Community Net Metering Proposal Brings Solar Within Reach

P1000653By Whitney Files

Distributed solar energy has been growing by leaps and bounds in the U.S., with 65 percent growth among residential installations in 2013 alone.

However, low-to-moderate-income (LMI) households in New York state have been mostly left behind for two significant reasons: 1) lower income levels make it difficult for LMI residents to benefit from tax credits or low-cost financing; and 2) LMI residents often rent their homes (46 percent of renters nationwide have incomes below $30,000). This is unfortunate, as lower-income residents spend a greater proportion of household income on electricity bills — as much as 7 percent to a whopping 29 percent of annual income (PDF).

Luckily, an innovative solution is on the horizon in New York called community net metering. This model may allow LMI residents to benefit from the cost savings of distributed solar energy projects.

What is community net metering?

Community net metering, also known as shared renewable energy, allows multiple customers (e.g. — households, businesses, etc.) to buy into a larger renewable energy system, such as a solar photovoltaic (PV) array, and to benefit directly via cost savings in their utility bills. A host organizer manages the project, enrolls members, and acts as a liaison with the utility company. Energy credits from the system are distributed via individual utility bills.

The shared or community net metering project translates into a direct financial benefit for participants, while providing a cleaner, greener energy source. Community net metering has the potential to open up solar PV to many more customers, in particular those who have not been able to qualify for financing or who lack a convenient sunny location to install solar panels.

What’s the New York proposal?

On March 6, the Public Service Commission of NY (PSC) hosted an open meeting to discuss a new proposal for community net metering projects, which was issued on Feb. 10. The Community Net Metering Straw Proposal is a set of 15 rules that may eventually provide the legal framework for shared renewable energy projects in New York state.

PSC staff looked to a number of states for inspiration, including California, Massachusetts, Vermont, Colorado, Minnesota and Delaware. Taking up just under a page and a half, the rules cover such aspects as project size limits (2 megawatts), time limits on the usage of energy credits (one year), and location requirements (members must be located in the same utility service territory as the net metered project). It also offers some instructions for the host organizer, which can be an association, town, commercial entity or project developer that coordinates between the utility and the members.

Could this help lower-income residents?

This program is an exciting step forward for advocates of renewable energy in New York, as the proposal may allow community members who haven’t yet been able to install or afford solar PV to get in on the action. Through the New York community net metering proposal, renters would have the ability to buy into a shared renewable system, bypassing their landlords. And for the responsible landlord who wants to go solar, shared renewables can provide a framework to share the costs and benefits of a solar PV system with their tenants.

The proposal presents a crucial opportunity to create rules that will address LMI household needs. There are a number of provisions that could be incorporated to promote this, including:

  • Anchor tenants: Allow one to two members to “own” up to 50 percent of system capacity, and require or encourage the remaining capacity to be owned by residential or small business members (for example, maximum of 25 kilowatts each). This will make it easier to obtain financing for community net metered projects by pooling the risk between “higher risk” residents with lower incomes or low credit scores, and “lower risk” anchor members, such as a local institution or business.
  • Consumer protections: Ensure that the Public Service Commission or other entity provides oversight so that project developers do not take advantage of members, particularly residential households with limited understanding of the policy.
  • Outreach support: Offer accessible information and funding to support communities that wish to explore shared community net metering projects.

What can you do? Have other ideas for how to make shared solar accessible to all New Yorkers? You can submit public comments to the PSC. Read through the Community Net Metering Staff Straw Proposal, and email your comments, questions and suggestions to the secretary@dps.ny.gov by March 31.

Image credit: Flickr/CoCreatr

Whitney Files is a Bard MBA in Sustainability Candidate (May 2015, expected graduation). You can follow her on Twitter @WhitneyFiles.

The Bard MBA in Sustainability focuses on the business case for sustainability. We train students to see how firms can integrate economic, environmental, and social objectives, the triple Bottom Line, to create successful businesses that build a more sustainable world. Graduates of the Bard MBA Program will transform existing companies, start their own businesses, and pioneer new ways of operating that meet human needs, while protecting and restoring the earth’s natural systems. The Bard MBA is a low-residency program structured around “weekend intensives” with regular online instruction between these residencies. Five of these intensives are held each term: four in the heart of New York City and one in the Hudson Valley. Residencies take place over four days, beginning Friday morning, and ending Monday afternoon. Learn more today.