Big changes could be in store for how residential and commercial solar array owners would be compensated for selling their net energy production from solar arrays back to the utility grid and HOW much utility companies will be obligated to compensate them for doing so.
In recent weeks, Jefferson Electric was asked to provide expert testimony for the INDIANA DISTRIBUTED ENERGY ALLIANCE, an advocacy group working to get fair financial compensation for residents and businesses in Indiana whose personal and organizational solar investments are producing an excess amount of energy which is contributing to the utility grid’s supply.
The definition of net metering, according to Solar Energy Industry Association (www.seia.org) is: Net metering is a billing mechanism that credits solar energy system owners for the electricity they add to the grid. For example, if a residential customer has a PV system on their roof, it may generate more electricity than the home uses during daylight hours. … This energy is pushed back through the customer’s electrical meter and the customers are then only billed for their “net” energy use.
If you produce more energy than your home or business is able to use, there are three things that you can do with this energy.
The first way homeowners and business owners can save excess energy produced by their solar energy production system is in a storage device or battery. For example, some solar energy producers will invest in products like Lion Energy’s Sanctuary Battery system, a lithium-ion energy storage system that allows one to save energy for later usage. The Tesla Powerwall is another example of this technology. Storage options like Tesla and Lion are not inexpensive solutions. A typical energy storage system, such as Tesla’s Powerwall will cost on average $12-15K installed. Additional storage beyond the initial battery is often discounted as you scale to a larger amount of energy storage.
The second way a homeowner or business can utilize this energy is to do nothing with it at all! With this option, the excess is simply unutilized. For individuals and businesses that have invested, in some cases, tens of thousands of dollars in their solar energy systems, this is a very unfortunate waste of excess energy.
The third way that excess energy can be utilized is through a net metering partnership with the utility company. Many utility providers around the country have been very amicable to this form of energy exchange because it promotes diversified energy production, reduces loads on volatile transmission lines, and decreases reliance on traditional energy sources which often produce extensive amounts of greenhouse gases. There are various agreements that utility providers offer customers to compensate them for the energy that is pushed back onto the grid. One of them is just a wholesale price per kilowatt-hour that is credited to the customer’s energy bill. Other utility companies go as far as giving fair retail rates for the energy produced by customers.
Jefferson Electric has long been a promoter of renewable and environmentally clean ways for energy production and storage. Until now, Jefferson has taken an almost exclusively educational approach to solar energy, in a socio-political sense. Our customers value our expertise and experience working with energy companies and local municipal jurisdictions to help them navigate connecting to the grid as they invest in solar.
Sadly, more recently as we’ve seen powerful utility giants operate as virtual monopolies in the markets they serve and thus, exert a large amount of lobbying power and jurisdictional privilege over customers who have little to no bargaining power.
The recent expert witness testimony provided by Jefferson Electric’s Director of Operations, Kendall Ludwig, to the STATE OF INDIANA, INDIANA UTILITY REGULATORY COMMISSION, was our first public stance in a collective alliance towards fairness and equitable compensations for Hoosiers who choose to invest in solar energy. We do not have any presumptions about what the outcome of our participation in this cause might be, but we wanted to let you, our valued customers, partners, and friends, know that we’re participating in this way.
If you have any questions, comments, or ideas about ways to get involved in opportunities like this, please don’t hesitate to contact our Operations Team at Jefferson Electric. (317) 418-3917