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Fitch Ratings: Net Metering Can Destabilize Entire Utility Industry

Attention everyone concerned about the potential for net metering to completely upend power utility business models: Buckle up, because net metering is taking off.

Customer adoption of net metering policy has grown fast, according to Fitch Ratings’ new report Running Backwards: Net Metering Short Circuits Electric Sales, and has become a “small but rapidly growing component of total retail electricity sales.”

But despite the near-apocalyptic alarms raised by utilities in states like California, Colorado, and New Mexico, excess generation sales sold back to utilities through net metering made up just 0.01% of total retail sales in 2012 – raising the question: Are utility fears overblown?

Smokestack demolition

Coal power plant demolition image via Shutterstock

Net Metering Powers Residential Solar PV Growth

First, a bit of background on what exactly net metering is, and what it does. Net metering is a policy where customers who have their own electricity generation facilities interconnected to the power grid are paid by their local utility for the energy they produce but don’t use and send back the grid.

Nearly every state has some form of net metering, and each one has different rules governing how much power can be sold back to the grid and the rate customers are paid for excess electrons.

The net effect of net metering has been a dramatic uptick in residential solar installations. Fitch reports net metering customers have increased at a 46.7% compound annual growth rate, with solar photovoltaic generation representing 85.8% of all electricity sold back to utilities through net metering in 2012.

Even more interesting, residential solar customers made up approximately 90.7% of all net metering customers, super-charging the rapid growth of solar PV systems across America. This trend is especially true in California, where two-thirds of residential installations under the California Solar Initiative program are third-party owned, and home to the three top net metering utilities by customer.

Top 10 net metering utilities

Top 10 net metering utilities chart via Fitch Ratings

In addition, new types of investor financing like SolarCity’s $ 54 million securitization is opening up entire new capital investment markets and funding new distributed solar installations while removing residential consumer cost barriers.

This means solar has truly become democratized for residents across many of the fastest-growing solar markets in America, strengthening public support against fossil-fueled efforts to roll back state renewable energy targets while adding thousands to home resale values.

Policy Fixes Could Prevent A Utility Death Spiral 

So on balance, does net metering equal a “utility death spiral,” as so many claim? Fitch reports that even though it has grown fast, net metering “has a minimal impact on retail sales,” and residential consumers are incentivized to participate in net metering by the high retail electricity prices charged by utilities.

Since more and more net metering customers means more and more distributed generation resources, and thus, less need for utility-scale centralized power sources and transmission lines, Fitch says the policy “can destabilize the entire utility industry.” Yikes.

However, solutions do exist to help utilities and net metering coexist. Fitch recommends regulators regularly adjust prices and cost-recovery mechanisms, along with creating caps on annual and aggregate net-metered installations. Taken together, net metering may just continue to fuel solar’s surge across America…without killing off the country’s electrical utilities.

Fitch Ratings: Net Metering Can Destabilize Entire Utility Industry was originally published on: CleanTechnica. To read more from CleanTechnica, join over 30,000 other subscribers: RSS | Facebook | Twitter.


OIL SPILL SOS – Trinidad & Tobago Express

Trinidad & Tobago Express
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HMS Protector: Early Christmas in Antarctica – BBC News

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Capt Rhett Hatcher, said it was a "truly unique privilege" to spend Christmas in Antarctica. HMS Protector sailed from Portsmouth in October, travelling to the Antarctic peninsula via Cape Verde, Rio de Janeiro and South Georgia. The 5,000-tonne ship's
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Extreme weather causes odd mix around the nation –

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First Solar Installed European Capacity Reaches 4 GW With New 48 MW Deal

First Solar, one of the world’s leading solar companies, announced Wednesday that it had been awarded a contract to provide 48 MW worth of thin-film photovoltaic (PV) modules for four French solar energy plants.

As a result of this latest award, First Solar’s total installed capacity in Continental Europe now exceeds 4 GW, powering approximately 1 million homes and displacing an estimated 1.2 million metric tonnes of greenhouse gases each year.

The four projects are owned by French renewable energy company Photosol, and are being constructed in the country’s Auvergne and Midi-Pyrénées regions: three of the plants — worth a total of 37MW —  are located in the communes of Dompierre sur Bresbe, Gennetines and Marmanhac, while the fourth facility is being built in Sarrazac and will total 11 MW.

“As France actively promotes the adoption of solar energy, these projects will contribute towards the country’s efforts to diversify its energy mix. We expect these projects to make a significant local impact by providing communities with clean energy and contributing significantly to Europe’s CO2 reduction goals,” said David Guinard, Managing Director of Photosol. “Our choice of First Solar’s thin-film modules was based on a combination of cost-competitiveness, unrivalled bankability, the ability of its modules to reliably deliver solar power and the fact that the technology has the smallest carbon footprint, with the fastest energy payback time.”

Each of the power plants have been specifically designed to be as low-impact as possible on the local environment and communities. Three of the power plants are to be built on existing pastureland, but will allow landowners to continue grazing their livestock at the site, while the fourth site is situated near an oak forest and includes in its design access for wild animals.

“These projects are an excellent example of how France, like other parts of Europe, can diversify its power generation portfolio and achieve energy security by maximizing the use of available land and leveraging its most abundant energy resource — sunlight,” said Luis Pedro Marques, Managing Director of Jayme da Costa Energie. ”We are proud to have been part of effort and look forward to continuing our partnership with Photosol and First Solar.”

“These projects collectively represent a significant boost to Photosol’s installed capacity as this young, dynamic company continues to build on its successes,” said Stefan Degener, First Solar’s Director of Business Development for Europe. “I would like to thank our partners at Photosol and Jayme da Costa for the trust they’ve placed in us; their decision to use our advanced thin-film modules is testament to the technology’s suitability to utility-scale solar power plants in a wide variety of conditions.”

First Solar Installed European Capacity Reaches 4 GW With New 48 MW Deal was originally published on: CleanTechnica. To read more from CleanTechnica, join over 30,000 other subscribers: RSS | Facebook | Twitter.


Australia to monitor Japan’s Antarctica whale hunt by plane, not ship – The Guardian

The Guardian

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