On June 14th, Sol Systems’ Chief Business Officer, Sudha Gollapudi, testified before DC’s Committee on Public Services and Consumer Affairs on behalf of a recently proposed community solar bill. The “Community Renewables Energy Act of 2012” bill would permit DC residents to support community-owned solar energy facilities and receive a credit for the solar electricity generated to offset their utility electricity bills via net metering. This form of virtual net metering would allow for anyone to reap the energy benefits associated with owning a solar installation.

Many DC residents are unable to use solar energy because they either rent an apartment or own a property that is not ideal for a solar installation. With these restrictions, a large portion of DC residents do not have the ability to partake in the renewable energy and solar industry. In fact, in the United States, around 75% of American residential buildings have physical restrictions to going solar. This community solar bill would break down those barriers and provide a creative and innovative way for more DC residents to “go solar”.

To participate and receive the benefits from a Community Generation Facility, a DC electric utility customer would “subscribe” and commit to purchasing a certain portion of the solar electricity from the community facility, and they would be credited for that solar-generated production on their utility bill (i.e. they purchase 100 kilowatt-hours of solar electricity generated from the community solar energy system, and their utility electric bill is reduced by 100 kilowatt-hours). This process is referred to as “Virtual Net Metering.”

Currently, DC residents who install solar go through the simpler version of this process, called “net metering.” A net metered system is one that has a utility meter that spins both forwards and backwards. If a system is generating more than it is using, then the meter will spin backwards. If the site is using more generation than the solar energy system is producing, then the meter will spin forwards. This allows for the meter to net the production of the solar system and consumption of electricity from the grid, so that, at the end of the month, the customer only pays for the net electricity used from the utility’s electricity grid.

“Virtual Net Metering” would act the same way, but with some minor changes. Rather than measuring the production and consumption through one meter, the production would be measured by a meter at the site of the community generation facility and the consumption would be measured by a meter at the subscriber’s home, apartment, condominium, etc. The utility would then go through a process of “netting” the production and consumption to proportionally provide credit to each subscriber based on their portion of production and their actual consumption. The subscriber would then receive a credit on their electricity bill (i.e. a discount) based off of their proportional production.

The subscriber, who would not otherwise have access to the benefits of solar, would directly be receiving credit for the facility that they have invested in, without having to worry about any of the operational costs.

At the hearing, DC residents and those vested in the solar energy industry showed an immense amount of support for this bill and the creation of community solar facilities. However, the bill still withstood opposition from the utility and energy supplier representatives present.

While the utilities agree that this bill will provide greater accessibility and availability of solar for all, they are still concerned that the costs may outweigh the benefits. Utilities and energy suppliers would be the parties directly responsible for managing these subscriber accounts and awarding the credit for each electric bill. The current billing system does not have the functionality or efficiency to effectively distribute these credits to all subscribers. In addition, the utilities are concerned with the potential increased cost to the ratepayer as solar energy facilities may not provide a consistent flow of energy to the grid and utilities would need to be available to make up for any expected generation if a facility were not to operate as expected (i.e. unusually overcast weather, system outages, etc.).

The utilities present at the hearing also expressed concern over the length of subscriptions and the ability for a customer to frequently update or change his/her subscription. In order for the subscription process to be the most effective, utilities feel that subscriptions should have a minimal one year obligation to ensure lengthy investment in the solar facility, but also to decrease the burden of account management. By decreasing and reducing transactional changes, the costs for this billing system will also be reduced. It is important to note that these additional costs are generally passed along to the ratepayers.

At this point, the utilities are willing and able to work with those in support of this bill to allow for this legislation to move forward. However, it will not pass without a high level of cooperation. As noted in the hearing, the utilities will look for guidance from other states to provide structural examples for how this virtual net metering process can be successfully completed. Other states, such as Delaware, Colorado, California, Massachusetts, Maine, Rhode Island, Vermont, and Washington have all instituted some version of community solar legislation. By looking to these other states as an example, it is the aim of the DC Council and other working groups to come upon a solution that aggregates these previous successes and failures to build a comprehensive, innovative, and prosperous plan that would truly allow for all customers to benefit from community solar generation facilities.

There are no other hearings or votes scheduled for this bill at this time. Sol Systems will continue to track the progress of this bill.  Please check out our blog for further updates.

Sol Systems currently offers three types of SREC agreements for DC solar systems (both solar photovoltaic and solar thermal): Sol Annuity, Sol Brokerage, and Sol Upfront. Please email info@solsystemscompany.com for more information.

About Sol Systems

Sol Systems is a solar finance firm and a leader in financial innovation in the renewable energy industry.  Since its inception in 2008, Sol Systems has partnered with 350 installers and developers to bring over 3,000 solar projects from conception to completion by offering innovative financing solutions for residential, commercial, and utility-scale projects.

Sol Systems’ financing programs catalyze investments for a broad set of solar projects by simplifying their origination, diligence, and financing processes. Developers seeking financing for projects can access over $2.5 billion in capital through the Sol Systems investor network.

In addition to providing financing, Sol Systems also offers project due diligence, deal structuring and asset management services – all designed to reduce overhead and transaction costs and quicken project development timelines.

For more information, please visit www.solsystemscompany.com.