Austin Energy pays 3 cents extra for solar and everybody wins

Net metering actually shortchanges rooftop solar generators, discovered Austin Energy by running the numbers. And here in Georgia we can’t even get net metering: maybe we should. In Austin, Texas it’s called the Value of Solar tariff, and it’s an odd tariff that actually pays the solar generator.

Chris Warren wrote for Oxford American 7 June 2013, The Revolution Will Be Solarized,

To come up with a true value of solar to the utility, Austin Energy formulated numerical values for all of the benefits yielded by each kilowatt-hour of distributed generation. These included not only the actual electricity produced but also the elimination of line losses as well as costs the utility could avoid by not building, or even delaying, construction on more generation. “If you put off a billion-dollar decision for one year, that’s at five percent interest,” said [Karl] Rabago. “It’s a big savings in cash each year.”

In the end, Austin Energy determined that net metering was actually shortchanging solar customers. Now the utility credits homeowners who have installed solar at a rate three cents higher than retail for every kilowatt-hour produced, which could mean the near elimination of utility bills for some of Austin’s customers. And Austin’s new arrangement does something else that’s different from traditional net metering arrangements. While customers receive more credit for the solar energy they make, they are still charged at regular retail rates for the electricity they consume. “You have a cloudy month where the utility has to provide a lot of electricity, then they collect what they need to,” said Rabago. “This was a major internal selling point.”

Rabago is now educating executives, policymakers, and regulators around the country about Austin’s approach to solar. To his mind, it’s a vision of the utility of the future. “There’s an upside for the utility to actually encourage the customer to get on the wagon to get more solar, to be part of their generation fleet,” he said. “When people always talk about distributed generation being a game changer or whatever the current buzz words are out there about utility transformation, it is true. This is disruptive shit.”