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Solar payback will be worse next year for people in states around the country

A pile of pennies

All around the country, utility companies have been busy worrying about what home solar power will do to their bottom lines, and in several states, they’ve taken actions that will have immediate consequences for people who install panels on their roofs.

Sure, utilities say what they’re really worried about is how customers with solar panels on their roofs aren’t paying their fair share of costs to maintain the grid, but if they were really concerned about that, they might pay attention to all the studies that say rooftop solar is a net benefit to the public.

But what we’re concerned about here isn’t the arguments for and against net metering, but what the immediate impacts of changes to people who have installed or will install solar panels.

What does this mean for you?

If you live in Arizona, Indiana, Maine, Massachusetts, New Hampshire, or Utah, it could mean that you will be paid less for the excess solar electricity you sell the utility company.

But no matter which state you live in, changes like this could be in store for you soon. Nearly every state is studying changes to solar compensation, and it’s only a matter of time before recommended changes come into focus in other places.

If you’re a current solar owner, you will probably be grandfathered in using the old rules. None of the states changing these policies has failed to write some sort of rule protecting solar owners who signed up before the rule changes. You should still read on to find out what’s going on and how long you have.

If you’re thinking about installing solar, now is the time to get quotes from local solar providers.

The effective dates for these new rules are approaching quickly, and if that isn’t enough, the cost to install solar might go up later this year as well, because the US International Trade Commission and the Trump Administration are considering new tariffs on foreign-made solar panels.

Details about compensation for excess electricity

People in the following states who have not yet installed solar will see reimbursement other than net metering on the following dates (click on the state names for further info):

StateChangesEffective DateGrandfathering
ArizonaNet metering replaced by $.129/kWh reimbursement, revised annually8/31/2017Yes, 20 years for current solar owners
IndianaEnding net metering and replacing it with a rate of wholesale price plus 25% by 2022.1/1/2018Yes, 30 years for customers who install before 1/1/2018
MaineEnding net metering and reducing compensation by small amounts each year1/1/2018 (pending court challenge)Yes, 15 years for current solar owners, and 15 years at the going rate for new solar owners
MassachusettsNew monthly charges proposed for solar owners, could equal $10 to $30 for moderately-sized home systems1/1/19 (proposed)Yes, for any customer who installs solar before 1/1/2019
New HampshireReduces monthly compensation of distribution charges by 75%.TBA (pending study)Yes, through the end of 2040
UtahNet metering replaced by a straight $.092/kWh payment for excess electricity for 3 years, then pegged to a value of solar study by 202011/15/17Yes, for customers who install by 11/15/17 through 2035.

Arizona

Arizona’s Corporations Commission recently approved the end of net metering for customers of Arizona Public Service Electric Company (APS), the state’s largest utility, and they’re now about to consider a proposal to decrease payments and increase monthly fees for customers of Tuscon Electric Power (TEP).

If you’re in Arizona and you want to go solar, sooner is better, because there’s no telling what you might get. After that, solar customers will be credited based on a new formula, starting at $.129/kWh and are locked in for 10 years, but will decrease by 10% each year for new customers.

Indiana

Indiana residents have until the end of the yer to sign up for new solar service with net metering intact for the life of their system.

After 12/31/17, the reimbursement rate for excess solar energy will remain the same, but those rates will be locked in for 15 years only. Anyone who installs solar after 2022 gets the wholesale rate +25% for excess electricity. Who knows how cheap solar will be by then, but “pray they don’t alter the deal further.”

Vader altering the deal

Just saying… other than a brief blip in Nevada, no state has ever taken away net metering for current solar owners.

Maine

Maine can’t seem to get it together on solar compensation. They have a bullheaded governor who fights against solar net metering, even though he can’t seem to come up with a better plan, and even criticizes his own appointees whom he forced to make a decision for him.

Long story short, Maine can’t pass a new bill to sustain net metering, so a ruling from the Public Utilities Commission that slowly decreases compensation will take effect after the new year.

Maine residents who install solar after 12/31/17 will see 10% less of the transmission and distribution portion of their current electricity rate. In plain English, that’s about $75 a year less in solar owners’ pockets

Massachusetts

Massachusetts is a little different, because the state hasn’t implemented the proposed changes as of this writing (8/31/17).

The changes have been proposed by the state’s largest utility, Eversource, and are known as a “monthly minimum reliability contribution” (MMRC). That basically means that they want to charge solar customers a special fee every month based on how much solar they have installed.

The fee is pitched as a way for Eversource to ensure solar owners are “paying their fair share” of costs to maintain the grid, which is a specious argument

But regardless of the quality of the argument, if the Eversource plan goes through, Massachusetts home solar owners could be seeing fees of $2-$3 per kilowatt of panels, per month. That would equal about $150 per year of fees for the owner of a 5-kW solar system, which reduces the financial benefit of solar by about 13%. Bummer.

The fees would take effect on January 1, 2019, and would only apply to new solar owners. So if you’re looking to get solar installed in Massachusetts, it might be time to get that ball rolling now. You could start by getting quotes from local solar installers.

New Hampshire

New Hampshire Residents who have already installed solar have nothing to worry about. Like all the other states in this list, people who installed solar before the deadline will be grandfathered in with the old net metering rates.

For people who will install solar after 9/1/2017, the compensation works a little differently. New solar owners will still receive 100% of the retail price of the transmission and supply portions of their per-kWh price, but will only receive 25% of the distribution portion.

That’s no small peanuts. It represents a reduction of 17% of the reimbursement price, from about $.19/kWh to about $.16/kWh. It means a difference of about $320 per year.

And more changes are on their way. New Hampshire will be studying the value of residential solar, and determining whether it again needs to change its rates. If you install solar while the study is being conducted, you’ll be able to keep the current net metering rates. If you wait until after, you’ll be stuck with what they study finds is an acceptable rate for reimbursement.

Utah

Finally to Utah, where a settlement was just reached between solar advocates and the state’s big utility company, Rocky Mountain Power.

If approved by the state’s Public Services Commission (PSC), the agreement will take effect on November 15th, 2017. For three years, new solar owners will receive a credit of $.092/kWh, down from the retail rate of about $.102/kWh. That’s a 10% decrease in payback, but only for electricity that isn’t used to power the home.

The PSC meets on September 15th to decide whether the agreement will be enacted.

Last modified: August 31, 2017

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Michael D

There ought ot be a new federal law requiring Trump to cover all his golf courses with solar panels. And he pays for it. And he gets no return at all.

David Hardingham

it so wrong as we are part of the solution

Our dream is to turn your thoughts of solar power for your home into reality

The first step is calculating how much you can save with solar

Cool, let’s calculate my savings Nah, maybe we’ll do that later

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