The Vermont Public Utility Commission has issued the required update to the state’s net metering program. As a result of the adjustments, future net metering systems that apply for permits on or after August 1, 2024 will see a small net decrease in compensation – less than three-quarters of a cent – compared to what existing systems receive today. Most existing net metering systems will see compensation increase by 7.33% due to concurrent statewide electricity rate increases.
Every two years, the commission must recalculate the value of the bill credit that net metering customers receive for the energy produced by their net metering system to reflect changes in consumer electricity rates since the last biennial update. This is known as the “statewide mixed residential rate,” which has increased by $0.01257 per kWh since 2022.
The committee should also review the incentives and overall compensation offered to new netting systems and decide whether they should be adjusted upward or downward. The purpose of this adjustment is to ensure that the pace of net metering deployment is consistent with Vermont’s policy objectives while taking into account the program’s impact on electricity rates. Considerations include the changing costs of installing net metering systems, the pace of earlier implementation of net metering systems, and the impact of net metering systems on all ratepayers. This year, these considerations have resulted in a 2 cent decrease in total compensation for new systems applied for on or after August 1, 2024, but the net effect due to the increase in consumer electricity rates discussed above is a decrease of only three-quarters . of a cent.
Established in 1999, the net metering program is just one of many programs available to develop solar and other forms of renewable energy in Vermont. Customers who install net metering systems, such as solar panels and small wind turbines, can offset their electricity bills through financial incentives based on the amount of electricity generated by their net metering systems. The commission should reconsider the financial incentives offered to new net metering systems every two years through its biennial review process to ensure that the program continues to provide value to all Vermonters, including those who do not directly participate in the net metering program. . This order concludes that review process.
The information and data presented in this year’s biennial review process shows that the net metering program – particularly net solar metering – continues to see robust participation. Additionally, many of the best-placed net metering systems (e.g., roof-mounted systems) benefit from streamlined permitting, with a CPG issued within 15 days. In 2023 alone, 2,351 new net metering systems, totaling approximately 25 MW of new, renewable energy capacity, received Public Goods Certificates (CPGs) from the commission. However, the data presented in this biennial update also shows that net metering is the most expensive of the state’s renewable energy programs, and that the pace of net metering installations far exceeds the pace of other, less expensive renewable energy projects. For example, in 2023, more than 28 MW of net-metered projects were interconnected, compared to 4.4 MW of standard-supply projects and 5 MW of utility-sourced solar at a significantly lower price. This trend ultimately increases rates for Vermonters who do not or cannot participate in the net metering program. Therefore, to better moderate the pace of development of new net metering systems, the Commission has decided to reduce the offset for new net metering systems by 2 cents per kWh – resulting in a net decrease of $0.00743 per kWh, or less than three-quarters. of one cent. However, due to other adjustments made today, most existing net metering systems will benefit from an increase of $0.01257 per kWh, or approximately 7.33%, to their current offset.
“Vermont’s efforts to address climate change will require a significant transition to electric vehicles and heat pumps powered by carbon-free electricity generation,” said Commission Chairman Ed McNamara. “Even with the $0.00743 per kWh reduction in net metering compensation for new systems, Vermonters continue to pay significantly more for net metering compared to equivalent new renewable generation sources. Going forward, Vermont should prioritize the lowest-cost renewable generation to meet our climate and renewable demands.”
The adjustments announced via the biennial update will take effect on August 1, 2024.
News release from the State of Vermont Public Utility Commission
