From Net Metering to Energy Buy-Back

As a general rule, the Pacific Northwest has it good when it comes to energy costs. In the US the average price paid by consumers is 12 cents per kWh. Hawaii pays 33 cents/kWH, but since it is an outlier it may make more sense to establish the upper threshold with states like New York and Connecticut that pay 18 cents/kWh. Washington residents, on the other hand, pay only 8 cents/kWh.

The reason for this is that a substantial portion of the energy in the region comes from hydroelectric dams. This long-established, reliable form of carbon-neutral energy production is a valuable asset, but it is a fixed one. If anything the trend is moving toward breaking dams, not constructing new ones. If Seattle and other Puget Sound communities want to reduce their carbon footprint then the energy portfolio must be expanded.

What about solar? Despite the region’s reputation for rain, there are actually plenty of annual solar hours to justify the investment. What is holding back the widespread adoption of solar PV and solar hot water is access to financing and the inability for producers to receive credit for their net energy production.

Seattle participated in a pilot project conducted by the US Dept. of Energy to help cities conserve energy. Seattle’s program, known as Community Power Works, worked to connect homeowners with energy efficiency contractors and lenders while providing financial incentives for the projects. Typical scope of work ranged from basic air-sealing to comprehensive insulation and HVAC upgrades. What it didn’t cover was any installation of solar equipment. While it may make sense for a program with limited funding to focus on “low-hanging fruit” upgrades, there was certainly a lost opportunity.

Successful programs like Community Power Works are a great first step, but they need not be the end of the story. Why not use the successes of this program to encourage power utilities to pay local producers for their energy? Homes with solar PV arrays currently enjoy “net metering”, which means their meter runs backwards when they are in production mode. But they will never receive a payment for any net production. This is a lost opportunity that could help align regulatory policy with the desired outcome of expanding the adoption of small-scale solar energy production.

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