New IREC Report on Standardizing Valuation of Solar Generation

The Interstate Renewable Energy Council (IREC) has just published a report on the power company attack on net metering.  The report advocates establishing a single standard for analyzing the costs and benefits of distributed solar power generation.

Rapidly expanding solar power generation has frightened the corporations that control the US electrical system.  The industry is beginning a push to add extra fees to solar producers, because power companies claim that net metered customers do not pay for the costs of infrastructure that they are using to sell electricity back to the grid.

Here’s how the blog post describing the report puts in on the IREC Web site:

While the ultimate value of distributed solar may vary from place to place, the basic properties of solar generation and distribution grids are largely consistent everywhere.  However, the assorted studies and calculations used by utilities and states have varied substantially in their approach in determining which assumptions and variables are appropriate to consider.  This is where some perspective and standardization could really come in handy.

The three main conclusions of the report are:

• DSG [distributed solar generation] primarily offsets combined-cycle natural gas facilities, which should be reflected in avoided energy costs.
• DSG installations are predictable and should be included in utility forecasts of capacity needs, so DSG should be credited with a capacity value upon interconnection.
• The societal benefits of DSG policies, such as job growth, health benefits and environmental benefits, should be included in valuations, as these were typically among the reasons for policy enactment in the first place.

West Virginians already pay a “customer service fee” of $5 every month on top of the charges for electricity they actually use.  For that reason, net metered solar power producers can never have a zero electric bill.  Even if they are selling as much power as they are buying back to a WV power company, they will always pay that $5 per month.

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