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.”
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.
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.
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.