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Road to renewable energy gets bumpy as net metering program reaches peak capacity limit

-By Johanna Miller

Net metering is one of Vermont’s most successful renewable energy programs. It allows Vermonters interested in generating their own renewable power — most often solar — to install a system on their home or property and offset their utility bills with the electricity produced. When the home system generates more electricity than the customer needs, the excess is fed back into the grid, and the customer receives a time-limited credit from the utility.

This program helps customers minimize their consumption of fossil fuels and stabilize their long-term electricity costs. The utility benefits in that it can use solar customers’ valuable excess power on hot, sunny days to offset the high price of buying peak power off the market.

Net metering in Vermont has expanded dramatically since it started in 1998, as public interest in distributed, renewable energy has grown.

In Waterbury and Duxbury this past year, for example, the number of homes with installed photovoltaic systems doubled in less than 12 months. Thanks to net metering and support from the local energy committee, about 100 homes there are now powered largely by the sun.

These and many other success stories have made Vermont’s net metering program one of the strongest in the country — until now.

In 2011 the Legislature set a renewable energy peak capacity limit of 4 percent, which limits how much on-site renewable energy must be accepted by the utility to which the system is connected.

Several utilities in Vermont have now met or are rapidly closing in on the state-mandated 4 percent cap. At that point they are no longer required by state law to allow their customers to tie into the grid and net meter. This means that some Vermonters who want to go solar, depending on where they live, can’t or soon might not be able to.

The net metering cap has many homeowners and renewable energy developers worried about their ability to continue to harness power from the sun, wind or water. It’s a problem that state leaders are working to fix.

Since July, the Public Service Department has been convening developers, utilities and renewable energy advocates to find a resolution that works for various interests but keeps the program going.

“As the state agency responsible for representing the public interest in utility regulation, we’ve taken a hard look at the different costs and benefits of net metering,” says Public Service Department Deputy Commissioner Darren Springer.

Springer explains, “We did a rigorous analysis released in January that found, on a statewide basis, solar net metering provides a net benefit for Vermonters. Solar helps meet peak load, cuts our reliance on fossil fuels, and avoids the need for costly transmission projects. Those benefits, along with the job creation and greenhouse gas reduction benefits, are why we are working with key stakeholders to find a solution. We believe that, no matter what utility territory you live in, you should be able to put solar on your roof or go renewable.”

But now that option is off the table in some parts of the state. The Vermont Electric Cooperative — the state’s second largest utility — met the cap and stopped taking net metering projects in July, leaving many solar-interested customers in the lurch.

To resurrect its program in a way that addresses its concerns about cross-subsidization and incentives, VEC recently petitioned the Public Service Board on its proposed solution.

“As the competitive marketplace drives the cost of solar down, we believe adoption of net metering will continue to increase without the need for incentives,” said VEC CEO David Hallquist in a recent news release.

VEC’s request to the PSB was for a 12.5-cent/kilowatt-hour rate for net-metered power. That rate — far below its retail rates — is a radically different and, some argue, woefully inadequate solution.

“VEC’s proposal drastically undervalues the full benefits of renewable net metering, including its recent role in deferring one transmission upgrade representing a savings of $250 million to all Vermonters,” says Renewable Energy Vermont Executive Director Gabrielle Stebbins. “Their proposal is assured to stop net metering by customers of all types — farmers, small businesses and homeowners — in the VEC service territory.”

Jeff Forward, chair of the Richmond Climate Action Committee, lives in VEC territory. He’s has had to tell several neighbors that their hopes to install solar on their property — as he has done — isn’t possible right now.

“This program made it possible for me to put together a net-metered solar project that meets the electricity needs of my family and five other neighboring households,” explains Forward. “The fact that hundreds of families across Vermont now can’t do the same is a huge disappointment.”

The net-metering impasse also has potential economic impacts. The program has helped spur the creation of many jobs. The Waterbury-based solar company, SunCommon, which started in 2012, employs more than 60 Vermonters directly and indirectly. The business has also helped more than 600 families go solar.

“We are helping keep Vermont dollars in state, putting Vermonters to work — instead of shipping money out of state to pay for dirty energy,” says James Moore, SunCommon’s co-founder.  “We feel confident that the Legislature will address this. If they don’t, it could be an end to the solar industry in Vermont.”

Legislative leaders are well aware that net metering needs a fix.

Representative Tony Klein, chairman of the House Natural Resources and Energy Committee, says, “With companies offering options with no money down and monthly payments less or equal to a homeowner’s monthly electric bill, these systems are now in reach of every household. Net metering its working, and it’s growing because it’s what consumers want.”

Klein also observes, “We realize that there are issues that need to be addressed, but I’m convinced there are solutions that will ensure we continue this successful program.”

Johanna Miller, energy program director at the Vermont Natural Resources Council, can be reached at jmiller@vnrc.org.