As electric industry regulators prepare for their summer meeting in Nashville, a group of solar and tech organizations and companies, including TechNet, Sierra Club, the Solar Energy Industries Association (SEIA), Vote Solar, The Alliance for Solar Choice, CalSEIA, and SolarCity released a paper on designing electricity rates in the era of distributed energy resources.
The paper titled, “Rate Design for a Distributed Grid,” describes a wide range of benefits for all consumers that come from distributed energy resources such as rooftop solar. These benefits include reduced need for electric generation, transmission and distribution capacity, lower energy costs and reduced price volatility.
The paper advocates for studying the costs and benefits of distributed resources, recommends a set of rate design principles to ensure fairness to all ratepayers and advocates for a series of reforms that can better integrate distributed resources into the electric grid and maximize their value. It comes in response to the Edison Electric Institute’s recent so-called primer on rate design.
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“Rooftop solar is of the most popular clean energy products in recent history among electricity consumers,” said Andrea Deveau, Executive Director of TechNet. “Utilities should embrace this and other reliable, clean and advanced energy technologies and integrate these resources into their procurement and grid planning in order to reduce electric system costs while lowering emissions without any compromise to system reliability.”
“Time and again, state public utility commissions and other researchers have found that the benefits of distributed solar equal or exceed the costs to electric ratepayers,” said Sean Gallagher, Vice President of State Affairs at SEIA. “Rather than using rates to slow down the solar revolution, utilities and regulators can help bring about a sustainable distributed energy future that takes advantage of the services that solar systems can provide to the grid.”
The paper’s recommendations include:
• Study the impact of distributed resources with a cost-benefit analysis.
• Design electricity rates that empower consumers to control costs and adopt new technologies that provide system-wide benefits.
• Implement technology standards to increase the functionality of distributed resources.
• Update utility business models so that utilities are incentivized to rely upon customer-sited distributed resources to meet infrastructure needs.
• If rate changes are needed, implement them gradually and incrementally, with grandfathering for customers who made long-term capital investments on the basis of previously existing rates.
— Solar Builder magazine
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