In Vermont’s state legislature, a bill is under consideration that will help owners of residential solar photovoltaic (PV) systems put more green into their pockets.
It’s not a rebate or an incentive program to reduce installation costs, but a change to net-metering policies–a change that can reap substantial savings for Vermont residents.
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What Is Net Metering?
When a grid-connected, residential solar system generates more electricity than the home is currently using, the home’s electrical meter literally spins backward, sending the surplus energy back into the electrical grid. In many states, the customer then gets a credit for that energy on the monthly electrical bill.
Net metering is one of the primary reasons that going solar has become so affordable. Even with a small home solar system, there are periods of the day when it will generate more energy than the home needs. When that excess electricity is credited to a home energy bill, it cuts down on the costs of the conventional energy that a homeowner may need to supplement the PV system.
Why is Vermont’s Net Metering Policy Changing?
Across the nation, public utilities are mandated to invest in renewable energy. Many utilities partially meet these mandates through net metering, but states are allowed to dictate the percentage of solar-generated electricity that utilities credit their customers. Last year, Vermont raised the cap on the amount that utilities can get from net-metered PV systems to 4 percent.
This, along with Vermont solar rebates, was good news for residents, but the new law restricted the size of eligible solar panel systems to only 5 kilowatts. In Vermont, the average home PV system is around 7 kilowatts, leaving most homeowners ineligible to take advantage of the extra savings without undergoing a taxing application process.
House Bill 475, which just passed in the state’s house of representatives, allows for a simple application process for PV systems sized up to 10 kilowatts. Best of all, the bill also credits customers with home solar systems more money per kilowatt hour for surplus electricity. The bill must still pass the state’s senate.
What About Other States?
Almost every state has programs in place that garner extra income for PV system owners. In many areas of California, for example, net metering savings can be augmented by taking advantage of tiered and time-of-use (TOU) rates. Tiered rates are those that rise as the customer uses more energy. TOU rates increase during peak-demand periods. Home PV systems typically generate enough electricity to keep customers in the lower, base rates.
Other states like New Jersey award home solar system owners a Solar Renewable Energy Credit (SREC) for each megawatt-hour of electricity that their systems produce. New Jersey SRECs are currently selling for $675 each.
Cutting installation costs through rebate and incentive programs is only the beginning of solar savings. Programs like net metering not only offer ongoing savings for homeowners, but decrease the payback period for their systems. Once that period is over, those savings become sheer profit.
For more assistance paying for a home solar system, check out solar lending programs, offered in Vermont and across other states as well.