4 New Utility Rate Policies Boosting Solar Rewards

Olivia Fowler  |  July 30, 2019   |  Energy & Sustainability  

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The decision to install solar creates a balance of costs and rewards for customers. There are high upfront costs for solar installations, offset by the future benefits of financial incentives and energy savings. In recent years, however, several of those incentives have been threatened by changing utility rate policies. 

But the tides are turning once again. In 2019, some states have seen the light and begun to roll back net metering restrictions. Let’s take a look at the bright side of utility rate legislation and learn about four new policies giving solar rewards a boost. 

How do utility rate policies affect solar savings?

When solar panels produce extra energy, the excess can be sent to the grid in exchange for utility credits. Then, in times of low solar production, these credits can be used to pull energy from the grid in a process called net metering. This exchange of energy from high and low production times allows solar customers to dramatically lower their utility bills.

Although previously, net metering was a huge incentive for users to install solar panels, utility companies began to worry about rising rate prices for non-solar users, bringing in a new wave of restrictive utility rate policies. For example, some states decided to cap how many credits people could get from their excess energy. 

Yet these caps didn’t go unnoticed. Solar customers and installers alike made their voices heard, and state legislation has changed in response. As more consumers and businesses see the benefits of solar power, several states and territories have implemented or re-implemented pro-solar utility rate policies. 

1. Maine ends gross metering

This year, Maine committed to 100 percent renewable energy by 2050 – a huge win for solar supporters. Additionally, the Act to Eliminate Gross Metering (LD 91), signed by Governor Janet Mills, restored net metering in Maine. These solar-positive policies are expected to generate new interest in residential installations.

Solar-positive policies return solar to its former glory as an attractive energy alternative.

In 2016, Maine had reduced the valuation of excess solar energy in a practice known as “gross metering”. The new utility rate policy will allow residents to receive a one-to-one credit for supplying excess energy back to the grid, meaning users can send their excess energy to the grid in return for an equal amount of utility credits. These policies give financial incentives back to the consumer, returning solar to its former glory as an attractive energy alternative. 

2. Mini-grids in Puerto Rico 

On April 11th, the governor of Puerto Rico signed the Puerto Rico Public Policy Act. Similar to Maine, Puerto Rico committed to 100 percent renewable energy by 2050, with interim goals of 40 percent by 2025 and 50 percent by 2050.

Alongside a renewables goal, this act also protects net metering for five years, encouraging residents to make the switch to solar. As part of their rebuilding process, Puerto Rico’s Electric Power Authority also plans on rebuilding the island’s energy grid into eight mini-grids.

3. South Carolina creates energy freedom

In 2019, the South Carolina legislature unanimously passed The Energy Freedom Act. Previously, South Carolina announced a two percent net metering cap, drawing frustration from both utilities and solar developers. The pushback led to a growing movement for a comprehensive solar strategy in the state. 

So, The Energy Freedom act eliminates the net metering caps and extends existing residential solar rates for the next two years. It also paves the way for community solar to expand and provides new financial incentives for residential solar users, who have been struggling with high utility bills. South Carolina is expecting a boom in solar growth following the new legislation.

4. Connecticut proves solar’s value

In 2018, Connecticut gutted net metering, much to the disappointment of current and prospective solar users. However, in June the state congress passed a bill reinstating net metering and protecting it for two years. 

“Putting the brakes on last year’s net metering change and creating a value of solar study were [our] top priorities,” said Mike Trahan, executive director of SolarConnecticut. Additionally, state regulators are now required to study energy resource distribution when deciding to make changes to current utility rate policies. Ultimately, the new stability in renewables legislation will encourage more people to convert to solar.

One step back, two steps forward

These policies show that despite temporary setbacks, consumers and businesses continue to demand solar, and it will continue to be more and more profitable for them. One thing that will help solar installers prove this ROI is to use granular utility data in their projections. To effectively target the customers with high energy bills, installers need to calculate and communicate precisely how much they can save them. 

Despite temporary setbacks, consumers and businesses continue to demand solar.

Urjanet utility data provides a way to easily understand utility usage, allowing solar providers to accurately and quickly forecast ROI. With these new solar-forward policies, it’s easier than ever for providers to find and express value to their customers. If you want to learn more about how Urjanet can help accelerate solar sales, check out our infographic.

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About Olivia Fowler

Olivia Fowler is a Marketing Intern at Urjanet who is passionate about writing, reading, and sustainability. When she's not working, she's finishing up her Marketing Degree at BYU and playing with dogs.


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