VoteSolar has produced a tip sheet on principles for distributed solar generation policies and rates. On the surface of it, this type of information might not seem all that appealing to the average consumer, but it is actually quite important because distributed solar allows consumers more freedom of choice.
Freedom of choice generally gets consumer attention, because consumers like flexibility. Historically, utility companies have had something of a monopoly on electricity and gas, so consumers did not have much flexibility. However, because of the dramatic decrease in the cost of solar power, rooftop and other distributed solar types are set to increase. Most consumers may not want to abandon the utility-backed grid systems. At the same time, distributed solar power generation is attractive because it can provide electricity at lower rates. Community solar parks, for example, have been constructed and used in some states, like Colorado.
You can tell we are all in a transitional phase in terms of where energy is coming from. Vote Solar wants to make sure consumer awareness is high and that consumers are able to access power at affordable rates. Let’s look at its six principles.
1. Preserve individual customer rights to self-determination
Each customer can choose the amount of energy to purchase from the grid, the amount to self-produce and consume, and the amount to save through efficiency measures that reduce consumption.
The self-production might be the most important point. In the very near future, homeowners and business people are likely to be producing more of their own energy. No utility or other entity should be allowed to place limits on how much energy can be produced. Placing such limits would be sort of like blocking individuals from growing unlimited amounts of food in their own gardens.
2. Capture the Full Range of DSG Benefits and Values
Customer-sited solar generation offers many benefits to the electric utility system and, by extension, to non-solar customers. These values and benefits should be quantified, and solar customers should be adequately compensated for the value their solar energy is delivering to all customers.
Once customers are generating their own power, the power they can share should not be undervalued. In other words, their power should be sold at a rate that is fair to them.
3. Promote Policies and Rates Favorable to Next-Generation Distributed Technologies
Tariffs and policies should not inhibit the deployment of DSG, demand response, combined heat and power (e.g. fuel cells), storage or other innovative energy technologies that are currently available or will be available in the forseeable future.
This point is also about consumer fairness. Consumers don’t make high-level policies but are still impacted by them. Utilities might have an incentive to block the growth of energy production that can’t control or manage. They also have the ability to influence public policy in their own favor.
4. Insist Upon Non-Discriminatory Rate Practices and Policies
Utility rates should treat reductions in utility revenues due to net metered solar and other DSG in a manner that is fully comparable to reductions due to other consumer behaviors including energy efficiency and demand response. Any rate treatment that is not generally applied to all similarly situated customers must be cost-justified and seek to avoid unintended consequences.
This one is a more detailed extension of the previous one about fairness to consumers. currently, solar power generation is an emerging trend, so it must be protected in order to expand further.
5. Adhere to Due Process
A transparent and data-driven analysis, which allows stakeholder participation and ensures protection of due process rights, should be followed in order to optimize the chances for an outcome that is best for customers.
Because the trend is an emerging one, it isn’t completely clear what all the legal aspects will turn out to be. So, customer rights to fairness in legal proceedings must be ensured as well.
6. Ensure Rooftop Solar Benefits are Shared with Low-Income Customers
Within resource and grid planning processes, regulators should ensure that utilities effectively realize the present and future benefits that distributed solar provides, including freeing up distribution and transmission capacity and reducing the need for infrastructure upgrades. These cost savings must be shared equally among all customers, including low-income customers, through thoughtful rate design.
Low-income customers can benefit the most from a decrease in energy bills, because they pay a disproportionate amount of their income for energy.
