Net metering for solar scores another win in Vermont, faces battles elsewhere

American solar advocacy group The Alliance for Solar Choice (TASC) celebrates yet another victory for ‘net metering’ policy in the United States, this time in Vermont. The small, northeastern state’s legislature voted to increase the cap on solar net metering from 4% of a utility’s peak load to 15%, clearing the way for the expansion of solar there.

The CEO of Vermont’s largest power company, Green Mountain Power, came out boldly in favour of net-metering, noting its importance for households in deciding whether to go solar or not. “I think having a cap is a huge problem. There should be no cap,” she said. “We should figure out how to adapt to this new future that is here and is what our customers want.” The second largest power company in the state, Vermont Electric, however, took the opposite stance, arguing that net metering amounts to a ‘cross-subsidy’ between customers who can afford solar and those who can’t–an argument that has certainly been heard in Australia as well. 

Vermont utilities are just the most recent to contest the rise of net metering policies for rooftop solar in US states; similar battles have taken place in Massachusetts and Arizona, and more are currently underway in Florida and South Carolina. In most cases to date, TASC has successfully made the argument for net metering to be kept in place. Meanwhile, Minnesota has struck out on its own, developing a ‘value of solar’ valuation method for exported solar that could (and, arguably, should) serve as a model for other US and possibly even Australian states.

In the US, net metering is the arrangement by which residential solar system owners are paid a rate equivalent to the retail electricity rate for their excess solar power. This approach, frequently referred to as a ‘1-for-1 solar buyback’ here in Australia, has not gained much traction down under except for temporarily in a select few states and territories. In an interesting contrast with the States, these 1-for-1 buybacks, when offered, have sometimes been initiated by utilities themselves (the ACT and Victoria governments offered them as legislated incentives).

The tacit assumption would be that solar system owners are being paid the ‘fair value’ of their exported solar power–this indeed is the argument that TASC is putting forward in the US. Subsequently, however, these programs have been cut back–with Tasmania’s Aurora energy being the most recent to close its scheme to new applicants. In almost cases in Australia so far, the 1-for-1 rate has been reduced to a ‘market rate’–which essentially amounts to whatever utilities feel like offering or whatever they feel that solar is worth to them.

Nevertheless, given the high cost of grid electricity in Australia and the relatively low cost of having a solar system installed, many Australians are still making the switch to solar.

Top image: Meeting house in Marlboro, Vermont, via Wikipedia.

© 2014 Solar Choice Pty Ltd