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While it remains unclear how an Iowa utility will change the way solar customers are compensated, installers in the state aren’t taking chances.
Alliant Energy is expected to introduce a new tariff for customer generation today as part of an ongoing process initiated by state regulators.
Some people in the state’s solar industry, as well as some clean-energy advocates , suspect that Alliant’s proposed new tariff will effectively lower the cap on the amount of energy that qualifies for net metering. That, in turn, will worsen the economics of a solar array.
One solar company, Iowa Wind and Solar, has sent out e-mails encouraging people to, at a minimum, apply for an interconnection agreement in order to be grandfathered in under the existing net metering rules.
“We’ve had tons of response,” company vice-president David Birchmier said on Friday. He put the number of applications in process at about 40, compared to a more typical five. “We’re completely backed up. Our entire engineering team is working over the weekend.”
Installer Michele Wei said that last weekend alone she filed eight applications for interconnections with Alliant, compared to a more-typical three per month.
“Alliant appears to be swamped and their approval time has been taken longer than in the past,” she said in an e-mail.
Alliant could not be reached for comment.
The Iowa Utilities Board last year told both of the state’s major investor-owned utilities to design new tariffs for distributed-generation customers, with the aim of fostering more solar energy in the state. The new tariffs are to take effect for three years, at which point the board will decide whether to make them permanent.
This pilot is the latest turn in the IUB’s study of its policy on distributed generation, which it launched in January, 2014.
It is still not clear exactly how Alliant intends to calculate the amount of solar energy that may be net metered, but concerns abound.
As it now stands, Alliant’s new approach “is going to change our system sizes to a lower capacity,” said Tim Dwight, who owns a solar installation company and also is president of the Iowa Solar Energy Trade Association. “They won’t have an opportunity to do 100 percent of their use, but it might be 50 percent of their use (in commercial projects.) It may be a little higher on the residential side.”
Dwight, who also has advised potential customers that the coming tariff is likely to be a change for the worse, estimated that his business has increased by 30 or 40 percent as the deadline approaches.
Birchmier had a fairly similar assessment about the likely impact of Alliant’s new math.
“Our feeling is that residential customers are not going to be dramatically impacted. They could likely still offset 80 percent, possibly more, of their bill. However, it is the end of the world for small businesses, which is the target we feel solar is most viable for. Today they can offset 100 percent of their bill, if they have space available to do so. After these changes, it will be closer to 30 to 50 percent.”
However, it is not yet exactly clear how Alliant’s proposal will affect the cap on net metering.
The confusion arises from the way in which Alliant wants to measure a customer’s electricity use. MidAmerican, which is also conducting a three-year experiment with a new distributed generation pilot, is using a pretty straightforward definition: a customer’s total energy use over the course of a year.
Alliant has proposed basing its use calculation on demand – those few minutes in the year when a customer makes the greatest demand on the system. And because Alliant in most cases doesn’t have that number – since it doesn’t routinely monitor that – it will base it on an average demand for a given class of customer.
Although the utilities board has approved of that general methodology, some clean-energy supporters in the state have objected to it because it doesn’t relate to a specific customer’s usage history, and is complex and lacking in transparency.
The activation date for the tariffs has been postponed once, and given the lack of clarity about how the new Alliant tariff would work, Birchmier predicted that could happen again.
“We want (the current tariff) to get extended,” he said. “(Alliant’s) current policies are very favorable for solar. We’d like to see it stay that way forever.”