ORIGINAL REPORTING: How Solar Growth Makes Rate Design And Incentive Debates More Complex
As solar matures, rate design and incentive debates grow ever more complex; The newest national solar policy update finds policymakers considering more detailed programs to compensate DER owners and cover grid costs
Herman K. Trabish, May 23, 2017 (Utility Dive)
Editor’s note: New strategies are emerging but the battle between utilities and New Energy advocates goes on.
From the beginning of this year, distributed energy policy action showed legislators and regulators around the U.S. stepping up their game. There were 134 policy actions on distributed energy resources (DERs) in 40 states during the first quarter of 2017, making clear that interest in the sector was high from utility commissions and state legislatures. Debates about net metering, the typical compensation mechanism for distributed solar, continue in a number of states. But the emerging trend is toward more complex rate design and DER compensation proposals and more cautious steps forward from utilities, according to The 50 States of Solar: Q1 2017 Quarterly Report.
New, granular analyses of customer behaviors allow policymakers to propose detailed rate design reforms that send more precise price signals. But those new designs are raising new questions because complicated rate schemes can confuse customers. There is a tension between whether the price signal should be more precise or simpler and easier for customers to respond to. The led to an emerging trend toward pilot programs that will test the innovative rate designs. There were five pilot proposals in Q1 2017 that followed six in Q4 2016. Their outcomes will likely be noticed nationally and help policymakers address the complexity of new rate designs… click here for more