Editor’s note: This commentary is by Gerry Silverstein, who lives in South Burlington and has interests in individual, global and planetary health.
[T]he goal of solar panel-generated electricity in Vermont is to: (1) reduce society’s reliance on electricity generated from, primarily, fossil fuels and (2) be self-sufficient; i.e., decrease dependence on out-of-state suppliers of electricity.
In Vermont, a Green Mountain Power (GMP) customer who generates electricity from solar panels receives payment from GMP in two ways. First, for every kilowatt-hour (kwh) of electricity the customer generates AND uses, she will get paid 4-6 cents (let’s say 5 cents for convenience). Additionally, for every kwh the customer generates AND sends back into the grid, she will get 14.7 cents.
A hypothetical: A customer generates 600 kwh in one month from solar panels on their roof. She use 500 kwh and sends 100 kwh back into the grid. GMP will issue a credit for (500 x 5 cents) plus (100 x 14.7 cents) = $39.70 (say $40).
Like non-solar customers, net metering customers are charged the daily customer charge, the energy efficiency charge (EEC supports Efficiency Vermont) and the assistance fee (supports low income Vermonters). However, if they have excess solar credits they can use their credits to cover the daily customer charge (about $13 per month) and the EEC (about 1.3 cents per kwh).
In the above example where the customer drew no power from GMP, and sent power back into the grid, the only cost the customer would pay would be the monthly assistance fee ($1 per month). She would pay nothing (in actual dollars) to maintain the grid and nothing to support Efficiency Vermont. She would also have a positive balance that could be used to cover costs (including the daily customer charge) in months in which she required electricity from the grid. However, any credit balance disappears after 12 months: use it or lose it.
The rationale from GMP (and state regulators and legislators) is when a customer generates their own electricity for personal use, as well as sends some electricity back into the grid, they are (1) saving the costs that GMP experiences when it goes to the spot market to buy power (especially valuable during the summer when electricity on the spot market is most expensive), and (2) saves GMP money because there is less grid maintenance and expansion needed because there is less electricity purchased from external sources.
But what if there is another way to accomplish the same objective AND is less costly?
What about a customer who through a determined effort to be energy efficient reduces their monthly electricity consumption to 70 kwh (the average GMP customer uses about 600 kwh of electricity)?
One could argue that a customer who through energy efficiency reduces their monthly consumption to 70 kwh is a better investment than the solar panel generator of electricity who uses 600 kwh of electricity, of which 70 kwh comes from Green Mountain Power.
By not using 530 kwh of electricity (the difference between the average user and the low electricity customer), GMP does not have to purchase the 530 kwh every month on the spot market and its cost to maintain the grid will be diminished … at least to the same degree as the solar customer who generates (and uses) their own 530 kwh of electricity and gets paid for that electricity (at the rate of 5 cents per kwh).
Indeed, one could argue that a customer who through energy efficiency reduces their monthly consumption to 70 kwh is a better investment than the solar panel generator of electricity who uses 600 kwh of electricity, of which 70 kwh comes from GMP. In this example she generates (from solar panels) and uses 530 kwh so gets a credit of 5 cents x 530 = $26.5, an amount that will cover (1) the 70 kwh they get from GMP (at about 15 cents per kwh, that is about $10), (2) their monthly access fee (about $13) and (3) their EEC (about $1 for the 70 kwh they get from GMP).
The reason for the non-solar customer being a better investment is that the non-solar customer is contributing to the upkeep of the grid and contributing to energy efficiency programs statewide. In addition, energy is required to produce solar panels, install them, and dispose of them at the end of their lifespan. A non-solar low electricity user would not be a source of any of those energy consumption events, nor the costs of the solar panels that are subsidized at state and federal levels.
Is there precedence for rewarding reduced use of energy, just as electricity generated from solar (and wind) is rewarded? Clearly those who advocate for a carbon tax believe in this policy. A carbon tax program punishes high-energy users, and rewards low energy users.
Health insurance companies and private employers are now rewarding individuals who reduce their weight and/or stop smoking with lower premiums (reduced premiums are specifically allowed by the Affordable Care Act). In essence they are rewarding individuals for adopting lifestyles that will generate lower health care bills.
So why not reward low usage of electricity? There are a number of possible explanations. First, there are only a few customers who are low electricity users, so why bother setting up a complex program for a small number of individuals? Well, if the average customer uses 600 kwh per month, that must mean there are many customers using less than the average. Additionally, if the state/GMP rewarded customers who use less with real dollars, then maybe … just maybe more people would actually use less.
A second reason there is currently no reward system in place for low electricity consumers is there is no lobbying/advocacy organization to petition the Legislature, the Department of Public Service and the Public Service Board to understand the value of financially rewarding low electricity use. In addition, it is unlikely that low electricity users have rich and powerful friends in high places who “get things done” when financial gain is available.
A recent New York times editorial entitled America the Unfair? (http://www.nytimes.com/2016/01/21/opinion/america-the-unfair.html?_r=0) by Nick Kristof detailed a study by researchers at Princeton and Northwestern universities. The authors examined 1,779 policy issues and found that attitudes of wealthy people and business groups mattered a great deal to the final outcomes, but that preferences of average citizens were almost irrelevant.
If the goal of energy policy in Vermont is to: (1) reduce our carbon footprint by reducing fossil fuel use and (2) become less dependent on external suppliers of electricity, then why does the state/GMP not reward low electricity users as it does those who generate and use their own electricity. Is this not a form of discrimination, rewarding one class of individuals while marginalizing a second class of citizens who are contributing/achieving the same statewide objective that the state/GMP is financially rewarding the first group of individuals for?
It is true that those who generate electricity from solar panels AND send some of what they generate back into the grid are contributing more than the low use non-solar customers. Nonetheless, it would seem a great deal of justification remains for rewarding the low electricity user who is accomplishing many of the goals that originally led to the financial rewards associated with net metering.
