Solar production that gets exported to the grid has just become less valuable in Utah. The state’s Public Service Commission (PSC) has made the decision to lower the rooftop solar export credit rate as part of their recentExport Credit Docket decision. The export credit rate will be lowered from 9.2¢/kWh to roughly 5.8¢/kWh depending on the season. Solar advocates in Utah have been long been requesting high levels for the export rate or at least to preserve the 9.2 ¢/kWh rate while the state’s largest utility Rocky Mountain Power (RMP) had proposed an up to 84% decrease plus additional fees. This order went into effect immediately after it was announced on Friday, October 30.
Key Provisions:
- Export credit rate will be lowered from 9.2¢/kWh to an average of about 5.8¢/kWh
- Summer months (June through September) credit rate set at 5.969 ¢/kWh
- Winter months (October-May) credit rate set at 5.639 ¢/kWh
- There will be no TOU rates, just the winter and summer rates
- The new export credit rate goes into effect immediately, as of October 30, 2020
- If customers filled out an interconnected application before 10/30/20, they should be interconnected under the transition period rates
- There will be no application fee or customer generation meter fee
- The fees from the transition rate will remain in place
- Utah’s PSC allows for annual rate adjustments, but the levels of future adjustments are unclear
What’s the net effect?
Solar advocates are obviously not happy with the PSC’s decision. Reducing the export rate erodes the economic value proposition of going solar and may deter customers from investing in solar at a time where the state market was already seeing a drop in installs ahead of this potential change. According to the Utah Solar Energy Association, new rooftop solar installations in Utah went from 4,140 in 2016 to 12,408 in 2017 before falling to 3,540 last year, in response to potentially cutting the state’s net metering program. The solar industry in Utah currently supports 7,000 jobs, which industry advocates have been arguing may be at risk as this move weakens the value of solar and creates uncertainty. Utah’s Solar Energy Association president Ryan Evans reacted to the ruling saying it jeopardizes the most immediate need in the solar industry, which is stability. It’s not yet clear how much the market will contract over the next 12 months as a result of this decision. The silver lining is that similar to other states that have devalued solar exports, such as Hawaii, which will create a stronger incentive to pair energy storage with solar PV to prevent exports to the grid.
Updates in Energy Toolbase:
ETB Developer has offered users the ability to precisely model different types of NEM 2.0 scenarios for several years now, like this recently enacted change by the Utah PSC. Users simply need to select and define the ‘fixed rate for exported energy’ under the Utility Rates ‘metering details’ section. In our upcoming release, users will be able to more granularly define export rates or non-bypassable charges by season. We’re also planning to introduce a new framework where we’ll be globally defining the Net Energy Metering (NEM) details with the utility rate tariff, making our user’s workflow even more seamless and precise.
Links:
- Utah PCS decides to lower export rate, impacting a recovering rooftop solar industry – PV Magazine
- Export Credit Docket Order Granted – Utah Solar Energy Association
