September 18, 2014: Belmont Citizen-Herald
Belmont Light has recently proposed a new pricing scheme for electricity that is much less favorable to residents who install solar panels on their homes. Solar advocates have objected, saying the new rate will impede continuing solar development in our community.
At issue is a process called “net metering,” a process Belmont Light proposes to eliminate. Under net metering, residents don’t pay Belmont Light for the electricity they receive from solar panels they have installed on their own rooftops. Belmont Light, the argument goes, should not be allowed to charge homeowners for electricity they produce for themselves.
If you plant your own garden, the solar advocates reason, Wilson’s Farm can’t continue to charge you for the tomatoes that you used to buy, but now grow yourself.
Belmont’s solar advocates, however, want an even more expansive net metering system. Under their proposal, if a homeowner’s solar panels produce more electricity than needed for his/her own use, the owner would sell that extra electricity back to Belmont Light and be paid at the full retail rate. Belmont Light rightfully says “no.” At that point, the utility reasons, the solar owner is just another wholesale supplier of electricity and should be paid the same wholesale price as any other power provider.
Belmont Light is also worried about covering its costs. Some costs, it notes, are incurred no matter how much electricity a customer uses. Called “fixed costs,” these costs are included in the rates charged to all customers. Because solar owners are now buying less electricity from the utility, since they are getting some of their electricity from their own solar panels, Belmont Light says those owners no longer pay their fair share of the utility’s fixed costs. Belmont Light proposes to charge solar owners a special rate to make-up for that lost revenue.
That argument, however, doesn’t completely hold water. My wife and I bought a new energy efficient refrigerator this past spring. Our new fridge uses one-third the electricity that our old refrigerator did, and we receive a correspondingly lower bill. Belmont Light does not charge us for the electricity that we no longer use to ensure that we continue to pay “our share” of fixed costs.
The concern about fixed costs is legitimate. But if Belmont Light is worried about fully recovering its fixed costs, it should respond to the actions taken by all customers, not simply to those actions taken by owners of solar systems.
The solar advocates argue finally that since solar energy is a clean energy source, they should be paid for reducing the air pollution that is otherwise produced by power plants. They’re right. Everyone who uses electricity contributes to causing air pollution; everyone should pay to reduce that pollution. That’s not a solar subsidy. It’s cleaning up your own mess.
That doesn’t justify net metering though. The dollar value of the environmental benefits produced by solar energy is roughly one-third the full retail price of electricity. Solar owners should be fairly, but not excessively, compensated for the environmental benefits they produce.
An alternative exists that addresses the concerns of both sides of Belmont’s solar debate. Called a Value of Solar Tariff (VOST), this approach pays solar owners a credit for the environmental benefits they produce, in addition to paying the wholesale price of electricity. Except for this credit, solar owners would continue to pay the same electric rates that everyone else pays.
This approach has been endorsed by many solar advocacy and consumer groups nationwide as a sound middle ground to support solar, while also protecting ratepayers. It should be pursued by Belmont Light.