Access to solar at risk

The solar energy rules are about to change – much sooner than previously expected. We’ve put together this brief “Solar 101: What you need to know IMMEDIATELY” so as not to miss this brief window to save thousands of dollars in solar incentives. A fuller explanation is below the bullet points.

Background

  • The Federal government currently provides a 30% federal tax credit for residential solar. This credit expires at the end of next year.
  • Vermont provides a “solar adder” which currently increases the value of residential solar production by 25 to 35%, depending on the installation.

What’s Changing

  • The rules governing solar energy in Vermont are now expected to change any day, making residential solar significantly less valuable for Vermonters who have yet to go solar.
  • Green Mountain Power is just about to hit the cap, set by the state of Vermont, of the amount of net metering GMP is required to accept.
  • GMP is expected to then reset the rules – it may allow additional residential (on-site) solar under its net-metering agreement, but it’s likely the 25-35% solar adder GMP currently credits customers will be impacted – reduced or perhaps eliminated.
  • GMP will likely close the door on new community (off-site) solar fields. Fortunately, Solaflect  has reserved some fields “under the cap” for future development.

What this Means for Families Considering Solar

  • Since GMP will likely hit its legal cap within days, if a family is interested in residential (on-site) solar in 2016 (before the federal tax credit expires 12/31/16) they need to talk with Solaflect immediately so we can apply for permitting before GMP hits its cap.
  • As soon as GMP hits its cap, it will likely reduce or eliminate this 25% adder – meaning the effective cost of solar might go up by as much as 25%.
  • Time is also running out on getting a 30% federal tax credit on your 2015 taxes – a minimum $5,700 tax break for Solaflect customers.

Why Solaflect?

Long Story Short

  • If a Vermont family wants to go solar, it’s critical to talk to us IMMEDIATELY!

A Wonkier Version of the Situation

VT Digger reports that Green Mountain Power is on the verge of reaching the legal cap for net metering in the utility’s territory:

The state’s largest utility expects to soon reach the limit on how much net-metered power it has to buy from Vermonters who build their own renewable energy projects.

Green Mountain Power says it has 52 megawatts of net-metered solar already built in its territory and has another 54 megawatts of net-metered solar in its queue. That amount of solar will put the company over its net-metering cap either in November or December, according to spokesperson Kristin Carlson.

Vermont law requires the state’s utilities to accept net metering production up to a certain capacity. The capacity limit is 15% of the utility’s peak demand. After a utility reaches that threshold, it no longer needs to accept any new net metering connections. The law allows it to voluntarily accept new connections that are small in scale. If the utility wants to accept new connections that are larger than 15 kW each, it must receive permission from the state’s Public Service Board.

The VT Digger article reports that GMP plans to continue accepting additional small-scale net metering connections. What is not explained is whether GMP will continue to credit these new connections at the same rates provided to those that connected below the capacity limit. Call this “Issue 1.”

The article also implies that GMP will not seek permission to accept larger connections. If that’s true, then community solar will come to a screeching halt. The roughly three-quarters of households whose homes are not well suited to solar? Out of luck. Call this “Issue 2.”

Issue 1

People whose solar arrays have been permitted below the cap receive two kinds of credit on their electric bills. First, they receive “net metering” credit. Second, and in addition, they receive the “solar adder.” (Full explanation of net metering here, and of the solar adder here.) The short summary is that net metering alone provides credit worth approximately 15 cents per kWh of solar generated, while the solar adder provides credit of either 5.3 cents per kWh (for smaller solar arrays) or 4.3 cents per kWh (for community scale arrays).

Doing the math shows that the solar adder is increasing the value of each solar kWh by around 25 to 35 percent.

It is unclear if GMP will continue to provide the solar adder for new systems that are permitted after the cap is passed. If the adder is reduced or eliminated for these solar arrays, that is analogous to increasing the cost of going solar. For example, if you needed 4 kW of solar capacity to cover your electric bill with the solar adder included, you would need 5 to 6 kW of capacity to cover your bill without the adder, significantly increasing the cost you face to achieve the same benefit.

If you are a GMP customer and have been thinking of going solar with a PV Tracker at your home, contact us as soon as possible so that we can help get your permitting application filed right away.

(It is important to note that anyone whose solar array has been or is installed before GMP reaches the cap will continue to get the solar adder already in effect for them. GMP’s reaching of the cap has no effect on the credit provided to those whose solar is already in place.)

Issue 2

Those who have good yards or nearby fields with open views of the sky should be concerned that they may soon miss out on a meaningful chunk of the value that solar currently offers. That is a minority of people.

Most people live in homes that are not well suited to having solar installed on-site. Community solar has been a revolutionary innovation in the world of renewable energy, opening up the benefits of net metering to many more people.

If GMP restricts the permitting of new community scale solar projects once it reaches the net metering cap this month or next, huge numbers of Vermonters will not merely face a reduction in the amount of net metering credit they can get on their electric bills. They will be shut out of net metering altogether.

The long term solution is for Vermont’s laws to be revised so that the benefits of solar energy are available to as many as possible.

The short term solution for those of you who have put solar low on your priority list is to jump it right up to the top. The latest Solaflect Community Solar Park is nearing completion and still has a small number of Trackers available.

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