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SB 214 changes to net metering, fees for rooftop solar

Kentuckians for the Commonwealth sent out an action alert this morning about a bill on fast track to approval. If you've ever considered solar panels (or you have them already) - this bill affects you.

Senate Bill 214 - SB 214 crushes customer choice by imposing unfair costs and rules on rooftop solar and other distributed renewable energy systems. It rewards monopoly electric utilities while banning community solar solutions. And it creates huge new obstacles for private investments in rooftop solar.

This bill received its first reading on the Senate floor on Friday, a sign that Senate Republican leadership intends to move it quickly. SB 214 is expected to get a hearing and vote in the Senate Natural Resources and Energy Committee this Wednesday, March 1, at 11 a.m. in Room 154 of the Capitol Annex.

Background information

Across the U.S. the states with the strongest solar industries have public policies that encourage private investment and local ownership, expand consumer energy choices, and create an open and fair market for renewable energy businesses. One of the most powerful policies for encouraging rooftop solar is a provision called net metering, which gives customers a one-for-one credit on their utility bills for excess energy their renewable energy system delivers to the grid.

Many states also have adopted additional laws to empower all customers, including people with low and moderate incomes, renters, people living in multi-family units, people whose homes lack good solar exposure, and many types of small businesses and farms to benefit from renewable energy. Half of all states expressly allow third party ownership of renewable energy systems, which is necessary for many consumer-financing options. A dozen states also allow true community-owned solar and virtual net metering, provisions that let customers share the benefits of locally owned renewable energy installations.

For example, virtual net-metering would allow a farmer to install solar panels on a barn with good exposure to the sun, and assign the credits to the electric meter on the shaded farm house. A law allowing true community-owned solar would allow the owner of an apartment building to install a solar array and assign bill credits to tenants' accounts. A community solar law would also allow communities in eastern Kentucky to build solar panels on reclaimed mine sites, lease panels to nearby homes or businesses, and credit those accounts for the energy generated.

But even before the introduction of SB 214, Kentucky's renewable energy policies are among the most restrictive in the nation. For example, Kentucky:

Caps the size of net-metered systems at 30 kW (the limit in West Virginia, Indiana and Virginia are 2,000, 1,000, and 500 kW respectively).

Caps the total capacity of net-metered systems at 1% of a utility's peak load, a fraction of what other states are already achieving.

Provides no state tax incentives for customers who install their own renewable energy systems.

Prohibits third party ownership of renewable energy systems, virtual net metering and independently owned community solar.

Now SB 214 seeks to further reward and protect utility monopolies, while restricting consumer choice and hobbling Kentucky's independent solar energy industry. It would:

Rewrite Kentucky's net metering rules so that monopoly utility companies - and not Kentucky's residents, employers, workers or independent renewable energy businesses - can benefit and profit from solar energy from here on out.

End net metering as we know it by imposing new fees for customers who install solar systems. It also creates great uncertainty for people who want to invest in rooftop solar, because those new fees would be allowed to change over time.

Establish those new fees based only on the costs claimed by the utility, while disregarding the widely acknowledged benefits that net-metered solar energy systems deliver to utilities and all non-participating customers.

Extend and codify Kentucky's ban on 3rd party ownership, true community-owned solar, and virtual net metering.

Taken together, these provisions could bring rooftop solar installations to a screeching halt across Kentucky, while ensuring that electric utility monopolies are the only ones permitted to benefit and profit from the power of the sun.

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