Solar Concerns Over Draft DER Compensation Regs

Why the solar industry is concerned about national guidance that could affect widespread local investment in DER projects.

Distributed energy resources (DER) seem to be popping up at all kinds of businesses and homes, and in city buildings and schools.

These small-scale power generation sources might be solar cells, geothermal systems or other technologies located close to where the electricity will be used. They also feed the power-grid with their surplus production, and compensation for that helps hasten the returns on their investment. That can help cities, citizens and businesses save money over the long-term.

In order to regulate their compensation, the National Association of Regulatory Utility Commissioners’ (NARUC) released a draft manual (expected to be final in mid-November) on how DERs might be compensated.

Many view this draft manual as critical in shaping the future of the electricity grid, and a group of solar industry companies are concerned about the final document, according to GreenTechMedia.

NARUC has maintained that the focus of the manual is to provide guidance to state energy utilities on how to compensate and provide rate-based commissions to DERs, and the final manual will have list of options energy utilities can consider in their rate decisions.

However, the current draft opens the door for energy utilities to discriminate against DERs that compete with their own investments, according to the solar companies. They maintain that the manual fails to recognize DERs as valuable, viable resources but rather casts them as something to be managed in light of utility revenue erosion and cost-shifting, neither of which are actual threats in any region, according to the solar companies.

The solar companies are also saying that NARUC's draft review process is rushed, and not transparent. While public comments are not currently available to the public, the Solar Energy Industries Association is publishing comments to the NARUC draft on its website.

SolarCity, one of the distributed solar companies, objects to creating DER-specific rates all together, advocating instead for DER customers to proportionally pay for the grid services they consume, and likewise be compensated for the full value of grid services they provide.

We do not think that distributed energy resources and distributed generation are part of the problem; we think they’re part of the solution,” said Jon Wellinghoff, chief policy offer for SolarCity.

The manual should provide state regulatory commissions with tools to "fairly analyze what those values are,” said Wellinghoff.

Read the original story on GreenTechMedia's website.

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