Dive Brief:
- Austin Energy, a longtime leader in renewables development, asked the Austin City Council to roll its 65% renewables by 2025 target back to 50% and allow the municipal utility to build a combined cycle natural gas plant instead of 600 megawatts of new solar capacity.
- The City Council’s 65% renewables mandate requires Austin Energy to replace the nearly 40-year-old 927 megawatt Decker Creek natural gas plant with solar by 2017. Austin Energy proposed the 50% target and a newer, more energy-efficient natural gas facility. Independent reviewers will consider both proposals.
- Austin Energy says its early commitment to solar left it with long term contracts for higher priced solar that make it necessary now to use low-priced natural gas to avoid increasing rates.
Dive Insight:
The proposed natural gas facility would impede the City Council’s drive for zero-carbon generation from Austin Energy by 2030.
Some Austin rooftop solar owners are reportedly dissatisfied with the utility’s value of solar tariff (VOST). The plan allows solar owners to sell their self-generated electricity to the grid and buy electricity at the retail rate. As long as the value of solar remains above the retail rate, solar owners benefit.
Solar leasing companies that lose business when homeowners choose solar ownership argue that Austin Energy should drop the VOST, which supports ownership over leasing. They say the VOST will require system owners to pay income tax on their solar earnings and may compromise their eligibility for the 30% federal investment tax credit (ITC) for installing solar.
If the claims are true, net energy metering would be of greater benefit to solar growth in Austin than the VOST. The IRS is preparing rule in a case pitting the VOST against net metering advocates in the city.
