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Oregon is about to pass a new Renewable Portfolio Standard

February 17, 2016

On February 11th, 2016, Oregon’s state House of Representatives voted 39-20 to pass House Bill 4036, which would establish a new goal of 50% of renewable energy by 2040, eliminate nearly all of the coal power plants in Oregon by 2030, and establish a statewide community solar program.

The bill is now in the Senate Committee on Business and Transportation, and will likely pass the Senate and be signed into law, given that it is backed by the state’s largest utility companies and Governor Kate Brown. But the proposed legislation has seen vocal opposition from other state officials, who argue it doesn’t do enough to protect ratepayers from increases in their electric bills.

We have our reservations about the bill, most notably that it repeals Oregon’s current solar carve-out, which requires utilities to source 20 Megawatts of electric generation capacity from solar by 2020. The law would also do nothing to ensure Oregon’s net metering rules won’t be tampered with—the way Nevada’s just were.

But there is a lot of good here, too, especially in new community solar provisions.

Community Solar Gardens are coming!

The bill’s authors define a community solar project as “a project for the generation of electricity that allows the customers of an electric company an opportunity to buy solar energy from a shared solar resource and to share in the costs, risks and benefits of solar projects through the customer’s electric bill.”

Under the legislation, the state’s electric utilities would be required to implement community solar programs with rules for the total amount of solar the companies will buy from community solar projects and how solar owners will be paid. The bill also requires the utilities to enter into 20-year purchasing agreements for the power produced by community solar.

The most interesting thing about the community solar provision is that it empowers the Oregon Public Utilities Commission (PUC) to develop a definition for “the resource value of solar,” that is, the price a community solar subscriber would be paid for the electricity their panels produce.

This could be a very good thing indeed, because it means the state sill spend resources on studying the value solar has in replacing traditional forms of generation, which has produced great results in other states. Minnesota, for example, has determined the the “Value-of-Solar” (VoS) is about 20% higher than current retail electric rates. That figure is levelized over 25 years, meaning solar owners will get paid above retail for solar today, but as rates rise over time, will continue to get paid the same for the energy their systems produce.

Minnesota’s VoS calculation

That levelization means solar pays itself back more quickly, which is good for solar owners, but also that utility companies can recoup those costs as savings over what they would have been paying under a net metering system. It’s a win-win that gets the state to quickly adopt solar now, and makes it a stable source of electricity for the future. In Oregon, the value of solar study could produce similar results, meaning a good strong start for the community solar program.

Minnesota’s VoS compared to net metering

No matter what happens with this bill, new solar capacity is getting less expensive to build every day, and we need good laws that will make sure we can all share in the promise of clean energy. This bill is one step toward that future, but Oregon’s citizens deserve a new solar carve-out for distributed solar that ensures a financially-stable place for rooftop solar in the state’s energy mix. We’re sad to see that now seems to have been completely ruled out as part of the deal that brought this bill to the legislature.

Last modified: February 17, 2016

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