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Vermont’s renewable businesses call on Governor

to support strong net metering program, citing many economic benefits

Program creates jobs, empowers customers, and benefits ratepayers

Montpelier, VT – Citing the need for a policy that creates local jobs and supports Vermonters who want to produce their own energy, Vermont’s renewable energy businesses are calling on the Governor to support a solution that strengthens the state’s popular net metering program.

Renewable Energy Vermont (REV), the state’s renewable energy trade association representing local installers, manufacturers, and other associated businesses, penned the letter to Governor Peter Shumlin and his Public Service Department Commissioner late last week.  The group cites the instability causes by the few utilities that have halted their net metering programs after reaching the state’s 4% requirement.

“As members of the Vermont renewable energy business community and on behalf of our current and future customers, we are troubled by instability caused by the Vermont utilities no longer allowing, or those limiting, net metering… The current uncertainty also undermines the basic right that Vermonters have to produce their own energy.  Net metering is the critical policy across the nation that allows homeowners, businesses, and schools to take some control of their energy future,” the business group wrote.  “We believe in the current policy discussion around the net metering cap, it is critical to fully account for both the immediate and long-term benefits of net metering.”

The group cites the numerous economic benefits of a strong net metering program, including deferring large transmission costs, summer peak shaving benefits, reduced line-losses while transporting energy, management of power delivery, the environmental benefits, and the long term benefits to the utility of customers’ financing, permitting, constructing, and hosting long term renewable energy assets at no risk to ratepayers.

The current 4% net metering requirement based on peak demand means that utilities hitting the current cap are still less than, or very close to, just 1% of their total energy from net metered systems.  The letter cited that, “The program is just beginning to work and should be strengthened given the innumerable benefits.”

“Net metering is working.  Thousands of Vermonters, businesses, schools and towns have invested millions of dollars in their own energy production.  Keeping energy dollars local makes Vermont communities stronger.”

“Forty-three states have net metering programs.  Our neighboring states such as Connecticut, Massachusetts, and New York have maintained and supported strong net metering programs to facilitate meeting their energy goals and, as a result, their markets have grown and thrived in response to the policy certainty.  Should Vermont decide to let this competitive industry pass the state by, the market will take the jobs, investment, and the clean energy elsewhere and local businesses in the industry will suffer.” 

For a copy of last week’s letter, see pasted below:

November 20, 2013

Dear Governor Shumlin,

Thank you for your commitment to advancing Vermont’s renewable energy economy and the energy leadership you have demonstrated.  Through initiatives aimed at reaching your Comprehensive Energy Plan goal of 90 percent renewable by 2050, more Vermonters are energy secure with home or community-scale renewables than ever before and our state’s clean energy economy has never been stronger.

As members of the Vermont renewable energy business community and on behalf of our current and future customers, we are troubled by instability caused by the Vermont utilities no longer allowing, or those limiting, net metering.  As a result of the current uncertainty of the program, we have seen a direct and corresponding destabilization of the industry.  This has already resulted in projects failing to move forward and investors losing interest in providing local financing.  This will cost Vermont jobs.

The current uncertainty also undermines the basic right that Vermonters have to produce their own energy.  Net metering is the critical policy across the nation that allows homeowners, businesses, and schools to take some control of their energy future.

To be clear, Vermont is neither alone nor a leader in net metering.  Forty-three states have net metering programs.  Our neighboring states such as Connecticut, Massachusetts, and New York have maintained and supported strong net metering programs to facilitate meeting their energy goals and, as a result, their markets have grown and thrived in response to the policy certainty.  Should Vermont decide to let this competitive industry pass the state by, the market will take the jobs, investment, and the clean energy elsewhere and local businesses in the industry will suffer.

Net metering is working.  Thousands of Vermonters, businesses, schools and towns have invested millions of dollars in their own energy production.  Keeping energy dollars local makes Vermont communities stronger.  With third-party financing now able to pay for the up-front cost of solar system, solar net metering today is now affordable to nearly every Vermonter.  Reports now show net metering being driven predominantly by lower income brackets.  The industry’s growth has spurred numerous new Vermont companies, some of which have grown nationally, such as Encore Redevelopment, SunCommon, AllEarth Renewables, Solar Tech, Solar Pro, Green Lantern Capital, NRG Energy locating in Vermont, to name just a few.  And it has produced Vermont-grown, community scale clean energy.

We believe in the current  policy discussion around the net metering cap, it is critical to fully account for both the immediate and long-term benefits of net metering.

  • VELCO has reported that Vermont avoided $250 million in large transmission line upgrades due in part to distributed generation throughout the state [AP, 8/18/13].  More distributed generation, particularly in targeted locations, will further boost this financial savings to Vermonters.  This cost savings has a direct economic benefit to the ratepayers of each utility.
  • Beyond large scale transmission deferral, the Public Service Department report just last January following Act 125 concluded that across the state there is a net societal benefit of solar net metering, not a cost shift.
  • In addition, each utility, regardless of their load profiles, should be fully accounting for the full, long term benefits of net metering, including: peak shaving benefits, reduced line-losses, management of power delivery, the environmental benefits, and the long term benefits to the utility of customers’ financing, permitting, constructing, and hosting long term clean energy assets at no risk to ratepayers.  Further, we are aware that some utilities have been discounting the long term net metering value, such as not attributing the full 25+ year benefit of these systems or accurately accounting for projected increases in electric demand on their utilities from the electrification of Vermont’s transportation and thermal sectors.  This will result in shortsighted public policy.
  • Because the “solar adder” phases out for projects after 10 years and altogether if energy prices increase, the long-term societal benefits of net metering will only continue to increase compared to other sources.
  • Vermont cannot expect to buy its power from out of state forever.  Nor should it want to.  We are the smallest energy user in the region and there are financial risks, which ought to be fully accounted for, associated with the presumed ability to forever buy renewable energy at a competitive price in the future.
  • Finally, the current 4% net metering requirement of peak demand means that utilities hitting this cap are still less than, or very close to, just 1% of their total energy from net metered systems.  The program is just beginning to work and should be strengthened given the innumerable benefits.

The many benefits mentioned above don’t account for the broader economic and the multiplier effects of a strong renewable net metering economy in Vermont that has put the state on the map as having the 11th most solar jobs in the country per capita.  These jobs don’t include many of the recent contractors, electricians, and other traditional trades that have cross-trained employees, diversified their businesses, and are now engaged in renewable energy work.

We are encouraged by the work of your administration in strengthening the net metering program. We believe it is vital to Vermont’s economic and energy future that any proposal strengthen, not undermine, this important and widely successful, community-based energy program.  With the federal Investment Tax Credit expiring December 31, 2016, Vermont has just three years to install as many solar systems as possible.  States and individuals that don’t take advantage of this closing window are leaving critical federal funding on the table.

We trust Vermont will find a path that strengthens our communities, empowers its citizens to generate their own energy, and creates good jobs today that will continue to grow our economy tomorrow.

Again, thank you for your leadership,

Gabrielle Stebbins

Renewable Energy Vermont, representing hundreds of Vermont businesses

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