Dive Brief:
- Ratepayer bills in Louisiana could increase by $809 million if the current cap on net energy metering (NEM) is removed, according to a report prepared by Acadian Consulting Group for the Louisiana Public Service Commission (LPSC). However, solar advocates are challenging the conclusions.
- A cost of service analysis in the draft report of Estimating the Impact of Net Metering on LPSC Jurisdictional Players was based on setting the value of solar-generated electricity at the annual avoided cost of utilities' fuel purchases.
- The analysis showed Louisiana’s 31,236 net metered solar array owners only pay 64% of what they cost the utilities in a typical year, requiring non-solar owning customers to pay over $2 million per year extra.
Dive Insight:
The tension over the LPSC analysis typifies the contentious atmosphere between utilities and solar advocates in the U.S.
Louisiana solar advocates and The Alliance for Solar Choice (TASC), which represents national solar installation companies, said the report is "a biased study” because it fails to account for the benefits solar provides. TASC noted the study was funded by utilities and authored by an oil-and-gas industries advocate.
The study authors did find that the net benefit of NEM solar in Louisiana will increase if natural gas prices rise, if the value of grid backup power rises, or if there is a $40/ton cost on carbon emissions.
These calculations demonstrate that solar can be a valuable hedge against volatile natural gas prices, can be a vital source of backup power for system reliability, and provides greenhouse gas-free electricity as the EPA prepares to finalize the Clean Power Plan.
