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Net Metering Surplus Compensation
by Lawson Schaller
Looks like progress is being made toward the investor owned (not municipalities, etc.), utilities being required to buy back excess or surplus power generated by those utilizing renewable energies—i.e. wind and solar. The excess power produced is fed back to the grid and resold by the utilities. Recently the California Public Utilities Commission (CPUC) approved a proposed decision establishing a rate for excess power via distributed generation (i.e. homeowner rooftops as opposed to the utility sized systems such as the one proposed at Carrizo Plains). This took place on June 9, 2011 and fulfills requirements of Assembly Bill 920.
In many parts of the world the buyback rate for excess power generated by individual generators is or has caused significant investment and growth in renewable energies. The amount is high enough to incent individuals to invest in renewable energy, and produce an excess; and then be paid a fair market rate for that excess. Germany is one example of a country that has an attractive, incentivizing buy back rate. This leads to jobs, cleaner air, sustainable power etc., etc. So, good to see California is requiring net metering surplus compensation.
How much you ask? It's not clear to me if it has been decided at this point. In speaking with a helpful representative from the CPUC, it sounded like the investor owned utilities (the big ones of course being PG&E, SCE, and SDG&E) have 30 days to submit or file the paperwork to keep the process moving. Here is an example of some of the language for the compensation:
"Specifically, the net surplus compensation rate will be calculated using an avoided cost derived from an hourly day-ahead electricity market price known as the "default load aggregation point" (DLAP) price. A utility's DLAP price reflects the costs the utility avoids in procuring power during the time period net surplus generators are likely to produce their excess power. Consequently, the DLAP price also meets our obligation to comply with the avoided cost principles of the Public Utility Regulatory Policies Act of 1978 (PURPA)"
Fairly straight forward explanation, wouldn't you agree? Seems fairly easy for your average homeowner with a solar electric system to figure out, and get a sense of how much return one might get from excess power? Here is a link to the document if you wish to wade through it. I think I might in my infinite free time.
Sarcasm aside, it is good to see progress being made. Personally I am guessing that the buyback rate will not cause a mad rush to your local solar dealer. Thankfully the federal tax credit is 30% on a solar electric system and that is acting as an incentive for people to install.
A side note – fairly recently it was reported that the state stopped rebates for small wind generators (i.e. homeowner roof top models). Evidently it was reported that a number of units were being installed in areas that did not have sufficient winds to produce the estimated performance of the units. So, if you are considering a small wind unit and are expecting a healthy rebate, do your homework and verify what's-what.
In the meantime keep your fingers crossed that the Default Load Aggregation Point works out to be a factor in the calculation that leads to fair net metering surplus compensation, for the homeowner . . . and the environment.
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