Transcript Document 7472942

NET METERING
Policy Recommendations for Indiana
Prepared by:
Eric Cotton, ECI Wind and Solar and
Laura Ann Arnold, The Arnold Group
Prepared for:
Indiana Distributed Energy Advocates, Inc. (IDEA)
Revised: December 29, 2009
Authors of this Report
• Eric Cotton, Partner, ECI Wind and Solar
(765) 702-0231,
[email protected]
• Laura Ann Arnold, Owner, The Arnold
Group (317) 635-1701,
[email protected]
What is Net Metering?
•
A billing arrangement between a utility company and a customer - with a gridtied, renewable energy system - where 1 kilowatt hour generated by the
customer has the same value as 1 kilowatt hour consumed by the customer.
•
Basically, the meter rolls backward and forward recording the energy flowing
between a customer’s renewable energy system and the utility’s power grid.
The utility company then allows the customer to receive credit for excess energy
produced.
•
Without net metering, a customer’s net excess generation is essentially donated
to the utility company, or sold for pennies on the dollar.
•
In the following few slides, 9 key points of any net metering policy will be
described.
Interconnection vs. Net Metering:
• Interconnection = the technical rules and
procedures for customers to “plug in” to
the grid.
• Net Metering = the billing arrangement by
which customers realize savings from their
systems where 1 kWh generated by the
customer has the same value as 1 kWh
consumed by the customer.
1. Individual System Size
• Customer load and demand
should determine system
size specifications.
• There is no need for
arbitrary system limits.
 In an ideal net metering
policy, the individual system
size limit would be 2 MW or
greater.
System Size Limits for State
Interconnection Policies*
*Connecting to the Grid, October 2009, Vol. 12, No. 10, Interstate
Renewable Energy Council (IREC), p. 2.
System Size Limitations*
*Connecting to the Grid, September 2009, Vol. 12, No. 9, Interstate
Renewable Energy Council (IREC), p. 2.
2. Total Program Size Limits
• Having a total capacity limit (e.g. a percentage of
a utility’s peak demand) jeopardizes the
expansion of on-site renewable generation,
• The unknown factor of when that arbitrary limit
will be met prohibits customers from effectively
planning for future renewable installations.
 An ideal net metering policy would have no limit
on total program size.
3. Treatment of Net Excess
Generation
• A successful program should facilitate “indefinite
rollover”, at retail rates, so customers receive full
credit for excess generation during seasons when
renewable output is highest, and apply it toward
their consumption when output is the lowest.
• Why indefinite rollover? Why not an annual
payout for net excess generation?
– Annual payouts could encourage over sizing systems in
an effort to make money from the utility company. This
would be in the best interest of no one.
 An ideal net metering policy would allow for
indefinite rollover – at retail rates – of net excess
generation.
4. Eligible Renewables
• There is no reason to exclude any type of
renewable energy source.
In an ideal policy, all types of renewable
energy would be eligible for participation in
net metering.
Technology Eligibility*
*Connecting to the Grid, September 2009, Vol. 12, No. 9, Interstate
Renewable Energy Council (IREC), p. 2.
5. Eligible Customers
• No customer class should be excluded from net metering.
• Utilities may argue for the exclusion of commercial
customers because of the significant revenue loss from that
customer. Conversely, net metering plays an important role
for commercial customers who invest a substantial amount
for renewable energy generation. It is counterproductive to
protect the economic interests of one sector while harming
the economic interests of another.
 In an ideal net metering policy all customer classes would be
eligible to participate.
6. Utilities Required to Participate
• Some states only require certain utilities to
offer net metering.
• The most common example is states only
requiring investor-owned utilities (IOUs) to
participate.
 In an ideal policy, all utilities would be
required to offer net metering.
7. Metering
• Customers may be required to pay for additional meters,
adding no value to the customer-generator or the utility.
• There may be a requirement to switch to a time-of-use
rate, where the customer pays differing rates depending
on the time of day. This can be a disadvantage to
customers and discourage renewable energy generation.
 In an ideal net metering policy there would be no requirement
for additional meters or time-of-use rate.
8. Ownership of Renewable Energy
Credits (RECs)
• Frequently, customer-generators qualify for
renewable energy credits (RECs) that can be
used for marketing purposes or to meet legal
renewable energy targets.
An ideal net metering policy would not allow
utilities to take these credits without paying for
them.
States on REC Ownership*
*Connecting to the Grid, September 2009, Vol. 12, No. 9, Interstate
Renewable Energy Council (IREC), p. 3.
9. Standby Charges or Other Fees
• A “pay-to-play” model has been adopted by some
utilities.
• Fees can be so costly that they diminish the
economic incentive net metering is intended to offer.
• Example: An REMC in Indiana charges net metering
customers a monthly Delivery Charge of $38.50, but
their regular residential electric rate customers are
only charged a monthly “Facilities Charge” of
$30.00. Over-all there is a $8.50 “fee” per month to
net meter.
 An ideal net metering policy would not permit utility
companies to impose standby charges, or other
fees, on participating customers.
Ideal Policy vs. Minimum Needed
Changes Now
• Goal: Show SOME progress towards
invigorating Indiana’s net metering policy in
2010, by doing the following:
•
•
•
•
•
System Size:
Utility Types:
Customer Classes:
Eligible technologies:
Maximum Enrollment:
•
* approx. 200 MW
100 kW
IOU’s only
All
Expand
1% of Sum. Peak*
Alternative:
Minimum System Sizes by
Installation Type
• 50 kW for residential customers
• 100 kW for commercial customers
• 2 MW for industrial & agricultural
customers
• 5 MW for governmental entities including
state & local government, K-12, school
corporations & higher education
Understanding System Sizes
• 10 kW = 1,000 kW hours/month = The
power consumed by a 1000 – 1500 square
foot home. (higher if all electric)
– Approximately an 800 square-foot solar array
made up of about 45 solar modules.
– Approximately an 800 pound wind turbine (12
foot blades) on a 60 – 120 foot tower.
Understanding System Sizes
• 50 kW = 5,000 kW hours/month = The
power consumed by a 5000 – 6000 square
foot home. (higher if all electric)
– Approximately a 3,900 square-foot solar array
made up of about 215 solar modules.
– Approximately a 6,000 pound wind turbine (30
foot blade) on a 100 – 120 foot tower.
Understanding System Sizes
• 100 kW = 12,000 kW hours/month = The
power consumed by a 6,000 square foot
office building. (higher if all electric)
– Approximately a 7,800 square-foot solar array
made up of about 430 solar modules.
– Approximately a 15,000 pound wind turbine
(69 foot blade) on a 120 – 140 foot tower.
Understanding System Sizes
• 1,000 kW = 120,000 kW hours/month =
About 1/3 the power used by a small
school. (higher if all electric)
– Approximately a 78,000 square-foot solar
array made up of about 4,300 solar modules.
– Approximately a 150,000 pound wind turbine
(125 foot blade) on a 150 – 200 foot tower.
Net Billing vs. Net Metering
• Intentional Deceptive Marketing Campaign: “Wolf
in sheep’s clothing.”
• Customers often confuse it with true net metering.
• Some REMC’s have adopted this phrase.
• Nothing “NET” about it.
• Uses Avoided Cost!
Net Metering or Feed-in Tariff
• Net-metering is designed to create
incentives to install systems that generate
power equal to or less than the predicted
on-site load.
• Feed-in tariff (FiT) is designed so that
systems can be installed at sites with no
load, and generate electricity that is
purchased, under contract, by the local
utility.
Net metering vs. Feed-in Tariff
• Net metering and Feed-in Tariffs (FiT) can
co-exist and are not mutually exclusive.
• Net metering and FiT programs in place
simultaneously can deliver great options to
a wide group of potential renewable
energy system owners.
• They can exist together, and consumers
will send clear messages to policy makers
about their preferences.
Advantages of a Strong Net
Metering Policy
• Provides a market-based
incentive that encourages
renewable energy production.
• Facilitates growth of consumer
participation and cumulative
capacity of renewable energy
systems.
• Gives consumers incentive to
size their system to provide for
their entire load.
• Encourages clean energy
production and energy
independence.
What is Indiana’s Net Metering Policy?
Eligible
Renewables
Customers
Size
Limit
Overall Enrollment
Limit
Utilities
Required to
Net Meter
Handling of
Excess
Indiana’s
Policy
- Photovoltaic
- Wind
- Small
Hydroelectric
- Residential
- K-12 Schools
10 kW
0.1% of utility’s most
recent peak summer
load
Investor-owned
utilities
Credited to
customers’
next bill
An Ideal
Policy
All
All
2 MW
and
above
None
All utilities
Indefinite
rollover to
customers’
next bill at
retail rates
• In Indiana, utilities may not charge customers any fees for additional metering for
single-phase configurations, for customer’s request to net meter, or for an initial net
metering facility inspection.
• While net excess generation is credited to customer’s next bill, Indiana’s rules do not
address the rollover of net excess generation for continuous customers.
•There are some positive points to Indiana’s existing net metering policy, but there is
enormous opportunity for improvement.
Indiana IOU 2007 Net Metering
Summary
Investor Owned Utility
(IOU)
Total Number of Net
Metering Customers
and Facilities
Number, Size and Type of Net
Metering Facilities
Duke Energy Indiana
30
29 – solar ranging from 1.0 to 28.8 kW
1 – 9.0 kW wind
Indiana Michigan Power
1
1 – 1.1 kW solar
IPL
5
Total capacity of 6.86 kW solar
NIPSCO
4
1 – 2.5 kW solar
1 – 1.36 kW solar
1 – 640 W solar
1 – 10.0 kW wind
SIGECO/Vectren
1
1 – 5.0 kW solar
IURC IOU 2008 Net Metering Summary Data1
Investor Owned Utility
(IOU)
Total Number of Net
Metering Customers
and Facilities
Number, Size and Type of Net
Metering Facilities
Duke Energy Indiana
44
42 – solar ranging from 1.0 to 19.8 kW2
2 – wind ranging from 9.0 - 10 kW
Indiana Michigan Power
4
2 - Solar ranging from 1.1 – 2.8 kW
2 – Wind ranging from 1.9 – 5.5 KW
IPL
5
5 – Solar with total capacity of 5.75 kW
7
5 – Solar ranging from 0.2 KW to 3 KW3
3 – Wind ranging from 0.4 KW to 10KW
4
3 – Solar ranging from 5.0 – 16 kW2
1 – Wind at 1.8 KW
NIPSCO
SIGECO/Vectren
1 – Represents bets available data from IURC as of 12/28/09
2 – Corrected Data
3 – NIPSCO recorded 8 systems from 7 customers. One customer has 2 systems.
How Do We Measure Up?
• 42 states and D.C. have adopted net metering policies.
• Below are statistics comparing Indiana to the other net metering
states:
– Have More Eligible Renewables: 37 States
– Have More Eligible Customers: 40 States
– Have Greater Size Limit: 40 States
– Have Greater Overall Limit: 36 States
• The following map is from the Database of State Incentives for
Renewables & Efficiency (DSIRE). This map highlights individual
system limits across the United States.
– DSIRE indicates 44 states (including D.C.) have net metering available.
Three states offer net metering voluntarily, and those 3 states are not
included in the above statistics.
Net Metering
www.dsireusa.org / December 2009
WA: 100
MT: 50*
ND: 100*
VT: 250
MN: 40
OR: 25/2,000*
WY: 25*
MI: 150*
WI: 20*
IA: 500*
IN: 10*
CO: no limit
NE: 25
OH: no limit*
co-ops & munis: 10/25
IL: 40*
WV: 25
UT: 25/2,000*
KS: 25/200*
MO: 100 KY: 30*
NC: 1,000*
NM: 80,000*
OK: 100*
NV: 1,000*
CA: 1,000*
AZ: no limit*
AR: 25/300
GA: 10/100
AK: 25*
LA: 25/300
FL: 2,000*
HI: 100
State policy
KIUC: 50
State policy applies to certain utility types only (e.g., investor-owned utilities)
NH: 100
MA: 60/1,000/2,000*
RI: 1,650/2,250/3,500*
CT: 2,000*
NY: 25/500/2,000*
PA: 50/3,000/5,000*
NJ: 2,000*
DE: 25/500/2,000*
MD: 2,000
DC: 1,000
VA: 20/500*
42 states
& DC
have adopted a
net metering policy
Voluntary utility program(s) only
*
ME: 660
co-ops & munis: 100
PR: 25/1,000
Note: Numbers indicate individual system capacity limit in kW. Some limits vary by customer type, technology and/or application. Other limits might also apply.
Net Metering Grades 2007
www.freeingthegrid.org / November 2009
DC: F
Grade = A
Grade = B
Grade = C
Grade = D
Grade = F
No Statewide policy
Net Metering Grades 2008
www.freeingthegrid.org / November 2009
DC: C
Grade = A
Grade = B
Grade = C
Grade = D
Grade = F
No Statewide policy
Net Metering Grades 2009
www.freeingthegrid.org / November 2009
DC: B
Grade = A
Grade = B
Grade = C
Grade = D
Grade = F
No Statewide policy
Vectren and Duke Energy
• Interestingly, two utility companies in Indiana have voluntarily
expanded their net metering tariff.
• Vectren allows Municipal Corporations to net meter. This is
in addition to the residential customers and K-12 schools, which
are required by the state of Indiana.
• Duke Energy permits small commercial customers to net
meter. Again, this is along with residential customers and K-12
schools, which are required in Indiana.
• Compared to Indiana, all states with net metering policies have
a larger number of eligible customer classes, and some utilities
in Indiana are opening eligibility to additional customers.
• Now is the time for Indiana to catch up with (or surpass) other
states, and to align with what utility companies in this state are
offering.
Tipmont REMC
• Since it is not an investor-owed utility, Tipmont
REMC is not required to offer net metering.
However, they have done so voluntarily. Their
policy is superior to that of the current Indiana rule in
the following ways:
– Tipmont REMC allows renewable energy produced by
wind, solar, water and various types of biomass to net
meter. Biomass is not an eligible renewable energy
source in Indiana’s policy.
– Tipmont allows residences, small businesses and
governmental accounts to net meter. Small businesses
and government offices are left out of the eligible
customer classes in the current Indiana rule.
Hopes for the Future of Net
Metering
• Indiana will improve its net metering policy,
encouraging utilization of the state’s abundant
resources to generate renewable energy.
• More states will adopt a net metering policy.
• Ideally, a national renewable energy policy will
be implemented at the federal level.
Want to Learn More?
• Interstate Renewable Energy Council
www.irecusa.org
• Database of State Incentives for Renewables &
Efficiency www.dsireusa.org
• Network for New Energy Choices
www.newenergychoices.org
– Freeing the Grid: 2009 Edition Best and Worst
Practices in State Net Metering Policies and
Interconnection
• Indiana Renewable Energy Association
www.indianarenew.org
What Can You Do?
• Contact your State Legislators and urge they support
legislation to change net metering in 2010.
• Send a Letter to the Editor of your local newspaper
urging changes in net metering this year.
Additional Slides
Interconnection of Renewable
Energy Systems - SAFETY
• Renewable Energy and Distributed generation
systems have well defined safety standards.
– IEEE 1547 defines the standards for interconnection
devices.
• Tighter standards than the utility company.
• Dictates when a device may interconnect, and when it must
disconnect.
– UL 1741 is standard for inverters (interconnection
devices).
• Certifies that device meets the standards of IEEE 1547
• Virtually all devices on the market have UL 1741 certification
• Virtually all utilities already SPECIFY UL 1741 devices.
Interconnection of Renewable
Energy Systems - SAFETY
BOTTOM LINE:
“Grid inter-tied renewable energy systems have
been installed in the United States since the enactment of the
federal PURPA law in 1978. These systems cumulatively
have over half a billion operating hours, apparently without
any reported personal injury or property damage claims
attributed to their interconnection and operation.1"
1Allocating
Risks: An Analysis of Insurance Requirements for Small-Scale PV
Systems, American Solar Energy Society Annual Conference, June 2000,
Madison WI, pg. 6.