Newsletter
First Quarter - January 2016
1Q 2014
Net Metering Policy - A National Topic
By Matt Partymiller, General Manager - Solar Energy Solutions
You may have heard Hillary Clinton and Bernie Sanders comment on Nevada net metering policy
in recent weeks. NV Energy recently ended a promising net metering program and the
cataclysmic impact felt among Nevada’s distributed generation industry garnered national
headlines (distributed generation is power generation owned by the consumer). Many
Americans, including many owners of solar arrays, still fail to understand the importance of net
metering.
A handful of states started enacting net metering policies as early as the 80s. Around the turn of
the millennium, new distributed generation technology and falling prices led many other states
to follow. Kentucky first established net metering in 2004. By 2010, almost every state had a net
metering policy in place.
As a policy, net metering creates a concise way for consumers that generate their own power to
connect to the grid. Net metering is easily understood and communicated as a one-to-one swap
of energy between consumer and utility producer (any excess unit of energy produced by the
consumer is sent to the utility for a credit, preventing the consumer from needing to buy an
equivalent unit of energy when the consumer is not producing power). Net metering has no tax
implications and no financial repercussion as no financial transaction takes place. The net
metering contract creates a clear legal framework for consumers to produce their own
power. And net metering answers utility concerns about monopoly infringement by limiting
system production to be on par with the consumer’s annual energy consumption (i.e. no selling
energy to the utility).
Under a Minnesota "Value of Solar" study, the
positive impacts of decentralized solar energy
production to utilities are valued as well as the
costs of serving a customer. These positive
impacts include offsetting peak load, avoided
fuel costs, avoided generating capacity costs
(new plants), avoided environmental costs,
avoided transmission and distribution capacity
costs, and avoided Plant O & M costs both
variable and fixed. For more details, see the
Minnesota Value of Solar: Methodology, prepared for Minnesota Department of Commerce,
Division of Energy Resources, Clean Power Research, 30 Jan. 2015.
For all the value and elegance of net metering, rapid deployment of renewables in the past few
years has led utilities and others to perceive some real failings in net metering policy. The
primary complaint with net metering is that it fails to accurately value the energy being
produced. Utility rates are structured in hundreds of different ways but most feature minimal
flat charges with the majority of the bill based on energy consumed. This structure allocates
fixed costs into the charge for each unit of energy (commonly referred to as a kilowatt-hour or
kWh) even though those fixed costs are present, regardless of total energy consumption. Under
this rate structure, high energy consumers are effectively bearing more of the burden from fixed
costs (which depending on frame of reference – may or may not be fair). This rate structure
encourages consumer investment in infrastructure by minimizing upfront charges (each new
building is less expensive to the consumer as utility service is financed over the life of the
meter). At the same time, some feel this structure inflates the value of distributed generation
energy provided to the utility under net metering.
Kentucky Utilities, for instance, charges roughly $0.08 for a residential kWh even though their
cost to generate that kWh is roughly $0.04/kWh. The other $0.04 represents the fixed charges
like transmission and distribution lines, trucks, call center hold music, and other fixed/ overhead
costs. Some parties see the net metered customer’s failure to pay the fixed costs associated with
each unit of energy as an unfair subsidization of net metered customers by the rest of the ratebase.
The result? Utilities across the country, including Kentucky Utilities, are advocating
for changes to net metering policy to compensate the consumer at a rate that is
lower than the retail rate. Many of the same utilities are also moving to have fixed costs
pushed into flat monthly service charges and moved out of generation charges (many of us in
Kentucky have seen the $5 base monthly charge increase to $12-20 in recent years). Some
parties even tried, unsuccessfully, to elicit support for a net metering repeal amongst low-income
housing advocates and organizations like the NAACP by presenting these claims as the poor
subsidizing solar arrays for the wealthy.
Distributed generation advocates across the country are responding. Many DG advocates,
including KySES, are asking utilities to work with them to develop a true ‘value of solar’. Under a
‘value of solar’ study, the positive impacts of solar energy production would be valued as well as
the costs of serving a customer. The end result would be a solar kWh value at which solar energy
production would be credited. Some areas like Austin, TX and Minnesota have moved forward
with ‘value of solar’ proposals. An advantage of this approach is that solar value will change over
time. As more solar is present on the grid, current advantages like power production coinciding
with utility peak will become disadvantages and go from having a positive impact on value to a
negative impact. A disadvantage of this value approach is that someone has to set the value and
they have to do it regularly. Other DG advocates, including those in mature solar markets, are
holding firm to net metering. These advocates believe net metering comes close to a fair value
(generally true from studies to date) and is working well as we transform the nation’s energy
landscape.
As Kentucky’s 2016 legislative session is now well under way, it is worth noting that little action
is likely with regards to Kentucky’s current net metering policy. After a year of discussions,
Kentucky utilities and Kentucky distributed generation advocates are still at loggerheads over
how to fairly resolve utility concerns about net metering. Utilities are willing to compromise by
expanding current net metering policy from 30 kilowatts (enough to power a large home) to
1,000 kilowatts (enough to help mid-size commercial businesses and even schools). This change
would allow solar installers a whole new range of customers in Kentucky, expanding a residential
market to include commercial and industrial sectors. However, utilities also want to ensure that
they set the rate for generation fed back onto the grid. Distributed generation advocates are
unwilling to let utilities unilaterally set these rates. Distributed generation advocates want the
Kentucky Public Service Commission to review and set those rates (the PSC is the same public
entity that regulates utilities throughout Kentucky). Advocates believe that by having the PSC
review utility proposals they will get a more accurate valuation.
In the meantime, LG&E/KU and EKPC (generation partner for most of the state’s Coops) see
solar as a promising emerging technology. These utilities are each investing in 10 MW AC solar
arrays to complete next year. To date, the Commonwealth’s entire solar capacity is
approximately 15 MW. If net metering policies are rolled back across the nation, it is extremely
likely that the solar industry will continue to see rapid growth, just growth limited to the utility
sector. Some solar advocates argue this is exactly what utilities want – to kill
distributed generation and benefit from being the solar owners during the boom in
renewable energy construction.
If you would like to be involved in crafting Kentucky net metering legislation in future years,
please write to KySES at [email protected] and let us know.
Meet with Your Legislator and Support Clean Energy
By Theresa Martin, KySES Chairperson
Do you have a few hours to support clean energy legislation for the state of Kentucky? All KySES
members are invited to attend the following clean energy lobby day events at the 2016 General
Assembly in Frankfort at the Capital Building Annex. These events will provide support for the
Clean Energy Opportunity Act, Energy Efficiency Tax Credits (HB 136), Net Metering (2015 SB
196) and other key energy bills. For more information on the Clean Energy Opportunity Act,
view this webinar. For information on how programs such as those proposed by the Clean Energy
Opportunity Act benefit the states that enact them, review this fact sheet. For more information
all the energy bills, visit the Kentuckians for the Commonwealth website.
There is no required training to be a lobby day
attendee. Simply meet at 9 a.m. in the Capital
Annex Cafeteria on the date of the lobby day
event. You will be connected with organizers
and other lobby day activists. You’ll then meet
with legislators and have a chance to speak to
them about why clean energy means good jobs,
clean air and progress towards the future for
Kentuckians.
Clean Energy Lobby Day #1 sponsored by
Kentucky Interfaith Power and Light (KIPL) March 1 from 9:00 AM to Noon - Capital
Building Annex, Frankfort, KY, meet in the
Cafeteria at 9:00 a.m.
KIPL is hosting a lobbying day to promote the
Clean Energy Opportunity Act during the 2016
General Assembly in Frankfort. KIPL will
provide information on the CEOA and talking
points to those who come to lobby. Kentucky
IPL is scheduling meetings with lawmakers and
we will then be breaking into teams to cover
these meetings. Please RSVP for this event and
help us to bring about a more sustainable future
for our children.
Clean Energy Lobby Day #2 sponsored by the Kentucky Student Environmental Coalition
(KSEC) March 9 at 9:00 AM - Capital Building Annex, Frankfort, KY, meet in the Cafeteria at
9:00 a.m. to 2:00 p.m.
KSEC is hosting a lobbying day to promote several clean energy bills during the 2016 General
Assembly in Frankfort. Assemble in the Capital Building Annex cafeteria at 9 a.m. where you will
partnered with citizen’s lobbyists and receive information on the bills the group will discuss with
legislators. The event will run from 9 am-2 pm with meeting preparation from 9:00-9:30 and a
youth forum on clean energy at 1 pm. It would be very helpful if everyone attending would fill out
the registration form so KSEC can coordinate lobby attendees with their legislative
representatives and coordinate carpools.
Solar Presentations - Come One Come All!
By Don Adams, KySES Vice Chairperson
Many years ago, my son and I began looking into using solar energy to generate electricity. Our
projects started small and simple, but continued to grow both in size and complexity over the
years. There were a couple of things that put us on this path.
First, was our interest in self sufficiency. In fact, our interest in the self sufficiency area was so
great that we started a website dedicated to this issue: Earthineer. (www.earthineer.com) It was
through Earthineer and then our involvement with the Mother Earth News Fairs that we began a
series of presentations at MENF outlining our journey specifically with solar and renewable
energy projects.
Before the first of these presentations, I thought
that there would be such little interest in this
topic, that I bet my son a beer that no one would
show up. Well, I lost that bet - big time! We have
kept that same bet running, half jokingly, over
the course of numerous presentations across the
U.S. Needless to say, it has cost me many beers
over the years.
Second, was a series of power outages in our
area over the years that were weather related. It
pointed up to me how dependent we had
become on electricity supplied from the “grid”.
Even our beginning steps years back were good
enough to allow us to keep lights on, run a
minimal amount of appliances, and survive a week long power outage by using solar panels,
battery backups, and inverters.
Slowly but surely, over the years, we have continued adding more and more solar to both the
home and the business properties. At times, we are generating more electricity that we actually
need. It is a joy to see the electric meter actually running backwards at these times. On a monthly
basis, typically, we have cut our electric usage from the “grid” in half.
My son and I have enjoyed discussing the energy projects we have tackled over the years, but
more importantly, we hope to provide the people here in Kentucky who are interested in solar
with both information and encouragement.
In a series of presentations hosted by the Kentucky Solar Energy Society the following topics will
be covered.....
Presentation Topics
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Electric Energy Basics
Solar Cells
Solar Panels
Types of Solar Power Systems
DC versus AC
Inverters for AC Generation (Types and Uses)
Energy Budgets (Determining Energy Needs)
Practical Solar Systems?
Saving Money (Return on Investment)
Getting Energy Efficiencies
Where to Find Help
Two dates and two locations have been set so
far:
Thurs. Feb. 18, 2016 7 p.m. to 8 p.m.
Boone County Public Library
1786 Burlington Pike
Burlington, KY 41005
Sat. Mar. 26, 2016 11 a.m. to 1 p.m.
Jessamine County Public Library
600 South Main St.
Nicholasville, KY 40356
The events are free, so come and join us. For
more information, contact Don Adams at [email protected]
Solar Over Louisville Going
Strong
By Nancy Givens, Avery and Sun Solar
Installations
The Solar Over Louisville (SOL) campaign
continues to move forward, with new members
and attention by media. The Louisville Metro
Council has awarded the campaign a
Neighborhood Development Grant funding to
make it possible to hire a part-time Program
Manager. An Advisory Council is being formed
to engage the leadership of agencies and
community members across Louisville in
strengthening the mission and helping to
achieve the goals set by the campaign, and will
meet quarterly. And a committee has been
formed to plan a launch event. The Butchertown
Market, which is fully powered by solar energy,
is being considered as a possible venue for this
event (see photo.) For anyone interested in
becoming involved contact Wallace McMullen,
SOL Planning Team Chair, at 502-2717045, [email protected] To learn more, visit the
Lousiville Sustainability Council website.
Welcome
New Members!
Since our previous newsletter, the
following have joined KySES:
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Whayne Supply, Steve Killian and
TracyKnapp - Contributing Member
Level
Graybar, Will Johnson - Contributing
Member Level
Rolf Provan
Steven Roby
Thanks so much to these fine folks and to
our renewing members as well! Our
membership is very inexpensive and
important to help educate and promote for
solar energy in Kentucky!
You can join both KySES and ASES,
including a subscription to Solar Today
magazine, for just $60 annually. Click here
for this special offer, and pick Kentucky as
your chapter in the check-out process.
Board of Directors
The following individuals are KySES board
members. Feel free to contact any of us with
suggestions and feedback.
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Theresa Martin, Chair
Don Adams, Vice-Chair
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Amy Waters, Treasurer
Theresa Martin, Secretary
Josh Bills
Dave Butler, Director-At-Large
Daryl Cleary, Director-At-Large
Nicholas Johnson, Director-At-Large
Upcoming Events
Upcoming Events
(For details, go to Events)
Feb 7 - Kentucky Conservation Committee
Annual Meeting - Louisville, KY
Feb 7 - Solar Over Louisville - Clifton
Unitarian Church Louisville, KY
Support Solar with a License Plate!
As a solar advocate, would you like to show your
support with a solar themed license plate? We
need your help to make this available to
everyone. We have gathered over 300 signatures
and need just 600 more to be able to petition for
our very own Kentucky solar plate! Sign up
here!
Feb 18 - Solar Presentation #1- Burlington,
KY
Mar 1 - Clean Energy Lobby Day #1 Frankfort, KY
Mar 9 - Clean Energy Lobby Day #2 Frankfort, KY
Mar 26 - Solar Presentation #2 Nicholasville, KY
Find us on Facebook
Contact email: [email protected]
KySES Memberships are very affordable!
$20 for individuals or $10 for students.
Business memberships are $100 to $500.
Visit www.kyses.org for details!
Thanks to our Sustaining Partner Members
Copyright © 2015 Kentucky Solar Energy Society. All rights reserved.
KySES is a chapter of the American Solar Energy Society (www.ases.org) promoting efficiency, conservation and renewables in
Kentucky.
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