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Getting Grandfathered

Paul Kando

A new PUC rule would grandfather all existing net-metering utility customers with solar photovoltaic panels on their roofs, and any who install a solar system before January 1, 2018, for 15 years. Their net metered credits would stay as they are today. However those who wait until 2018 to install solar panels would see the credit gradually reduced over time.

Solar panels on a lovely home in Rockport
photo credit: Revision Energy

New utility customers who install solar over the next 10 years would have the credit on the transmission and distribution portion of the electric bill gradually decreased. For instance: After January 1, 2018, a new net-metered customer would be credited 90% on the transmission and distribution portion of his/her bill, each year, for 15 years. Full credit would still apply on the supply portion of the bill. The new rule would apply only to solar installations at people’s homes. Larger-scale “community solar projects”, in which homeowners may buy shares, are not affected.

Net metering is a decades-old rule based on 1970s federal legislation. It requires utilities to credit the electric bills of small energy generators at the full retail price of all the electricity they send into the grid. These homeowners continue to be credited as long as they supply the power. In Maine this arrangement has been the rule since the 1980s and helped jump-start solar when the technology was new. But panel costs have fallen in recent years and are projected to drop more in the near future.

Therefore utilities and some policymakers say it’s time to reduce the credit. As solar’s popularity grows, they say, the payments are shifting the cost of serving homes and small businesses with solar panels onto other customers. Not true: according to a 2015 study published by the PUC documented that the value of solar electricity produced in Maine is actually greater than the cost of electric service, and thus it is a net benefit to the power grid.

As long anticipated, the Legislature is stepping in. Aided by clean-energy advocates, the utilities and others, lawmakers have drafted several bills this session dealing with various aspects of solar energy, including net metering. However, often overlooked in this debate is the fact that home-based solar systems are financed 100% by their owners and the excess electricity they generate enriches the power grid. Compensation, therefore, be it by cash or credit, is a matter of equity and fair business practice.

The ideal and fairest outcome of legislative efforts would be to preserve the current net metering status quo. It is fair compensation for power provided and also an incentive to go solar in the public interest. Still, from a homeowner perspective, it seems wise to act as if the new PUC rule would prevail. Smart home owners should have their solar panels installed before December 31 2017, in order to qualify for the full benefit of net metering, grandfathered for the next 15 years. By that time their initial solar investment should be amortized. (Not to mention 2 lbs/kWh of CO2 not emitted into the atmosphere.)