By Sophia Ricco and Bethany Smith
A new plan, announced by The New York State Public Service Commission, will change the way solar panel owners are compensated for their excess energy. The plan, announced two weeks ago, will likely result in solar customers receiving less money back, Charles DiStefano from Long Island Power Solutions said.
“It is the worst thing the state has ever done to solar energy,” DiStefano said. “I am not saying that lightly or jokingly, and it threatens to bring solar sales down tremendously in the future as it’s implemented.”
Until now, the solar compensation plan has included a system called Net Energy Metering. If your solar panels produced more energy than you were using in your home, you could connect to the electricity grid and receive the full retail price for that electricity back.
“[The electric companies] have been pushing to get rid of Net Metering because they say it offers an unfair advantage that is given to solar customers at the expense of the other customers who don’t have solar and at the expense of the utility,” Gordian Raacke, the executive director of Renewable Energy Long Island, said.
“There is enough solar getting installed right now that it’s a big enough chunk of the grid that they have to start thinking about how it’s going to fit in and affect the rest of the power balance that they have to maintain,” John King from YSG Solar said.
The new system called Value of Distributed Resources (VDER) compensation still allows you to receive credit for your unused energy, but there is a system in calculating how much you will receive based on your locations and the time of day and year.
“Instead of having the amount of kilowatts roll over to the next month, you’re having the net value, say like 30 dollars, roll over,” Nick Wejcehrt, the Chief Engineer for GreenLeaf Solar said.
The electric companies were crediting the full amount that someone would pay for electric back to them, but since the price of electricity is for more than just using it, receiving the full credit seemed unfair to those companies and non-solar customers. Some of the price paid to use electricity goes to maintaining the grid, so simply putting power pack into it didn’t justify the credit, Raacke explained.
“The Commission’s order is an important first step in moving beyond ‘net metering’ (NEM) to an improved compensation system that recognizes the full and accurate value of DER, taking into account previously unquantified values including location and environmental benefits,” a press release from the commissioner’s office said. “It establishes the first phase of a multi-year effort to create a more market-driven approach to optimizing the use of clean, distributed energy systems.”
This is the first change to be made to the solar compensation system since the Net Energy Metering system began in 1997.
“This VDER change is big. It’s probably the biggest thing to happen in solar in the state in years,” DiStefano said.
There is fear that the new system will dissuade customers from investing in solar since the payback won’t be as large. The state has put off implementing this with residential customers until November 1st, but it will go into effect with commercial customers immediately, DiStefano said.
“Commercial contracts have dropped dramatically in New York State, even here in PSEG territory because no one even really knows what the value of the VDER even is.” DiStefano said.
“Having clean power is good for everyone who breathes air,” Raacke said. “ The fact that the customer is not using our atmosphere to dump carbon dioxide and other pollutants into, that has value too and that should be considered.”
Solar companies are now just waiting for more information about the system. “Until we know what the value is and what the exact formula is going to be, we can’t say whether this is going to be a good deal for solar customers,” said Raacke.