Dive Brief:
- The Pennsylvania Public Utility Commission’s Docket No. L-2014-2404361 proposes a 200% of annual power usage cap on the net metered solar generated electricity a system owner can sell to the grid. The commission’s draft law will be reviewed by state lawmakers and regulators for 18 months before it is to be finalized in September 2016.
- Pennsylvania currently has no cap, but concern is emerging that customers could use the state’s retail rate remuneration net energy metering (NEM) policy to profit. Some, backers of the proposal say, could resell on-site systems' electricity while avoiding grid construction, operations, and maintenance costs incurred by larger commercial power producers.
- Solar advocates argue there is not enough distributed generation in Pennsylvania to necessitate imposing an NEM cap. Regulators respond that state policies must anticipate growth that will make a cap necessary.
Dive Insight:
Forty-four states and Washington, D.C., have NEM policies that allow sales of distributed generation systems’ electricity to the local utility, though not all remunerate at the retail rate for electricity. Like many states, Pennsylvania neighbors New Jersey, Maryland and Delaware cap the resale of excess generation.
Pennsylvania’s renewables mandate requires investor-owned utilities to get 18% of their power from “alternative energy resources” by 2020-2021. As part of the 18%, they must get 0.5% of their power from photovoltaic solar. Some renewables advocates argue the NEM cap would interfere with utilities’ compliance.
Pennsylvania PUC Commissioner James Cawley said an NEM-driven increase in distributed generation could lead to an over-burdened transmission and distribution system and a lack of revenue for needed operations and maintenance investment.
The more controversial NEM issue is a cap on a utility’s net metered generation. 25 of the 44 jurisdictions with NEM had a restriction at the end of 2014. Such caps range from 0.2% to 9% of peak demand, with two jurisdictions at 15% and 20%.
