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Small-scale, decentralized renewable energy systems are an increasingly attractive option for policymakers and homeowners alike. Decentralized renewable energy takes advantage of clean and unlimited energy sources like the sun and the wind. It avoids the dangers of volatile fossil fuel prices; and it helps to avoid the need for costly upgrades to the transmission grid. It also creates jobs: Dozens of Montana companies sell and install small renewable energy systems.
Given that decentralized renewable energy will be a critical part of Montana's future energy mix, it is critical that the Legislature reduce arbitrary and capricious barriers to this energy source, and refrain from erecting new ones.
Home energy savings
Montana law requires investor-owned utilities to provide “net metering” for customers who install renewable energy systems such as solar panels and small wind turbines. Under net metering, the energy from the customer's system first powers their own home or business. When the system produces more than the customer uses, the excess flows out onto the electric grid and the customer's meter spins backwards, generating a credit on their electric bill. Customers that produce as much electricity as they use can zero out their electric bills. Net metering is the single most important incentive for consumer investment in renewables, as it enables system owners to reap the full value of their energy production.
However, current Montana law limits the size of net-metered systems to 50 kilowatts. Among the 46 states with net-metering laws, more than three-quarters have higher caps, including our neighbors North Dakota, Idaho, Oregon, and Washington. There are already about a dozen solar and wind systems installed in Montana that are maxing out the 50 kW cap, and demand is constantly on the rise. Montana businesses want this technology — the 50 kW cap is standing in the way of increased investment in renewable energy, and the jobs that go with it.
Further impediments to Montana's decentralized renewable energy industry include limitations on joint or third party ownership of net-metered systems. This prevents groups of neighbors from installing a single solar or wind system and sharing the benefits of their investment. It also prevents one company from installing a renewable energy system on another's property in a mutually beneficial agreement.
Decentralized renewable energy faces an even greater immediate threat. Senate Bill 226, introduced by state Sen. Jason Priest, R-Red Lodge, would undermine the concept of net-metering by setting two separate electricity rates for net-metered customers: a lower rate for power received by the utility from the customer's renewable energy system, and a higher rate for power purchased by the customer. This would mean hefty power bills each month for all net-metered customers, even those that produce as much power as they use.
Discouraging investment
SB226 would discourage homeowners and business owners from investing in small renewable energy systems, just when we need such systems more than ever. It's an attack on renewable energy and a step in the wrong direction for Montana.
As Montana weighs its energy future, we need to ensure that decentralized renewable energy is given a fair chance. Homeowners and business owners that wish to invest in renewable energy should be encouraged to do so, rather than discouraged by unnecessary fees and arbitrary limits.
Conor Darby is general manager of Independent Power Systems in Bozeman and president of the Montana Renewable Energy Association.
Conor Darby is general manager of Independent Power Systems in Bozeman and president of the Montana Renewable Energy Association.
Posted in Guest on Wednesday, February 2, 2011 12:00 am Updated: 10:27 pm. | Tags: Renewable Energy Systems, Jason Priest, Energy Future, Conor Darby, Montana Legislature, Montana Renewabel Energy Systems
