ORIGINAL REPORTING: Beyond Net Metering To The Value Of Location

Beyond net metering: How location can help put a value on DERs; A new report outlines an algorithm that could help streamline value-of-solar processes

Herman K. Trabish, February 18, 2016 (Utility Dive)

Editor’s note: Since this story ran, efforts to find the best way to value the locational benefits of distributed resources like solar have accelerated.

In the 1990s, utilities and their regulators in a number of states across the country settled on retail rate net metering as a simple and convenient way to encourage the growth of distributed solar. It seemed like a good idea at the time — consumers would earn credits equal to the retail rate of electricity for any extra energy they exported back to the grid from their rooftop solar systems. For years, the practice allowed customers with rooftop solar to significantly cut their utility bills, enhanced the value proposition of rooftop solar, and allowed renewable energy to grow without a significant impact on utility finances. But in the past few years, the situation has changed.

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Now, solar advocates and policymakers across the nation are passionately debating whether the ‘rough justice’ of a retail rate net metering credit should still apply to today’s evolving distributed energy resources (DERs) market, and what more accurate valuation scheme for DERs would be. A key question in the debates is proper value of rooftop solar, according the Q3 2015 catalogue of U.S. solar policy decisions. Value of solar (VOS) studies date to at least 2006, according to Pace Energy and Climate Center Executive Director Karl Rabago who, as an Austin Energy executive, led one of the earliest VOS implementations. Refined calculations now make VOS “a forward-looking approach that recognizes the ad-hoc use of the retail rate for NEM was rough justice and [further] analysis is appropriate,” Rabago explained. Location-based value calculations are emerging as the next step in accurate solar valuation… click here for more

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