Net Metering in the United States Kevin T. Fox, KEYES & FOX LLP November 24, 2011 Sao Paulo, Brazil 1
PV Cost Reduc=ons 2
PV Module Cost Trends 3
Comparison to Retail Rates - Brazil Source: ANEEL 4
Comparison to Retail Rates - USA Assumes no state incen=ves and 13% real increase in price of electricity AMrac=ve in about 250 of 1,000 largest u=li=es, which provide ~37% of U.S. residen=al electricity sales. 85% of sales (in nearly 870 u=li=es) are projected to have a price difference of less than 5 /kwh between PV and grid electricity. Forecast of Residen=al Cost Effec=veness 2015 5
Global PV Market Trends 6
Top 10 PV markets in 2011 (and global installa=ons share) Source: IMS Research: hmp://www.electroiq.com/ar=cles/pvw/2011/11/global- solar- pv- installs- of- 2011.html 7
Global Market Trends for PV Source: EPIA market data & Recurrent Energy consensus 8
2011 Trends by Market Segment Source: IMS Research: hmp://www.electroiq.com/ar=cles/pvw/2011/11/global- solar- pv- installs- of- 2011.html 9
United States Markets for PV Annual Installed Capacity in MWs Source: U.S. Solar Market Trends 2010 (IREC, June 2011) 10
United States PV Markets Electricity Grid Genera=on Transmission Substa=on Distribu=on Consump=on Markets 10+ MW 5-10 MW 1-5 MW 0-2 MW Ground Ground Ground and RooMop Primarily RooMop U=lity purchases output and delivers to retail customers Retail customer uses output 11
United States Net Metering 12
Net Metering How it Works? Genera=on and load are behind a single u=lity billing meter, which makes metering of this arrangement reasonably straight- forward. 13
Net Metering Policy Considera=ons Is net metering available to all customers? What technologies can net meter? Just PV? What size system can net meter? Are there caps on program enrollment? Can monthly excess genera=on be carried forward to the next month s bill? Are there any fees for par=cipa=on? Can a net metered system be located off- site? Can a single system by shared by mul=ple customers? 14
Net Metering in the United States WA: 100 OR: 25/2,000* CA: 1,000* AK: 25* NV: 1,000* MT: 50* UT: 25/2,000* AZ: no limit* WY: 25* CO: no limit co-ops & munis: 10/25 NM: 80,000* www.dsireusa.org / January 2011 ND: 100* NE: 25 KS: 25/200* OK: 100* MN: 40 IA: 500* WI: 20* MO: 100 IL: 40* AR: 25/300 LA: 25/300 MI: 150* OH: no limit* IN: 10* KY: 30* GA: 10/100 VA: 20/500* NC: 1,000* ME: 660 co-ops & munis: 100 DC VT: 20/250/2,200 NH: 100 MA: 60/1,000/2,000/10,000* RI: 1,650/2,250/3,500* CT: 2,000* NY: 10/25/500/2,000* PA: 50/3,000/5,000* NJ: no limit* DE: 25/100/2,000 co-ops & munis: 25/100/500 MD: 2,000 WV: 25/50/500/2,000 DC: 1,000 State policy HI: 100 KIUC: 50 Voluntary utility program(s) only PR: 25/1,000 State policy applies to certain utility types only (e.g., investor-owned utilities) FL: 2,000* 43 states + DC & PR have adopted a net metering policy 15
States with Expanded Net Metering (system can either be located off- site or it can serve mul=ple customers) Off-site Multiple customers Off-site Off-site and multiple customers Multiple customers Multiple customers Off-site Off-site Off-site Off-site and multiple customers Off-site and multiple customers Off-site Multiplecustomers 12 States have expanded net metering programs
State Net Metering Policies (cont.) Source: U.S. Solar Market Trends 2010 (IREC, June 2011) 17
Addi=onal Considera=ons 18
Making PV Cost- Effec=ve for Retail Customers 1) Net Metering 2) Rates/Tariffs U.S. Retail Solar Policy 3) Interconnec=on 4) Financing 19
Rate/Tariff Design Considera=ons Are there mul=ple service provides? If so, who nets which charges? Same rate/tariff op=ons as customers without PV or special tariff for customers with PV? If same tariffs, are all tariff op=ons available? Rate design considera=ons: kwh or kw charges? Time- differen=ated charges? Fixed fees and minimum fees? Addi=onal fees? 20
Addressing Subsidy Concerns Arises if: 1) net metered customers use same rates/tariffs as other customers; and 2) u=lity fixed costs are collected through kwh charges Do customers in this situa=on pay fair share of u=lity fixed costs of providing service, e.g. capacity costs? Solu=ons: Cap net metering enrollment Address through rate/tariff design once cap is reached 21
Financing & Ownership Considera=ons How does customer pay PV system ini=al cost? Can u=lity provide financing assistance? What other financing op=ons are available? Can someone else own the PV system and sell power to the customer? Can the u=lity own the PV system and sell power to the customer? Can a third- party own the PV system and sell power to the customer? 22
Non- U=lity Ownership & Financing 23
PV Value for U=li=es PV scalability, plus Ability to locate in almost any loca=on, plus PV module cost declines, equals Opportunity to provide new services to customers and increase u=lity revenue 24
Net Metering Resources www.irecusa.org Kevin Fox kfox@keyesandfox.com 25