PSB finalizes new net metering rules

Alex Wilson
Green building advocate Alex Wilson keeps a plug-in hybrid car and has a solar array on the barn at his Dummerston home. Photo by Mike Faher/VTDigger

The Public Service Board has finalized new rules that it says are meant in part to slow the pace of solar development under the popular electricity net metering program.

The changes could make the program less lucrative for small-scale producers and may largely prevent the use of undeveloped land for larger installations that employ the program, for which projects larger than 500 kilowatts aren’t eligible.

Regulators, environmental advocates and some solar developers greeted the changes with measured approval this week, citing several last-minute revisions the board made in response to public comments.

Net metering allows electricity customers to receive payment from utilities for renewable energy they generate in excess of what they use.

The program has paid a much higher rate than what wholesale electricity generators receive. That has led to tremendous success in putting new renewable generation on the ground in Vermont, the board said in its order making the revisions.

The new rules will pay significantly less to producers of new small-scale (up to 500 kilowatts) renewable energy projects than what’s earned by those built under current rules. And the program will be open largely to developers willing to build on landfills, rooftops, gravel pits and other previously disturbed locations rather than open land.

The PSB released its final draft of the revised rules about six months after a deadline set by legislators who hoped to review them during this year’s session, but repeated public vetting and revisions made in response pushed the board past its deadline. Officials at the Department of Public Service said it was worth the wait.

“I admire the board’s diligence on this project,” said Deputy Commissioner Jon Copans. “They had significant challenges in crafting this rule. In my mind this continues and builds upon what’s been an enormously successful net metering program and incorporates important and significant changes I think will serve Vermonters well.”

McKnight Farm solar
Solar panels on the McKnight Farm in East Montpelier make use of the state’s net metering program. Photo by Roger Crowley/for VTDigger

One major positive change, said Copans, involves the preference given to development in what is known as built environments such as landfills, rooftops, brownfields and unused gravel pits.

The rules allow projects of up to 500 kilowatts — the largest the program supports — in such preferred locations. Net metering will not, however, remain an option for developers who wish to build projects larger than 150 kilowatts outside preferred locations.

An acre of solar panels can produce roughly 150 kilowatts under normal conditions.

Developers, businesses and homeowners who build projects in preferred locations will receive higher rates than those who build on undisturbed land for the electricity they sell back to their utility. Copans said this appears to have already stoked interest among solar developers.

“People are out there now looking for old landfills and brownfields to do these projects,” Copans said.

Some solar developers say they’re pleased with the revisions, which will take effect Jan. 1.

“I think this new program strikes a really fair balance for customers across Vermont — whether they’re businesses or homeowners — who want to go solar,” said James Moore, co-founder and co-president of SunCommon.

James Moore, co-founder of SunCommon, celebrated the company’s 1,000th home solar installation at a home in Barre Town in 2014. File photo by John Herrick/VTDigger

The revised rules will let existing net-metering customers continue to pay monthly service fees with credit for their excess generation. New net-metering customers will be able to use the credits only to offset electricity use, not the capital or other expenses that utilities fund with monthly customer fees.

“They’ve honored the deal that Vermonters who’ve gone solar in the past were counting on,” Moore said. “It’s important that state policymakers don’t pull the rug out from Vermonters who have invested in our clean energy future.”

Because the program disallows larger (150 kW to 500 kW) projects outside preferred locations, Moore said, it could have a disproportional effect on solar development companies that specialize in that scale.

That provision might also limit the ability of schools or municipalities to build solar generators appropriate to their needs, he said.

The revised program “really prioritizes small solar,” which forms the backbone of his company’s business, Moore said.

The state’s biggest utility said it likes the revisions.

“We think it’s good,” said Kristin Carlson, spokeswoman for Green Mountain Power. “We’ve always been supportive of net metering and of empowering customers to generate and use their own electricity.”

Cheaper net metering could reduce the cost of energy, as it’s currently among the most costly energy sources available to Vermont utilities.

The program as described in the board’s order appears to encourage further net-metered development, Carlson said.

A representative of the Vermont Public Interest Research Group said the new rules incorporate important and recent changes made in response to comments from the public.

Ben Walsh, the group’s climate and energy program director, said those include the provision preserving current net-metering customers’ option to pay off their entire bill using credits.

Ben Walsh, an energy advocate with VPIRG, stands outside before a hearing in September 2013. Photo by Andrew Stein/VTDigger
Ben Walsh, an energy advocate with VPIRG, stands outside before a hearing in September 2013. Photo by Andrew Stein/VTDigger

A previous draft of the rules drew vociferous opposition.

“The board clearly heard the concerns of Vermont consumers and made the program substantially better than the last draft,” Walsh said.

Although he expressed concern that the changes may slow solar development somewhat and make it difficult for municipalities and other large consumers, he called the revised program “definitely a step in the right direction.”

“In looking at what the board did with the new draft, it clearly indicates they’re listening to what Vermonters are telling them about solar energy,” Walsh said.

The program was established by Act 99, passed in 2014, and that legislation called for the Public Service Board to complete its revisions in time for legislators to review them while still in session. This year’s session ended in May. Copans said he also hoped for faster rulemaking but that the board was right to take its time.

“Sometimes getting things done quickly comes at the expense of allowing full public engagement and vetting,” Copans said.

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  • rosemarie jackowski

    Consumers better read the fine print very carefully. The PSB has not been on the side of ordinary citizens. See PSB Rule 7.609 which requires customers to pay for 24 hours of phone/internet service, even if they only receive one minute of service.

  • Annette Smith

    And for the public… this is a big step in the right direction. The PSB has been approving so-called net metered 500 kW projects built far from load, selling RECs, and without any customers lined up at the time the CPG is issued. The developers get 19 cents/kwh but it isn’t legitimate net metering. The PSB process for neighbors and towns to participate under the current process is arduous and since the PSB generally ignores public input anyway, is a frustrating waste of time. As one of the few people assisting citizens in participating in the PSB process, I will say that even with this improvement, the PSB is not the right place for solar siting. No other PUC in the country does siting. Vermont has a land use law called Act 250 that enables much easier and effective public participation.

  • Willem Post

    Mike P,

    It would be nice to have some hypothetical GMP electric bills of existing PV systems, and of what such GMP bills would look like for new PV systems, so people can actually see the numbers and the differences.

    GMP, et al., could easily provide examples of such bills to the public right now.

    • Bob Zeliff

      Yes, If the Digger would lay out precisley what the changes are, that would be greatly appreciated too.

      I could find none of that in th article.

    • Willem Post

      Mike P,

      I talked to my neighbor, who has 5 kW on his passive solar house. His PV system cost about 5 x $4000/kW = $20,000, less federal and state subsidies of about $8000 = $12000.

      He later added a heat pump from GMP to his two wood stoves.

      His annual electric bill (including paying off the heat pump) is near zero dollars, because his production is about 6,350 kWh/y, but his consumption is less than 5500 kWh/y, even with the heat pump, because he uses it for air conditioning in summer and supplementary heating in winter.

      His Efficiency Vermont charge is $1/month. All other charges, taxes and fees are almost zero-ed out.

      A very good deal indeed, courtesy of the other taxpayers and ratepayers.

      Too bad my roof is unsuitable.

  • Kevin Jones

    The PSB rules remain highly flawed and are a big step backwards for Vermont customers who want to “go solar.” The rules continue to have a $0.06/kWh penalty on customers who don”t turn their renewable energy credits (RECs) over to utilities like GMP. While this will slow the future out of state sale of net metered RECs, citizens, community groups and businesses who want to retain their RECs to reduce their own carbon footprint are unfairly penalized. Real community solar energy will be uneconomic. Companies that have been deceptive to customers about where the customers RECs go will likely continue to lead customers to believe they are going solar when they are not. The proposal also caps customers net metering at 500 kW which is nowhere in the law and unfairly discriminates against larger institutions who want to reduce their carbon footprint. Some customers are now locked out of buying more solar.

    • Willem Post

      You are talking about solar energy that is present for a few hours per day, is variable during these hours, due to cloudiness.

      To continue to coddle and subsidize such partially useful energy, is beyond rational.

    • Kevin, I plan to introduce a bill next session that would allow solar array owners to retire the RECs themselves (real community solar, VLS, Middlebury College, etc) while having that solar count toward VT’s portfolio and to receive the “adder”.

  • Jessie McIndoe

    Another clear indication that the PSB can’t do anything right. I hope the new legislative session squashes this and gives the PSB a good flushing out. The recent permit to build an unwanted solar mess in Morgan, after the citizens there clearly voted against it, shows that the current PSB is incapable and unwilling to work with the citizens of Vermont.

    • Willem Post

      Minter would be BAU, keep the same people in the same places to carry on Shumlin’s expensive, inefficient, government-controlled energy policies.

      The local people can vote as they like, but will not be heeded, because the Montpelier folks are on a mission to save the world at all costs.

  • NOT installing solar is a choice to continue burning natural gas and coal at an absolutely astonishing rate. A natural gas plant in Londonderry, NH, provides much of our electricity by burning 125 million cubic feet of natural gas every day. We have to stop that. I welcome any ideas for doing that. Solar and wind are very effective alternatives. So is conservation. But it will take a very, very large effort. Conservation cannot possibly do it alone. Nor can hydro power. Some anti-wind and anti-solar folks trumpet nuclear power. Is that our choice? Or do we buy the Koch Industries – Ethan Allen Institute lie that there is no climate change and there is an infinite amount of fossil fuel so we should just keep buying their CORPORATE INDUSTRIAL coal, oil, and natural gas? And what is this crap about “industrial” wind? Where do these people think their electricity comes from? “Non” industrial coal mines? “Non” industrial fracked gas toxic waste storage basins? Unicorn poop?

    • Willem Post

      Everyone taking energy from the grid consumes the same mix, about 50% gas, 25% nuclear, some hydro and bio, and a tiny % of wind and solar.
      It has to do with the speed of electro magnetic waves.
      Right now there is no wind and no sun.
      Where, pray tell, would the other energy come from to meet demand?
      Absent viable energy storage, wind and solar are supplementary at times, variable, unreliable, and non dispatchable.

      • Matt Davis

        Willem – It’s going to take a variety of sources here in VT including micro hydro at the community scale, biomass (wood) with co generation, and anaerobic digesters with co generation. I would also personally like to see the state utilities explore small scale nuclear plants, but I suspect there would be a tough time with public opinion and investment.

        In terms of these new net metering rules, it seems to be a step in the right direction. I am curious about the REC piece of this that Kevin Jones brings up as I have seen lots of differing opinions on this issue. It seems to me that renewable energy projects put RE into the grid, and as more projects that come on line, that means more RE. Right?

        • Willem Post

          GMP selling the RECs to out of state entities reduces GMP’s costs, which reduces rate increases for struggling households and businesses.

          Vermonters do not get credit for this RE, on a bookkeeping basis, and cannot count the RE towards goals, but that does not matter, because Vermonters know they are doing their part.

          Why be chestbeating about going for this or that goal, when you are doing your part and save some money at the same time?

          It is too bad Vermonters have to do some destroying of their environment to build these wind and solar systems.

    • Adam Haggett

      What is the incentive for me to buy and install my first solar panel?

      One kilowatt or less should still receive 20 cents a kilowatt,

      1 KW in the yard will help folks start the conservation conversation and promote electric equality,

      Our current Green Leaders don’t care about Vermonters,

  • Gordon Troy

    The whole idea of net metering has completely gone off the rails. The term “net” in this context means “free from all charges or deductions.” The program ignores the basic premise that irrespective of how much energy a consumer uses and how much energy a consumer consumes, in a grid tied system, the grid still needs to be paid for. Utilities spend a large amount of their revenue on maintaining that infrastructure and it needs to be paid for. People should be able to install solar on their rooftops to “offset” their consumption of electricity, install batteries to smooth the production with the use, and any excess goes to the power company. When the consumer has insufficient generation or battery backup, then it takes energy from the grid. The consumer should get a credit for the energy pushed into the grid at a percentage that is less than the consumption rate in order to offset the infrastructure costs borne by the utility to provide constant on availability of electricity.

    • Willem Post


      If a household is off the grid, it has to store its variable solar energy in batteries.
      From the batteries, the energy is distributed, in a steady manner, after conversion to 120 volt AC, to the house appliances, lighting, etc.

      If connected to the grid, the variable solar energy, after conversion to 120 volt AC, is sent to the grid. The house has a separate feed from the grid for its appliances, lighting, etc.

      The meter records the difference of production – less consumption = to the net quantity sent to the grid. That net quantity receives about 19 c/kWH from GMP, which it could have bought at on-peak wholesale for about 6-7 ckWh.

      That difference is charged to other users without solar systems.

      • Willem Post

        Gordon, revised comment:

        Homeowner roof-mounted PV systems are connected to the 220-volt AC line, that feeds energy into GMP’s meter. GMP bills the owner only for the metered energy. The feed-in reduces the Energy Charge on owner’s bills.

        If more solar energy is produced than needed, i.e., a surplus, GMP pays the owner about 19 c/kWh for the surplus; GMP could have bought that on-peak energy at wholesale for about 6 to 7 c/kWh.

        For NEW systems, all other charges, such as Service, Efficiency Vermont, Taxes, etc., will be calculated on the sum of solar production, plus the quantity fed through GMP’s meter, i.e., as if the PV system did not exist.

        For OLD systems, all charges continue to be reduced, which remains unfair to other ratepayers, because PV system owners use the grid at least as much as other ratepayers.

        The below URL shows sample diagrams of various ways of connecting a PV system to the grid.