On the roof of the Kerasotes building in downtown Springfield, at the corner of Sixth and Washington streets, Michelle Knox shows off a 9.9-kilowatt array of solar panels.
“This system offsets about 25% of the building’s consumption,” she said.
Those savings make the monthly City Water, Light and Power bill lower than it would be without solar panels. And thanks to a system called net metering CWLP gives the building owners a credit when the panels produce extra electricity, which goes back to the city grid.
More solar panels are popping up on rooftops all over Springfield. As renewable energy grows in popularity, the city’s public utility is moving to change how they’re billed. The debate over the policy comes as city leaders wrestle with recommendations to shut down three of its four coal-fired generators and replace the production with renewable energy or power purchasing agreements.
CWLP now requires new solar installations to have two meters – one measuring all the electricity the installation produces and the other measuring all the electricity a building is using. The electricity from new panels goes straight to the CWLP grid, instead of into the building they’re on top of.
“The disadvantage of the new system is that you can't always rely on the fact that you're going to be offsetting your consumption with the solar systems production that you paid for out of your pocket,” Knox said.
Knox is a renewable energy developer and head of Wind Solar USA. In her office one floor below, she helps customers figure out the financing, installation and maintenance of solar panels.
Right now, the city-owned utility is crediting solar customers for the electricity that's going back on their lines at full retail – exactly what a customer pays for a kilowatt hour produced by the city’s coal plants or bought on the open market.
But Knox worries CWLP might try to lower that rate, making solar panels a less desirable investment. And she’s not wrong.
Cost-Shift Burden
“It's just not sustainable to do net metering for the long period,” said CWLP chief engineer Doug Brown. He said net metering gives solar panel owners benefits at the expense of everyone else.
“They're not paying their fair share fixed costs. So the rest of our customers are subsidizing solar customers,” he said.
CWLP Solar Installations
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In other words, the money it takes to maintain the system of cables, transmission hubs, and utility poles that bring electricity to your home – those solar customers aren’t paying their fair share because they’re paying less on their electricity bills, leaving those without panels to pick up the tab.
It’s an argument promoted nationwide by the utility industry , which calls it a cost-shift burden. But it’s controversial.
“It definitely varies from utility to utility and based on the amount of solar that's actually installed already,” said Autumn Proudlove with North Carolina Clean Technology Center, which examines nationwide renewable energy policy.
She said studies done by environmental groups and policy centers show the cost-shift concern may be overstated.
“If you have a state or utility territory where there's very little solar, there's not really going to be much of any cost-shift burden,” Proudlove said.
Policy Changes
Solar accounts for less than half of one percent of electricity capacity in Springfield, an NPR Illinois analysis of CWLP data shows. The total capacity installed on rooftops and in fields since 2011 is around 2.2 megawatt-hours. The capacity of Springfield’s coal-fired power plant is 578 MWh.
CWLP officials said they haven’t done a detailed analysis of this cost shift, but insist there is one. Brown said using a two-meter system prepares the utility for the future when there will be more decentralized sources of electricity, including solar panels and large batteries, so they are better able to meet electricity demand.
He also pointed out that states and utilities around the country are considering changes to net metering policies.
Some states are moving away from net-metering policies, while others are maintaining them, according to a report from the North Carolina Clean Technology Center . Kentucky lawmakers approved a law for a new credit rate for electricity sold back to the grid. It also allows utility companies to recover fixed and demand-based costs from customers who are producing their own electricity.
Meanwhile, Nevada and Maine lawmakers have reinstated net-metering policies after facing pushback from solar customers and developers when the states got rid of them.
In Illinois, state law requires the investor-owned utilities, Commonwealth Edison and Ameren, to offer net metering to customers with solar panels until the renewable energy makes up 3% of their load. At that point, the utilities can commission a study to propose a new rate structure for solar customers, which can be implemented when solar capacity reaches 5%.
Proudlove said utilities should also consider the benefits solar panels provide and “[make] sure that there's data and it's been thoroughly studied.” She also encouraged grandfathering policy to “[ensure] that customers that already have solar installed won't be subject to abrupt changes that they weren't seeing coming.”
Brown said he’d support current solar customers continuing to have net metering for a certain amount of time.
Still, Knox, the solar developer in Springfield, wants the utility to keep net metering for all smaller solar installations – the ones that power homes and small businesses.
The only thing insulating solar customers from a credit drop is the Springfield City Council, which would have to approve any changes to how CWLP pays customers for the solar electricity they produce. Knox said she’s taken her concerns to council members, and hopes they bring forward an ordinance in the coming weeks.
