Net Metering in Maine

[Gwgan]

In 2014 Maine’s largest utility was not successfull in adding a grid-tie fee and increasing distribution costs and since then a study was commissioned, reported, and evaluated by the legeslature and now a bill is under consideration to end Net Metering and promote solar growth.

bill summary: http://maine.gov/meopa/about/reports/2016-02-24%20Final%20Draft%20Solar%20Bill.pdf
bill: http://maine.gov/meopa/about/reports/2016-2-24%20Solar%20Legislation%20Overview.pdf

the facts: Maine lawmakers propose groundbreaking way out of net metering wars | Utility Dive

local solar installer’s take (pro): About Maine’s “First in the Nationâ€￾ NeXt Metering Policy Proposal

The internet has pro and con opinions but this has been a consensus effort and so seems inevitable at this point.

 

[TheTalkingMule]

Interesting stuff. Sounds like a German-style step-down feed in tariff, no?

And it sounds as if they want to start around $.20/kWh rather than the NEM rate of ~$.13/kWh.

In a declining block program the price the Standard Buyer pays for residential solar would be pre-established by the commission. It might be the VOS price of $0.33 per kWh, or the direct benefit to customer price of $0.20 per kWh, or the retail rate of electricity, or the utility’s avoided cost for other generation.

When the state achieves a commission pre-designated block of capacity, the price the Standard Buyer pays new solar owners will drop to a lower level on the assumption the higher capacity means solar needs less of an incentive and economies of scale should be at work to make unsubsidized solar more affordable.

I like that utilities are rapidly moving from a strategy of blocking solar to forcing utility-scale solar on markets while limiting residential. They're clearly scared and creating a "rush", which benefits the industry as a whole. Ultimately the people are the ones who will wield the power here and it'll be nice to have all that extra low-cost solar baseload around to serve our needs.

 

[Gwgan]

The white paper on which this proposal is based recommends starting at $0.20/kWh and decreasing in a stepwise function. Full consumption delivery and supply costs are incurred and the credit is applied to the sum (overall rate ~0.12/kWh) but net metering is based only on the supply costs (~0.065/kWh); not exactly an apples to apples comparison. The recommendation is from Strategen which is made up of people in the business from California and Arizona.
http://strategen.com/storagealliance/sites/default/files/White%20Papers/Market-based_Aggregation_Credit.pdf
I modeled some numbers this morning and the seller credit does benefit retail producers more than the current net metering arrangement at today's rates as long as the credit rate exceeds the standard offer.

 

[Robert.Boston]

The Public Advocate's spreadsheet calculating costs and benefits is available at the Maine PUC website, item #95. I worked a lot on this case and even on this spreadsheet.

It's important to note that this feed-in tariff for residential and small businesses (incl. small community solar) is part of a bigger package that brings in competitive procurement for other classes of solar, with a target procurement of 255 MW over five years. This would be an enormous increase over the ~15 MW currently installed state-wide. Net metering poorly serves the needs of non-residential customers, and there are a lot of businesses in Maine who would install solar if the economics made any sense.

The challenge now will be to get this through the House and Senate with 2/3 majorities, as its certain that Gov. LePage will veto--notwithstanding his own appointee's (the Public Advocate) conclusion that this package will lower energy costs overall. The House shouldn't be too hard; the Senate, a definite maybe.

 

[Gwgan]

Thanks Robert, I thought you may have had a hand in this but could not write about it, at least not yet, when you did not post about the news right away.
Question: after the solar credit meets or exceeded by the standard offer, how does one retain value is a solar farm share?

 

[Robert.Boston]

Thanks Robert, I thought you may have had a hand in this but could not write about it, at least not yet, when you did not post about the news right away.
Question: after the solar credit meets or exceeded by the standard offer, how does one retain value is a solar farm share?

I'm puzzled by the question. If/when the Standard Offer rate goes up, the value of not buying power at that rate goes up. The value of your net injections (measured hourly) is fixed at the yet-to-be-determined residential solar rate.

Compared to net metering, this proposal offers less upside. Conversely, it offers higher certainty by putting a floor on the rates. It also would settle the uncertainty about whether net metering will be allowed to continue, now that CMP has reached the 1% cap. Given how much CMP and the Governor hate net metering, I believe that the current LePage-appointed commission would likely repeal net metering entirely, with no reasonable replacement. This bill would ensure a path forward for solar in the state.

The hearing has been set for next Wednesday:

We’ve received confirmation that the solar public hearing will be on Wednesday, March 16 at 1:00 p.m. in the Energy Committee room (room 211 in the Cross Office Building, next to the State House).

Below is the email that just went out to NRCM supporters inviting them to solar day & the public hearing on Wednesday, March 16. Please feel free to use any of this language as you reach out to your networks.

Solar Day/public hearing: Wednesday, March 16
Solar Day includes citizen lobbying in the morning, pizza lunch, and the public hearing in the afternoon.

• You can find the schedule and RSVP form for Solar Day here: www.nrcm.kintera.org/SolarDay
• For folks who RSVP, we will have packets prepared with talking points and information on their legislators to help with citizen lobbying efforts. I encourage all of you to join us to lobby in the morning, and am happy to prepare packets for you, too.
• There are enough Solar For ME tee-shirts for everyone, so hopefully we will make a nice bright yellow solar spill over at the State House in the morning. I will bring extra tee-shirts to the committee room before 1pm for anyone who just comes to the hearing.

 

[TheTalkingMule]

This sounds amazing.

Step-down feed-ins cause major install rushes as there's an urgency to install before big drops, but still the certainty of payment. Germany installed 2.1GW in December 2011 before they took a big chop to their feed-in-tariff in 2012.

If this energy bill passes next week, we'd essentially be looking at the same scenario at varying stages for every state in the Union.

 

[mspohr]

Interesting article about Maine's governor LePage who seems to be focused on single-handedly stopping solar in Maine. From the article it looks like most of the legislature (and even the utilities) are open to solar but the governor is sandbagging everyone.
Maines Governor Is Keeping The State From Adding Hundreds Of Solar Jobs | ThinkProgress

 

[Gwgan]

I'm puzzled by the question. If/when the Standard Offer rate goes up, the value of not buying power at that rate goes up. The value of your net injections (measured hourly) is fixed at the yet-to-be-determined residential solar rate

Maybe I don't fully understand but the way I read it a homeowner without onsite solar would pay standard offer for power consumed from the grid regardless of their relationship with a solar farm but over time the solar credit they would receive from at farm share would decrease.

 

[Robert.Boston]

Maybe I don't fully understand but the way I read it a homeowner without onsite solar would pay standard offer for power consumed from the grid regardless of their relationship with a solar farm but over time the solar credit they would receive from at farm share would decrease.

Ah -- I see. You're partially right and partially wrong.

The tariff for any particular installation is fixed for 20 years, based on when it is built (for on-site installs, for or community solar projects under 250 kW) or its bid in an auction (for grid-scale, large commercial, and community solar >= 250 kW). So, the financial payments from a project are known when the project is built. This certainty enables project financing.

On the other hand, under this program, solar installs are not a perfect hedge against changes in retail rates (=wires charges + power rate). Off-site solar, such as community solar farms, provides no hedge at all. On-site solar provides a partial hedge, to the extent that contemporaneous (in-hour) generation offsets consumption. This last point was something we fought hard for, btw—more than a few parties wanted to require separate meters for on-site installs.

Another subtle point about this program is that, with sufficient solar, you really can drive your utility bill to zero, unlike net metering, which only offsets the portions of the bill linked to kWhs. This is hugely important to businesses, which typically have a big chunk of their power bills either as a flat service charge or a demand charge.

In my view, net metering is a dead end for a number of reasons. Under this bill, rooftop solar will be paid a figure that strikes a balance between the competitive cost of installing it and the total value created by distributed solar. The per-kWh retail rate *happens* to be similar, but only for residential customers and only under the current form of the tariff. Just a few years ago, CMP requested revised residential rates that would have increased fixed charges and lowered per-kWh charges; if the PUC were to approve such a rate in the future, it would kill solar. We're far better off having a clear, compensatory feed-in tariff that is outside of the control of the utilities to modify through a rate case.

BTW, the full bill text is on the Legislature's website now.

 

[beeeerock]

In my view, net metering is a dead end for a number of reasons.

I don't disagree, and wonder how accurate my thinking is/was around the installation of my own smaller grid-tie system.

• I installed with a net metering arrangement with BC Hydro. Power is about 8 cents to a threshold, then around 12 cents a kWh above that.
• I have a geo-exchange system that looks after the house winter and summer, so electricity is my primary energy source.
• I'm always in the 12 cent zone for each billing cycle, hence my net metering benefits are also in the 12 cent range.
• My solar system payback is understandably long with relatively cheap power and no time of use adjustments (so far). I did it to prove a point, not to save huge amounts of money.
• I don't expect that the net metering arrangement will continue forever, or even until I break even.
• I think power is cheap here and as the grids become more integrated, the local price will likely go up to reflect something closer to an 'average' across the larger grid.
• If/when net metering is discontinued, I'm hoping that a new arrangement like you describe will be more of the norm than the exception (the anti-solar protectionist silliness will have been exhausted). With increased prices in my area, a new arrangement would probably see a reduction in my current net metering savings relative to a new pricing structure, but might not really change my payback time if the overall costs go up.

So I think what I'm really asking is posed in the last two points. In your opinion, is my thinking realistic or am I out to lunch? Not specific to Maine or BC, but more of a generic question.