David Riley

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The United States’ demand for renewable energy is continuously growing.[1] In many states, small-scale solar energy is in high demand.[2] In efforts to meet ambitious renewable energy goals,[3] many states have incentivized new solar generation through regulation and policy.[4] One such policy is net metering, in which a utility company reduces the rate of a customer that generates solar energy.[5]

Net-metered residential solar, however, has high upfront costs[6] that pose a significant barrier to solar generation for low-income households. Some even argue that rate reduction for net metering customers exacerbates this barrier by shifting the utilities’ costs to low-income customers.[7] The development of virtual-group net metering, often referred to as “community solar,” has enabled low-income households to overcome solar energy’s upfront costs.[8] Some state renewable energy policies now include financial support for low-income community solar projects.[9] This Note aims to review policies from several states, compare their methods and efficacy, and ultimately promote an ideal model for states that have yet to develop a model that serves all communities.

The structure of this Note is much like a solar array, supported by a strong foundation of community solar basics with each state-specific discussion aligned in parallel.[10] Thus, Part I will  firmly ground the reader in an understanding of group net metering projects and how they differ—for the benefit of low-income households—from a typical independent net metering project. Part I will further bolster this foundation by critiquing the cost-shifting argument. Whether mounted on one’s roof or virtually accredited to a group of off-takers, the argument persists that rate decreases for some mean rate increases for others.[11] This Note will discuss this argument’s limits in order to show how group net metering can benefit low-income communities at large. Part II will then review Vermont’s current policies on both independent and group net metering. Specifically, it will detail Vermont’s regulations and net-metering regime, highlighting the new barriers for low-income renewable energy generation. Part II will also analyze the regime’s efficacy and short and long-term practicability in supporting low-income access to solar generation. For comparison, Part III and Part IV will then review the policies of neighboring New Hampshire, and New York, whose geographic similarities result in similar peak-load[12]and generation concerns. Ultimately, Part V it will show what changes could remove obstacles to solar ownership for residents of Vermont and states with contextual similarities.

 

[1]Renewables to Lead World Power Market Growth, Int’l Energy Agency (Oct. 2, 2015), https://www.iea.org/newsroom/news/2015/october/renewables-to-lead-world-power-market-growth-to-2020.html.

[2]Solar in Demand, DOE, https://www.energy.gov/articles/solar-demand (June 15, 2012).

[3]Stephen Ferrey, Carbon Outlasts the Law: States Walk the Constitutional Line, 41 B.C. Envtl. Aff. L. Rev. 309, 310 (2014).

[4]See, e.g., NY-Sun: Making Solar Affordable for All New Yorkers, N.Y. St. Energy Research & Development Auth., https://www.nyserda.ny.gov/All-Programs/Programs/NY-Sun (last visited Sept. 28, 2018) (listing multiple state-run incentives and resources for promoting solar energy).

[5]Different utilities reduce their rates in different ways. Compare How do I Get Paid for the Solar Generation?, Green Mountain Power, https://greenmountainpower.com/help/net-metering/get-paid-solar-generation/ (last visited Sept. 28, 2018) (explaining the billing and rate reduction process); Net Metering, National Grid, https://www9.nationalgridus.com/masselectric/home/energyeff/4_net-mtr.asp (last visited Sept. 28, 2018) (explaining “Net Metering in Practice”).

[6]Nathan Mee & Marc Miller, Here Comes the Sun: Solar Power Parity with Fossil Fuels, 36 Wm. & Mary Envtl. L. & Pol’y Rev. 119, 132 (2011).

[7]See, e.g., Ferrey supra note 3, at 334 (noting utility companies’ estimates on revenue losses due to net metering, and the effect these losses have on the ratepayers).

[8]Steve Calechman, Making Community Solar Work for Low-Income Customers, Green Tech Media (Mar. 14, 2016), https://www.greentechmedia.com/articles/read/making-community-solar-work-for-low-income-customers-is-crucial-for-growth#gs.qyd5e_A.

[9]See, e.g., N.H. Pub. Util. Comm’n., New Hampshire Renewable Energy Fund: Annual Report (2018) (allocating funds towards financing low-moderate income community solar projects).

[10]Lakes Region Cmty. Coll., NH Residential Solar 101: A Presentation for Residential Property Owners, Eversource, https://www.eversource.com/content/docs/default-source/builders-contractors/nhresidential-solar101-pdf527.pdf?sfvrsn=e5dacf62_0(2016) (last visited Oct. 28, 2018).

[11]Stephen Ferrey, Virtual “Nets” And Law: Power Navigates the Supremacy Clause, 24 Geo. Int’l Envtl. L. Rev. 267 (2012).

[12]Peak-load refers to when a system’s energy demand is at its highest. See Evolution of Demand Response in the United States Electricity Industry, Peak Load Mgmt. Assoc., https://www.peakload.org/DefiningEvolutionDR (last visited Mar. 1, 2019) (explaining peak load and industrial strategies to manage it).