New Partnership Proposes Changing Solar Net Metering Compensation Model

Apr 21, 2016

There’s a new partnership weighing in with a proposal for changing the compensation model for solar net metering. It includes a number of New York utilities and national solar companies.

The proposal is in response to a New York State Public Service Commission December 2015 invitation for ideas on valuing what are called distributed energy resources which, predominantly, are renewable energy resources. So far, the PSC has received a number of proposals as well as comments. It’s all part of Governor Andrew Cuomo’s Reforming the Energy Vision, or REV, to address climate change, in part, by stimulating investment in clean technologies like solar, wind, and energy efficiency and generating 50 percent of the state's electricity needs from renewables by 2030. James Denn is PSC spokesman.

“The end result [is] that this particular effort will result in a more precise method for valuing distributed energy resources, the benefits and costs, as well as suggesting possible interim alternatives to net metering as a methodology to more precisely value these resources and potentially create new rate designs and valuation mechanisms that can be used as we develop REV initiatives into the future,” Denn says.

One of the proposals is from the newly-formed Solar Progress Partnership, which consists of three large national solar installation companies and six New York utilities. The partnership proposes amending the net metering model for solar. Net metering allows solar users to receive credit for delivering excess power back to the grid at retail rates. John Maserjian is spokesman for Poughkeepsie-based Central Hudson Gas & Electric Corporation, which is part of the partnership. He says the increase in solar projects necessitates addressing customer cost-sharing issues.

“And, because of net metering, we’re starting to see a cost shift,” says Maserjian. “In other words, customers who net meter are receiving a benefit, but that benefit is being paid for by all other customers.”

The Solar Progress Partnership’s filing recommends collecting a payment from solar developers for community and remote solar projects connected to the grid, while preserving utility bill savings for their customers. Maserjian says solar developers would gain greater certainty over their ability to connect customers to their projects, and electric utilities would have the financial resources needed to maintain a reliable grid. Jennifer Metzger is with Citizens for Local Power in Ulster County.

“One of my biggest concerns is they’re looking to charge developers of community renewable projects. And a huge concern we have is that this will make locally-owned community solar projects, shared-renewable projects basically not possible for many communities,” says Metzger. “Certainly these large solar developers could absorb these kinds of costs but not smaller developers and not the kind of community-ownership models that we’re looking to see flourish in New York.”

The PSC’s Denn points out that utilities and solar companies working together, like the Solar Progress Partnership, is a positive.

“And the level of collaboration and partnership amongst utility and  renewable energy stakeholders stands in contrast to what is occurring in some other states,” says Denn.

Solar Progress Partnership’s proposal also recommends a transition plan for net-metered customers with rooftop solar panels by continuing the current met metering model until 2020.  In addition, Maserjian says:

“For the larger projects, we’re encouraging the Public Service Commission to perhaps take a more immediate step or immediate action, and those involve developer contributions to the maintenance of the utility system while still providing the individual customers with the same net metering benefits they see today.”

Meanwhile, Governor Cuomo Thursday announced $150 million in funding to support large-scale renewable energy projects across the state. This funding will facilitate public-private partnerships to advance the REV strategy.