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January 20, 2014

Lawmakers Advance 'Solar Standoff' Solution

SolarWhen some Vermont utilities started rejecting proposed home-grown solar installations last year, it looked like a plan to increase solar production in Vermont had been too successful.

Utilities were bumping up against a cap on so-called net-metered projects far faster than the lawmakers who'd designed the rules ever anticipated. Those utilities said it was time to put on the brakes; solar energy advocates argued that doing so would cripple solar development just as the industry was hitting its stride in Vermont. 

Now a plan to breakup that solar standoff is gaining traction in Montpelier. The House Natural Resources and Energy Committee advanced legislation on Friday that would relax the cap on homemade power to better match the demand for residential solar generation. The bill will head to the full House on Thursday. 

The bill, championed by committee chair Tony Klein (D-East Montpelier) takes a two-pronged approach. First, it preserves the current net-metering program for the next two and a half years, while upping the current cap on net-metering from 4 to 15 percent of a utility's peak energy-generating capacity.

Then the bill paves the way for rejiggering net metering in 2017, at the same time that federal solar tax credits are set to expire. 

Net-metered projects allow utility customers to generate their own power via small-scale energy installations. Vermont has encouraged solar production by requiring utilities to credit customers for solar energy they produce themselves at 20 cents per kilowatt hour — which means anyone who produces enough power can eliminate his or her monthly bill for electricity drawn from other sources. 

The incentives clearly worked — so well, in fact, that three Vermont utilities last year stopped approving net-metered projects because they'd reached the 4-percent cap. 

One of the utilities in question — Vermont Electric Coop — said it was time to reconsider the net-metering policy. Coop CEO Dave Hallquist told Seven Days in October that the sweet rate paid to solar net-metering customers was shifting costs onto the rest of his utility's ratepayers. 

But solar advocates sounded the alarm. "We should give the solar entrepreneurs in Vermont some space on the runway to take off," said Ben Walsh, a clean-energy advocate with the Vermont Public Interest Research Group. “We don’t think we’re anywhere near the point where we need to be changing course."

Klein tipped his hat to Department of Public Service Deputy Commissioner Darren Springer, who Klein says was instrumental in bringing the players to the table in advance of the legislative session. That meant pushing utilities, solar companies and public advocacy groups to try to craft a solution to the solar standoff. 

Klein says the two and a half year reprieve hits two goals. "That gives the solar industry enough time to plan for their future and adjust for any possible changes, without hopefully any interruptions in growth," he says. As for the utilities? "The truth of the matter is, they're more concerned about the long term," says Klein. He thinks staying the course on net metering for another two and a half years won't unduly burden utilities. 

Hallquist, at VEC, says the bill represents a compromise, and while no one is "completely happy" with the outcome, he says his cooperative is supportive. He's especially glad that the net-metering program will head to the Public Service Board for a "deep dive" into the costs and benefits moving forward. 

"The compromise was worked out in a really healthy spirit," says Hallquist. 

Illustration by Tim Newcomb.


Illustration by Tim Newcomb.

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