More than 110 homeowners in Rappahannock have installed solar arrays
The Federal Energy Regulatory Commission (FERC) closed public comments earlier this week on a petition aiming to curtail states’ authority over their own renewable energy policies.
The petition challenges net metering, a billing arrangement requiring utility companies to compensate household solar generators for the electricity they produce for the grid. According to the National Renewable Energy Laboratory, “net metering has been consistently recognized as a foundational policy to support the growth of a distributed solar marketplace.”
A Rappahannock News study of public building permits revealed that more than 110 homeowners in Rappahannock County have installed residential solar arrays over the past decade, resulting in a collective investment of more than $3.5 million.
Experts are not certain what the broad repercussions of this petition might be, but many speculate that it would blitz jobs in the solar sector and saddle solar homeowners with new administrative challenges, tax increases and fees associated with installing new meters.
Virginia is one of 41 states to have a net metering policy in place. Commonwealth law says that when a solar customer produces electricity in excess of her usage, a utility company can distribute her surplus to nearby homes. The utility company in turn must compensate the solar customer with credits she can apply towards purchasing power from the utility later.
“It’s just a billing arrangement similar to when you had rollover for minutes on cell phones, if you remember that,” says Glen Brand, Vice President of Policy and Advocacy for Solar United Neighbors.
A mysterious organization called the New England Ratepayers Association (NERA) believes that this arrangement is unduly expensive for utilities and therefore shifts the cost to “the most vulnerable customers” on the grid.
Since utility companies are purchasing solar power for resale, NERA says, they should compensate solar generators not at a retail price, as they do now, but at a much lower wholesale price. “Basically, NERA is saying that rooftop solar homeowners . . . should be considered, in effect, mini power plants and regulated as such,” Brand says.
The distinction between retail and wholesale may seem hairsplitting, but it makes all the difference when it comes to jurisdiction. While states control retail sales, the federal government controls wholesale sales.
Brand says that if FERC were to side with NERA, “it could really hurt states’ ability to enact their own energy goals.”
In March, Gov. Ralph Northam signed Virginia Clean Economy Act in March, pledging to create 30,000 new solar jobs by 2030 and bolster economic access to rooftop arrays. Virginia’s net metering policy creates a major incentive for people to install panels because it helps homeowners pay off their initial investment. Without that incentive, Brand says solar could become less affordable and the solar job sector would suffer.
The solar industry is already facing serious economic vulnerability. According to a recent report released by the Solar Energy Industries Association (SEIA), the industry has already hemorrhaged 72,000 jobs nationwide since the beginning of the coronavirus pandemic. What’s more, existing federal tax credits offering incentives for homeowners to install solar panels are slated to taper off in the next few years. If FERC sides with NERA, thousands more jobs could be at risk.
“Nobody in China or India can install your solar on your roof,” Brand says. “These are local jobs . . . Anything that would hurt our economy at any time is bad, but right now it’s [especially] unconscionable.”
At least two states and 24 Democratic members of Congress have urged FERC to reject NERA’s petition. In a letter expressing their dissent, the lawmakers say: “It appears that NERA operates more like a trade association, representing the interests of a select number of industry or utility players, rather than a grassroots ratepayer group that represent[s] the public interest.”
Indeed, while the organization ostensibly advocates on behalf of ratepayers, NERA is not forthcoming regarding the number of members it represents and has declined multiple requests to publicly identify its 12 donors. What’s more, the organization’s legal counsel is Steptoe & Johnson attorney David Raskin, who represented the utility trade group Edison Electric Institute (EEI) in a similar case before the Supreme Court in 2012. Curiously, EEI has neither endorsed nor condemned NERA’s petition.
But what about NERA’s claim that net metering forces the most vulnerable utility customers to pay the tab? According to the Brookings Institute, “the economic benefits of net metering actually outweigh the costs and impose no significant cost increase for non-solar customers. . . . [N]et metering is in most cases a net benefit — for the utility and for non-solar rate-payers.”
Glen Brand at Solar United Neighbors says the rate that utilities pay their solar customers is well below actual value when transmission costs and the lowering of peak energy prices are taken into account.
“It saves everybody money . . . so this charge of net metering somehow being a problem is really only a problem for utilities insofar as they want to discourage people producing their own power,” Brand says.
Staff reporter Rachel Needham is a corps member with Report for America, a national service program that places journalists into local newsrooms.