New legislation and decreases in the cost of solar panel pricing in the past year have fundamentally changed the community-scale renewable energy landscape. Projects that in the past were too expensive to complete or too complicated to pursue are now possible with improved Vermont energy legislation and reduced construction and materials costs. As an example, the market for solar modules (more than a third of the total project cost) has seen an approximate 30% decrease every year since 2008.
Changes in Vermont’s Energy Legislation:
Several key changes over the past few years have streamlined and helped to fund renewable-energy development:
In May 2011, Governor Peter Shumlin signed into law H.56, the Vermont Energy Act of 2011, a bill designed to expand renewable energy and efficiency projects in Vermont. Recognizing the “peak shaving” value of solar PV projects for Vermont’s utilities, the law created an incentive to catalyze more net metered solar projects by requiring utilities to offer a “solar adder” to customers for the energy they produce through their own net metered solar PV systems.
- In May, 2012, Governor Shumlin signed into law a number of energy-related bills which cumulatively provided significant improvements to the renewable energy landscape in Vermont. Most notably for net metering, Act 170 created a pathway for large users of electricity to participate in the benefits associated with net metering projects by allowing these customers to see credits on their bills set at the residential rate for energy produced by customer-owned generation, effectively ending the “demand charge penalty” where the lower rates for demand charge customers (the rates seen after the larger one time demand charges are assessed) were the basis for the credits. Legislation in 2012 was also successful in creating a more transparent and predictable means of property tax treatment for renewable energy systems.
- While all of these changes aid the development and support of renewable energy sources, one of the most important changes for clean energy took place in 1998, when Vermont passed H.605 to allow net metering for customer generated electrical production.
The Benefits of Net Metering:
Net metering permits customers to store collected electricity and feed it back into the grid to offset utility bills. It allows the grid to act as the “battery” for storage of the electricity produced by intermittent resources such as solar and wind. Solar net metering systems actually benefit utilities, due to the fact that the majority of the power produced by these systems is generated at times of peak demand on the utilities network, thus the electricity produced allows for less electricity to have to be purchased from expensive, spot-market sources. Nearly every state permits net metering, but the State of Vermont has one of the more progressive net metering policies, in that both virtual and group net metering is allowed. Virtual net metering means that the recipient of the credit for the electricity generated by the array does not have to be located at the array itself. Group net metering allows for multiple meters to be credited by production from a single source, allowing multiple members to participate in the production associated with a centrally located array (a neighborhood association, for example).
Making Renewable Energy a Better Alternative:
As the price of solar panels continue to decrease and state incentives become more attractive, renewable energy projects become increasingly feasible. Creative financing options like PPAs and well-utilized tax credits for investors make it easier for site hosts to become involved, and net metering makes a solar project not just green, but lucrative. Encore Redevelopment Principal Chad Farrell projects that many sources of green energy will be price competitive with fossil fuels in three years, further underscoring the role renewable energy has to play in the way we generate and use electricity.