RALEIGH, NC and BOSTON, MA (August 5, 2014) – Today, as part of the U.S. Department of Energy’s SunShot Solar Outreach Partnership (SolarOPs), the N.C. Clean Energy Technology Center (formerly the N.C. Solar Center) and Meister Consultants Group (MCG) announced the release of “Rethinking Standby and Fixed Cost Charges: Regulatory & Rate Design Pathways to Deeper Solar PV Cost Reductions”.
In recent years, over 20 states have taken steps to allow (or consider allowing for) new standby and fixed cost charges, with varying degrees of success, and resulting in contentious debates. The report, which includes a comprehensive national status update on state and local net energy metering (NEM) debates, outlines the ways in which solar-specific fees and charges can erase solar-related utility bill savings and derail non-hardware “soft” cost reductions. It concludes by recommending a fairer, more equitable approach that allows utilities to fully recover their costs and allow solar PV to continue to become more cost-effective.
“Recent discussions about solar in Massachusetts, California and elsewhere show that it is possible for utilities and the solar industry to avoid unduly contentious debates and agree on comprehensive approaches that allow solar to thrive and allow utilities to remain a solid long-term investment,” said Jim Kennerly, senior policy analyst and lead author of the report. “The regulatory and rate design pathways we recommend are intended to reframe a divisive debate and focus on constructive ‘win-win’ approaches that let utilities recover their costs and allow critical solar PV cost reductions to continue unabated.”
Overall, the report recommends that stakeholders broaden their focus beyond simply the emergence of solar and consider the varied reasons why utilities aren’t recovering their costs as easily (such as offshoring of manufacturing, continued investments in their infrastructure, sluggish economic growth and a growing number of their customers that use less). To address these challenges, the report recommends that utilities carefully consider a broad-based cost recovery strategy. The three components of this basic strategy are:
- Revenue decoupling, which allows utilities to better recover their costs and encourage customers to save energy;
- A “minimum monthly contribution”, which enables utilities to recover a critical degree of revenue from customers who are low- or zero net energy users; and
- Mandatory time-differentiated (also known as time-of-use) pricing, which provides both solar and non-solar customers with transparent utility cost information (and minimizes a significant cost shift benefitting non-solar customers);
In tandem with the full report, the N.C. Clean Energy Technology Center and Meister Consultants Group also released a 4-page executive summary of the report, as well as a separate state- and local-level “status update” for net metering debates in which actual or potential standby and fixed cost charges have played a key role.
“We are honored to work with the Department of Energy by participating in the SunShot Solar Outreach Partnership, including the development of this report,” said Steve Kalland, executive director of the N.C. Clean Energy Technology Center. “As we work toward a Fall 2014 launch of the redesigned Database of State Incentives for Renewables and Efficiency (DSIRE), this report, and the suite of resources we are releasing with it, underscores our commitment to remaining a national leader in tracking and analyzing clean energy policy, as well as providing unbiased, beneficial technical and policy resources and assistance of the highest quality.”
To obtain copies of the full report, the separate 4-page executive summary and state and local net metering “status report,” please click here.
About the N.C. Clean Energy Technology Center
The N.C. Clean Energy Technology Center, as part of the College of Engineering at North Carolina State University, advances a sustainable energy economy by educating, demonstrating and providing support for clean energy technologies, practices and policies. It serves as a resource for innovative, green energy technologies through technology demonstration, technical assistance, outreach and training. For more information about the N.C. Clean Energy Technology Center, visit: http://www.nccleantech.ncsu.edu. Twitter: @NCCleanTech
About Meister Consultants Group
Meister Consultants Group, Inc. (MCG) is an international consulting firm founded on the principle that global best practices can inform even the most localized decisions. Our extensive experience in both U.S. and international business and governmental affairs has made MCG a leader in the rapidly expanding sustainability field. By leveraging our international network of more than 100 consultants, we help our clients anticipate and adapt to the shifting global landscape. MCG specializes in alternative energy, environmental sustainability, international dialogue, and corporate responsibility. With affiliates in the United States, Europe and China, MCG uses innovative problem solving approaches to advise governments, corporations and non-profits on policy development, market strategy, program planning and change management.