Despite the fact that Texas has more than twice the solar potential of any other state, it rarely cracks the Top 10 for installed solar systems. In fact, smaller, less sunny states like New Jersey and Massachusetts consistently rank well above Texas.
Why is Solar Under Attack in Texas?
One reason is retail electric prices. Texas prices are relatively low. But the other driver is state level policy. Texas has no state policy supporting the adoption of solar. What we do have are a handful of utility level policies. The leader in Texas has traditionally been Austin Energy, the municipally-owned Austin area utility. Local activism, along with some inspired leadership resulted in a rebate program that helped kick start the solar industry back in 2004. Besides their rebate program, the utility instituted some innovative policies, culminating with their Value of Solar Tariff (VOST) that was rolled out in 2012, earning the utility the 2012 Public Power Utility of the Year award from the Solar Electric Power Association.
That was then. How quickly things change.
Since that time, the utility has been promoting a gradual but steady pull back from supporting distributed solar policies. In particular we are currently seeing an effort by the utility to slowly gut the VOST that they established just over a year ago.
Let me back up.
When you own a grid tied solar system, excess electricity that you generate is fed back into the grid. Electricity flows back and forth through your meter, and net-metering is the policy of treating and charging all of this electricity equally. Although there is no state wide net metering policy in Texas, this is fairly common practice throughout the country. The beauty of this policy is its simplicity, but its challenge is that it is often viewed as an incentive to solar homeowners, since in effect, the utility is paying the retail rates for solar electricity that they can otherwise provide at wholesale rates. But clearly, there are benefits to locally produced, clean energy. In fact, this energy may be more valuable than the average retail cost of electricity. But how do we establish this value? Enter the Value of Solar Tariff.
The VOST is not an incentive to solar generators. This rate is based upon several factors, including loss savings, energy savings, generation capacity savings, fuel price hedge value, transmission and distribution capacity savings and environmental benefits. Taken together, these savings are intended to reflect the value of distributed solar energy to the utility — a “break-even” value for a specific kind of distributed generation resource, and a value at which the utility is economically neutral to whether it supplies such a unit of energy or obtains it from the customer. In 2012, Austin Energy set the VOST rate at 12.8 cents/kwh and it is supposed to be “administratively updated'” each year. This is where things get interesting and we need your help.
Instead of taking the existing Value of Solar algorithm and simply updating it with annually changing inputs, Austin Energy changed the entire algorithm. By making subtle changes to underlying assumptions, they have been able to churn out a new Value of Solar Rate of 10.7 cents/kwh for 2014….and it is set to go into effect in three weeks.
Was there stakeholder input into this process? No.
Was a report generated explaining this new rate? No.
Was there approval by City Council on this new rate? No.
Why is this a big deal to you?
If you are an Austin Energy solar customer, then you are losing 15% value on the energy that you generate. This new rate results in a reimbursement that is significantly worse than net-metering for most participants.
If you are not an Austin Energy customer, but a solar advocate, note that Austin Energy has been the standard bearer for utility policy towards solar in Texas, and its policies are closely followed and even mimicked by utilities all over the country. Actions taken by Austin Energy establish precedent for others to follow.
If you are a proponent of solar, then I ask you to contact Austin Energy City Council. Tell them that you do not believe in an opaque valuation of solar energy. Tell them that you want to see a report and involve stakeholder input into the process of determining how solar should be valued.
A personal message is best. But here is one that you can cut and paste:
I support a transparent Value of Solar Tariff. Policy makers and the public should have access to a full report on the methodology and have a stakeholder process that allows for input into the process. I strongly urge you to put an emergency item on the agenda for the City Council meeting on December 14 and to vote to postpone adoption of the new value of solar tariff until a full report is issued by Austin Energy, and the public has been given the opportunity to weigh in on the proposed changes. That resolution should also postpone the confiscation of solar credits until Austin Energy can work with solar owners to find an equitable solution.
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