Utility Regulatory Commission (Commission) The Indiana Utility Regulatory Commission is a fact-finding body that hears evidence in cases filed before it and makes decisions based on the evidence presented in those cases. An advocate of neither the public nor the utilities, the Commission is required by state statute to make decisions that balance the interests of all parties to ensure the utilities provide safe and reliable service at just and reasonable rates.

 

The Commission also serves as a resource to the legislature, executive branch, state agencies, and the public by providing information regarding Indiana’s utilities and the regulatory process. In addition, Commission members and staff are actively involved with regional, national, and federal organizations regarding utility issues affecting Indiana. For more information, please visitwww.in.gov/iurc.

 

Media Contact:

Stephanie Hodgin, (317) 233-4723stehodgin@urc.in.gov

EIA: Wind, solar composed 10% of March generation

Posted by Laura Arnold  /   June 15, 2017  /   Posted in solar, wind  /   No Comments

EIA: Wind, solar composed 10% of March generation

Dive Brief:

  • Renewable generation has cracked a milestone, according to the U.S. Energy Information Administration, with solar and wind providing 10% of the country's generation last month.
  • Those resources will probably provide 10% again for April, EIA said, while making up about 7% of the United States generation in 2016.
  • Wind generation contributed about 400% more than solar, as almost all states have more of the former resource. Of states with significant amounts of renewable energy, only California and Arizona had more solar generation than wind in 2016.

Dive Insight:

The milestone is seasonal, but non-hydro renewables have cracked 10% of the United States generation. While the double-digit portion will likely wane as demand ramps up in the hot summer months, the achievement is a reminder of the rapid growth of green energy.

Wind-powered generating units in Texas and Oklahoma often have their highest output in spring months, while wind-powered generators in California are more likely to have their highest output in summer months.
Monthly solar output is highest in the summer months, regardless of location, because of the greater number of daylight hours.

Source: U.S. Energy Information Administration

In 2016, Texas accounted for the largest total amount of non-hydro renewable electricity generation—but almost all of it came from wind. Texas generates more wind energy than any other state, EIA noted, but as a share of the state’s total electricity generation, wind and solar output was highest in Iowa (37% of 2016 generation).

Wind and solar resources provided at least 20% of electricity in six other states last year.

While the United States is not likely to reach 10% renewables on an annual basis yet, the country is getting close. According to EIA's most recent Short-Term Energy Outlook, non-hydropower renewables are forecast to provide 9% of electricity generation in 2017 and nearly 10% in 2018.

EIA said it expects coal's generation share to rise from 30% in 2016 to 31% in 2017 and 2018. Natural gas' share will decline from 34% in 2016, to less than 32% in 2017 and 2018, "as a result of higher expected natural gas prices."

The agency said generation share of hydropower is forecast to be nearly 8% in 2017 and 7% in 2018. The nuclear share of generation remains just under 20% in both 2017 and 2018.

Recommended Reading:

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Fossil fuel interests seek to kneecap NC’s growing solar industry

Posted by Laura Arnold  /   June 13, 2017  /   Posted in Duke Energy, Uncategorized  /   No Comments

Fossil fuel interests seek to kneecap North Carolina’s growing solar industry

Solar companies created thousands of jobs on the back of a decades-old law. Now, the state’s utility wants to rewrite it.

By Molly Taft, Laura A. Shepard, and Monika Sharma

Alongside Highway 401 in northern North Carolina is a 21st-century twist on a classic rural scene. A few miles outside of Roxboro, sheep graze among 5,000 panels at the Person County Solar Park, keeping the grass tidy on the rural installation.

Fields like these aren’t just scenic settings for roadtripping tourists to snap photos. Solar has “been some of the only economic development to happen in rural North Carolina in the last 30 years,” explained Richard Harkrader, CEO of a local solar company.

For companies like Harkrader’s Carolina Solar Energy, the Tar Heel State is a great place to do business. Abundant sunshine, ample support for clean energy, and smart public policy have spurred the rapid growth of solar. Today, North Carolina boasts more solar capacity than every state except California. In the first quarter of 2017, North Carolina added more solar than any other state, and its solar industry employs more people than Wake Forest University.

North Carolina solar jobs by county. CREDIT: Solar Foundation

But, despite — or perhaps because of — its success, solar is facing a battle in the state.

North Carolina solar companies owe much of their success to an obscure federal law passed in the wake of the 1973 OPEC oil crisis, when shortages produced lines around the block at gas stations and tipped the U.S. economy into recession. At that time, Americans got about one-sixth of their electrical power from burning petroleum, much of it imported from the Middle East. In a bid for greater energy independence, lawmakers approved The Public Utility Regulatory Policy of 1978, known as PURPA.

Among other things, PURPA required utilities to buy renewable power from independent producers if it cost no more than electricity from the conventional power plants owned by the utility. The aim was to source more power from small renewable facilities, like the Person County Solar Park, easing demand for electricity from coal, gas, and — in particular — petroleum-fired power plants.

In the 1970s, PURPA didn’t do much for renewables. In the era of bellbottoms and disco, cheap solar power was a distant dream, and the fledgling solar industry was peddling clunky technology at sky-high prices. But solar has taken off over the past decade, and PURPA has become far more important — especially in North Carolina. Some 92 percent of the state’s solar projects have been supported by the decades-old law.

While PURPA is a federal law, state regulators have a lot of wiggle room when it comes to implementation. North Carolina regulators have historically required longer contracts from utilities, making solar an especially attractive option. That’s because while solar poses high upfront costs, it pays for itself over the long term through savings on fuel. With conventional power plants, by contrast, operators continue to pay for coal or gas over the life of the plant.

But just when PURPA is beginning to do what its drafters intended, utilities in North Carolina want to hobble the policy.

Utilities make money in part by owning and operating power plants. But when utilities are required to source power from independently owned solar arrays, their own coal- and gas-fired power plants generate less electricity — and less revenue. Moreover, the need for additional capacity is shrinking. North Carolina’s electricity demand has flattened in recent years.

Duke Energy, the largest utility in North Carolina, is now leading the charge against PURPA. Duke currently is required to buy power from any cost-competitive small-scale solar installation. The utility wants to change the policy so that it would solicit bids to build new solar arrays only when it needs additional generating capacity.

Duke Energy’s solar farm in Conetoe, North Carolina. CREDIT: Duke Energy

Duke also wants to shorten power purchase agreements so that the company isn’t locked into long-term solar power agreements if the price of coal or gas falls, or if a new solar installation proves cheaper.

“Their argument is that renewables will be cheaper than they are today, so [Duke] shouldn’t have to pay” for power from existing solar installations under PURPA, said Chris Carmody, executive director of North Carolina Clean Energy Business Alliance. “But they’ll turn around and establish a 10-year contract to buy natural gas, which is volatile and has heavy fluctuation. Utility-scale solar has no fluctuation — once the project is built, that’s it.”

Duke also claims that solar farms are flooding the grid with power on sunny days. This forces the utility to ramp down and then ramp up coal- and gas-fired power plants, which is less efficient than letting generators run at a constant rate. Complicating matters, developers are mostly building solar farms in the rural, eastern part of the state, far from hydroelectric storage systems that could bank surplus solar power.

But renewable-energy advocates say this isn’t a problem with solar. It’s a problem with the aging power grid — some places haven’t seen an update in more than 50 years. North Carolina, they contend, needs better transmission lines and more energy storage.

Solar companies are hopeful they can reach an agreement with utilities. Steve Levitas, a lawyer for Cypress Creek, said that the solar industry “has been trying to work toward consensus” with Duke, and is open to new policies that allow solar to continue its impressive growth.

Last week, the state House passed a sweeping, bipartisan, Duke-backed energy bill that would curtail PURPA while creating new incentives for solar. The bill would shorten contracts for solar installations, cap the volume of renewable energy that utilities are required to buy from third parties, and create a competitive bidding process for new solar projects. At the same time, the bill allows ratepayers to buy power directly from community solar arrays, and it would establish a rebate program for rooftop solar, among other changes. On balance, the bill appears to favor the utility. Solar firms have largely kept quiet on the measure.

Solar companies say they are accustomed to the sweeping changes in public policy. Harkrader said that, for small firms, “new challenges and new markets” are a normal part of the equation. “We call it the solar coaster.”


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