The Public Utility Commission building in Montpelier on Wed. June 5, 2024. Photo by Emma Malinak/VTDigger
The precipitous fall of Vermont’s net metering payment rates shows no signs of stalling.
For years now, the compensation Vermonters receive when they install solar panels and send excess power back to the grid has been declining — and the state’s Public Utility Commission announced further cuts in a report last week.
The move angered an array of state climate groups, who released a press release Wednesday criticizing the regulators for undercutting the program “at a moment when Vermonters are facing significant barriers to solar investment”.
“Left to its own devices the PUC seems fine presiding over this critical program slowly withering before our eyes,” said Ben Edgerly Walsh, program director at the Vermont Public Interest Research Group, according to the press release.
The state’s net metering program allows Vermonters to sell excess electricity they generate back to the local grid in exchange for credits on their monthly electric bills. This is especially useful for renewables like solar, which can’t be scheduled, because it guarantees program participants that none of the energy they produce goes to waste.
Since the program’s inception in 2011, the state has offered above-market rates for the net metering credits, in a bid to incentivize Vermonters to tackle the initial costs of installing rooftop panels. Every two years, however, the state commission revises these incentives – and it has consistently revised them downwards.
In 2017, customers received over 20 cents per KwH, according to the commission’s data. Now, that figure stands somewhere between 11 and 15 cents per KwH — depending on the size of the system — with the latest proposal cutting rates down by a further 2 cents on August 1 of this year.
This last rate cut would bring net metering close to the current market prices for electricity, which stand between 8 and 9 cents per KwH, according to the commission’s data. In its report, the regulatory panel argued the downgrade was necessary to protect Vermonters from statewide price increases.
“Without the decreases to incentives for new systems…the cost of new net-metered power would have increased, shifting even more costs to ratepayers who do not net-meter,” the report’s authors said.
More broadly, the commission seemed to cast doubt on the whole project of net metering as a means towards reducing emissions.
“Given that only 2.2% of Vermont’s 2020 greenhouse gas emissions came from the electric
sector…net-metering is one of the least effective actions that Vermonters can take,” the report’s authors said.
The state’s climate leaders disagreed sharply with this assessment, making the case that Vermont “needs a wide variety of renewables on multiple scales”. They also pointed to the 62% drop in permit applications to the net-metering program since 2018.
“The continued downgrading of net metering rates limits solar options for Vermonters who do need to consider affordability,” said Ben Gordesky, of the 350VT Electricity Policy Working Group, according to the press release.
Read the story on VTDigger here: State’s Public Utility Commission to cut net metering rates even further.