Net Metering fair pay

We are finishing up a GreenBuilt NC home in Asheville and got our permits and started the process to add a 4kw Photovoltaic (PV) system.  At the same time this news came from Duke who is our electric provider.

“At the center of the thrust is a desire to change the rules to pay residential solar homeowners wholesale rates of 5-7 cents/kWh, rather than retail rates of 11 cents/kWh. “Why are we paying more? Eventually customers pick up that tab,” said Randy Wheeless, PR manager for Duke Energy. “We think we’re paying too much, and we think that needs to change.” Randy is talking about net metering.

“Net metering allows electric customers who generate their own electricity using solar or other forms of renewable energy to bank excess electricity on the grid, usually in the form of kilowatt-hour (kWh) credits. These credits are used to offset electricity consumed by the customer at a different time during the same billing period (i.e., when the customer’s system is not generating enough electricity to meet the customer’s needs). In effect, the customer uses excess generation credits to offset electricity that the customer otherwise would have to purchase at the utility’s retail rate.”  

This of course was a bit of a kick in the financial gut. Duke had supported the Renewable Portfolio Standard in the political battle during the last election and I assumed they were behind the new world that is emerging that would be run on renewable sources as a means to more energy security and as a way to address climate change that fossil fuels are fostering. They do have on their website “We believe generating electricity from renewable resources will play an increasingly important role in the transition to cleaner energy.”

My attitude was Naïve I admit. Duke is looking to maintain its profit base as it does the business of providing electricity to over 7 million customers. Admittedly a big job. This is how they describe their job (underline is mine).

“Our core mission is to provide affordable, reliable, increasingly clean energy — in safe and sustainable ways — to our customers 24/7. Today’s Duke Energy serves 7.2 million retail electricity customers in six states in the Southeast and the Midwest. We also serve 500,000 natural gas customers in Ohio and Kentucky. “

So how are they doing?

“Duke Energy’s total shareholder return was approximately 32 percent, significantly outperforming the 17 percent return of both the S&P 500 and the Philadelphia Utility Index (UTY), a composite of 20 U.S. utilities.

To their credit the HERO Program is great for new builders and makes energy efficiency affordable.  They also have other rebates and incentives for energy saving.

On the other hand Duke gets over 60% of its energy from burning coal. Coal is the biggest single fuel contributor to greenhouse gases not to mention many other air borne pollutants.

From the American Lung Association – The Healthy Air Agenda   “Coal-fired power plants are a major source of hazardous pollutants and the single largest producer of greenhouse gasses. Many of these pollutants, such as mercury, benzene, dioxins, arsenic, and lead, can cause cancer and cardiovascular disease; harm the kidneys, lungs, and nervous system; and even kill.“

And that does not include the coal ash problems that Duke in now being forced to deal with thanks to the non profit Southern Environmental Law Center and the attention brought to the pollution problem caused by the coal ash dump basins by Appalachian Voices in Boone, Waterkeeper Alliance Inc.,  Sierra Club, NC Riverkeepers , WNC Alliance and others.

Net metering and rooftop solar, while not a silver bullet, is one tool that should be used to promote renewable energy with the benefit to all of Duke customers of less pollution, more resiliency during storms and less need for upgraded grid infrastructure. There is currently no definitive study of the costs and benefits for distributed renewable energy to the grid in financial terms much less in terms of pollution and carbon avoidance or resiliency.  According to Solar  Energy Industries Association (SEIA) “Customer-sited solar generation offers many benefits to the electric grid system and by extension to non-solar customers, including but not limited to: reduction in utility energy and capacity generation requirements, reduction in system losses; avoidance or deferral of distribution and transmission investments; localized grid support including increased reliability benefits; fuel-price certainty; and reductions in air emissions and water use.  The aforementioned benefits should be quantified, and solar customers should be adequately compensated for the value their solar energy is delivering to the grid.[3]” 

With the evolution of a smarter grid and smarter homes the equation of costs and benefits will change. This is a hard prediction to pin down. How much will cheaper and more efficient storage for surplus energy play into the benefits?   Will our economic system finally include carbon pollution in its accounting? As someone somewhere said,” We don’t question when we pay to put our household waste in the county landfill why are we so resistant to putting a price on our carbon waste?”

I have no idea where Randy Wheeless, PR manager for Duke Energy got his net metering pay at 5-7 cents. He does not site any information  What is the message that lowering the pay for net-metered systems sends? What if the real number is 10 cents instead of 5-7 cents ?  I imagine Randy is putting a lowball number out there to see what the reaction is. I hope it is loud.

Rocky Mountain Institute has a good related article – A Review of Solar PV Benefit and cost Studies