Arkansas' solar future hangs in the balance as PSC begins net metering review

Dive Brief:

Arkansas regulators are reviewing the state's rules for net metering, a crediting mechanism designed to compensate rooftop solar customers for excess energy they sell to the grid, the Associated Press reports.
Directed by the state's legislature last year through Act 821, the Arkansas Public Service Commission split the proceeding into two parts: one to evaluate the size of the rooftop solar systems allowed to be net metered, and the other to utilities' costs associated with net metering customers to come up with a new rate or fees.
While net metering customers in Arkansas number in the hundreds, critics worry that cutting remuneration rates will damage the nascent market, but staff members supported a grandfathering clause to avoid a controversy like Nevada.

Dive Insight:

A familiar debate is shaping up in Arkansas as regulators tackle the touchy subject of net metering compensation, but a decision is likely months in the making.

Directed by lawmakers to take a look at the net metering rules last year, the Arkansas Public Service Commission split the proceeding into two dockets. Rulings on size limits could be issued in a matter of weeks, the AP notes, but the more controversial proceeding over new rates and fees will likely not be finished until the end of 2017.

Solar advocates are echoing similar worries from other states in regards to fixed fees and reduced remuneration rates for rooftop solar arrays. Utilities have said rooftop solar customers don't pay their fair share of grid upkeep, while solar advocates want regulators to look at the full benefit of solar. One way utilities have sought to recoup fixed costs is through fixed fees, which have proven detrimental to rooftop solar customers in the past.

Nevada's new net metering tariff increased fixed fees in addition to reducing the retail net metering rate, while excluding a grandfathering clause for roughly 32,000 customers. The decision sparked the exodus of major rooftop solar developers.

Hoping to avoid such an outcome, the PSC staff has expressed support for a grandfathering provision. But one utility said grandfathering is inconsistent with Act 827, which said each net metering customer was responsible for paying its own cost-of-service, in an attempt to eliminate shifting costs to other non-rooftop solar customers.