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Next Generation Solar Framework

Value of Solar to Ratepayers and Society

An important first step in setting policy for local solar generation is to understand the value, or benefits, solar provides to the grid and society. In Massachusetts, Acadia Center’s Value of Solar analysis found that the value of solar to ratepayers is 22.4 cents per kWh, and additional societal benefits like reduced GHGs and cleaner air provide an additional 6.7 cents per kWh.

Grid and Societal Value of Solar Photovoltaics (PV) in Massachusetts – 25-year Levelized Cost (2014$)


Next Generation Regional Solar Framework Graph

However, knowing the value of solar does not give all of the information needed to design an ideal policy. To achieve a consumer-friendly local clean energy future, a number of considerations must be balanced: legitimate ratepayer concerns, the needs of the solar market, and the costs of implementing new metering and billing systems.

Aligning Net Metering Credits with Ratepayer Value

Acadia Center’s Value of Solar studies, and many others, indicate that the ratepayer value of distributed solar is greater or equal to the retail rate of electricity. In other words, retail rate net metering is generally a fair policy that provides net benefits to ratepayers and society. However, as solar PV grows, balanced reforms that account for both long-term system benefits and costs to the grid are needed.

In the short term, adjusting net metering credit value is the best path forward. Adjustments can be applied to certain categories of projects, such as larger projects where any imbalances are more significant, and existing projects can be grandfathered under current frameworks. Changes can be incremental, while at the same time improving economic efficiency. Key concepts include the following:

 

More details are available in the document at the bottom of the page. Better aligning net metering credits with ratepayer value should also facilitate expansion or maintenance of virtual net metering and community shared solar policies by addressing arguments about cross-subsidies.

Minimizing the Cost of Incentives

Additional incentives for solar can be benchmarked to the societal benefits of distributed solar generation, but should be structured to minimize the additional cost necessary to build different types of projects. Additional key design features include:

 

Over time, these incentives should be integrated into broader frameworks for promoting renewable energy – e.g. Class I renewable portfolio standard policies.

Conclusion

Local solar generation provides net benefits to the energy grid and society, and a balanced framework can ensure a vibrant solar market and reduce overall costs.

 

 

Joint Comments on Massachusetts’ Utilities Gas Procurement

Acadia Center Testimony in Support of Carbon Pricing Bills S.1747, S.1786 and S.1748

Charging Up

The Future of Brayton Point

Value of Distributed Generation- Solar PV in New Hampshire

What’s Next for RGGI?