Vt. regulators to consider lower net metering rate for solar owners

Published: Apr. 13, 2022 at 4:48 PM EDT
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BURLINGTON, Vt. (WCAX) - Vermont energy regulators are considering changes to the state’s net metering program, which could result in owners of residential solar projects receiving less compensation for the power they feed back into the grid.

Owners of solar panels often get a credit on their energy bills for the excess electricity they produce that is then sent back to their utility.

“So at night, rainy days -- spitting like now -- or the winter days we just came out of, you can use those electric credits to offset your electric bill,” said Paul Lesure with Green Mountain Solar, a South Burlington solar company.

Those credits vary based on the size, type, and location of the solar array. Every two years, energy regulators re-evaluate net-metering rates to make sure they’re in line with power costs. It’s a chance for state officials to evaluate the program’s costs and benefits. “Affordability, equitable participation in the state’s energy transition, least-cost planning, greenhouse gas emissions, and the economic vitality of the state,” said T.J. Poor with the Vermont Department of Public Service.

Now, the department is recommending a decrease in net-metered compensation rates by 1-cent per kilowatt-hour.

Lesure worries that if the rates are lowered, it will disincentivize homeowners and businesses from switching to solar. “These are individual homeowners and businesses that are investing their money in the future of the grid. They should be able to get a little return on investment. If we take away net metering, who’s going to make those investments?” Lesure said.

Peter Sterling with the group Renewable Energy Vermont, says the Public Utility Commission should actually be increasing the compensation rate for solar owners. “We need to be doing more to make sure our electricity comes from as clean of sources as possible and that includes more in-state generation, more Vermonters being able to put solar panels on their homes and properties,” he said. Sterling says a decreased net-metering rate would result in extending the payback period on many solar projects.

But state officials say net-metering also creates a cost shift for Vermonters without solar panels. “That $40 million a year goes from the participants to non-participants, and those non-participants don’t have a choice of whether they want to incur those costs or not,” Poor said.

Poor points to a 2020 study that shows 40% of Vermont households with the lowest incomes were responsible for only 10% of solar adoption. According to the study, most of Vermont’s solar projects were in households earning more than 120% of the area median income.

He also says the department’s proposal represents a balance in supporting the solar industry and considering other investments that would have a bigger impact on reducing our carbon emissions such as incentivizing EVs and efficient heating systems.

The PUC is slated to make a decision on lowering the net-metering rates later this summer.

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