Issue link: https://nebusinessmedia.uberflip.com/i/480067
www.CTGreenGuide.com SprinG 2015 • Connecticut Green Guide 33 Renewable Payments Solar owners should receive full value of power generated By Jon Gordon M any Connecticut electric customers have already taken the initiative to install renew- able energy in their home or commercial facility, and many others are actively considering it, as the benefits can be considerable. It is important that the electric energy marketplace fully compensate these consumers who become electricity producers for the full value of the electricity they generate. Given the intermittent nature of renewable power sources such as solar, at any given time a customer may be producing more or less electricity they consume. It is critically important to get compensation for renewable energy produced by these consumer/producers right, in order to continue to incentivize more and more customers to install distributed solar and other forms of renewable generation at their home or place of business. Finding that exact right compensation is a bit tricky, though. Getting this right involves the complex and often ar- cane world of utility electric rates and metering practices which until recently never envisioned a distributed energy revolution where consumers of electricity become produc- ers of electricity. Net metering is a means by which excess electricity produced by a renewable energy system at a customer location will spin the existing home or business electricity meter backwards, effectively banking the electric- ity until it is needed by the customer. This should provide the customer with full retail value for all the electricity produced, but in the complex deregulated energy world determining the appropriate full retail value is not always as simple as it might seem. It has become a controversial topic, but it is essential that Connecticut gets it right. The solar industry would argue that these producers should be compensated at a rate equal to the amount paid by the ratepayer to the utilities for the electricity. The utilities would prefer to compensate these produc- ers at a rate closer to the wholesale electricity rate, es- sentially what they pay power plants to supply electric- ity onto the grid, which is about a two-thirds lower than what ratepayers end up paying. The truth, which should be determined by regulators after input from the indus- try and the utilities, lies somewhere in-between. It is critical that Connecticut policymakers and the Connecticut Public Utilitites Regulatory Authority implement policy and oversees electric utility rates and metering practices, ensure that consumers are both ap- propriately incentivized with enabling metering practic- es, and fairly compensated for the renewable electricity they produce. Connecticut policymakers and regulators need to stay ahead of technological advancements in distributed renewable generation with enabling policies that encourage continued innovation and rapid deploy- ment of solar. Jon Gordon is an independent energy policy consultant and a 28-year veteran of the energy industry, working on issues ranging from power markets to regulation to legislative affairs. Gordon also serves on the Board of REEBA (Renewable Energy and Efficiency Business Association).