Use this page to get answers to some of the most-asked questions about solar energy. Have questions you don’t see here? Email vpirg@vpirg.org. Click on a question in the table of contents below to navigate to the answer.

Table of Contents

Q: What is net metering and why is it important to Vermont?

Q: What are community solar and group net metering?

Q: I heard that net metering is changing. What are the details about those changes?

Q: What are RECs and how do they contribute to our clean energy goals?

Q: If I’m a net metering customer, what happens if I produce more power than I use?

Q: How do net metering customers benefit the grid?

Q: Why don’t I see more solar over parking lots? That seems like such an obvious place to build solar.

Q: Do we need large scale ground-mounted solar array systems? Couldn’t we supply 100% of our electricity with rooftop solar?

Q: Does investing in solar energy really create many jobs within the state?


Q: What is net metering and why is it important to Vermont?

A: Net metering is the renewable energy policy that allows Vermonters to offset their electric usage with home, business and community based renewable energy – most often solar. By allowing individual Vermonters to install renewables, net metering has helped Vermont to be ranked eighth in the nation for solar capacity per capita in 2015.

Net metering is a billing mechanism that allows Vermonters and Vermont business owners to produce power from a renewable energy facility (typically solar, but occasionally wind, hydro or other renewable sources) and use it to serve their own energy needs. Any excess electricity is then sent back to the utility grid to be used by neighboring Vermonters in exchange for a credit on the customer’s electric bill.[1]

net-metering
 Net metering is not the only way to go solar. Some rural Vermonters who are far away from the electric grid resources have chosen to go solar with a back-up battery system or generator and keep their homes off the grid. However, this is typically less financially beneficial for Vermonters and doesn’t provide the same benefits to the entire electric grid. Net metering allows Vermonters to directly participate and invest in the state’s renewable energy goals. It has spurred renewable energy growth in Vermont, helping the state to be ranked eighth in the nation for solar capacity per capita through the end of 2015.[2] 

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Q:  What are community solar and group net metering?

A:  “Community solar,” “group net metering” and a number of other terms all refer to essentially the same thing – solar farms or other generally larger-than-residential solar installations that supply power to multiple customers within a community or around the state. Community solar gives Vermonters the opportunity to take part in solar even if they cannot install panels on their own property.

Community solar offers Vermonters the opportunity to share the benefits of solar energy without installing their own personal solar panels.  Community solar arrays use net metering, in which customers receive credits based upon how much energy the solar array produces. The provision in Vermont’s net metering law that allows community solar is called group net metering or virtual net metering.

community-solar-and-group-net-metering

[3]

Community solar is a broad term that is used for a variety of project types. Sometimes projects are owned by a single entity, like a town or a renewable energy developer. Under this model, individual Vermonters can either lease a specific share of the system, or pay for a set percentage of the power the system produces. Alternatively, the project can be jointly owned by community members who work with a developer to get it built. Either way, participants receive net metering credits on their utility bills through group net metering.

In addition to arrays dedicated to community solar, group net metering can also provide an option for homeowners with a rooftop or residential ground mounted solar system who are producing more power every year than they need. By creating a net metering group with a neighbor, they can share their excess credits instead of having them expire. See the question below on the expiration of net metering credits for more information.

Having so many models for community solar and group net metering makes going solar more accessible to all Vermonters. VPIRG supports expanding options and supporting existing models to ensure every Vermonter who wants to can go renewable.

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Q: I heard that net metering is changing. What are the details about those changes?

A: At the beginning of 2017, new net metering rules will go into effect. The new rules remove the limit on the net metering program while also reducing the rate new net metering customers receive for the energy their systems produce (current net metering customers will see no change). The rules attempt to encourage solar development on specific preferred locations, like rooftops, parking lots, and landfills. However, the rules could simultaneously make it more difficult for Vermonters to participate in community solar, as well as for larger customers like municipalities or school districts to meet all of their electric needs through solar.

The new net metering rules take effect in January 2017. Vermonters who apply for a permit to go solar before the end of this year, or who already have a net-metered system, will follow the old net metering rules. Overall, the new rules remove the statewide limit on net metering, which is a huge step in supporting a stable, growing solar market that supports local businesses and jobs and allows Vermonters to invest in our clean energy future. However, new net metering customers will be compensated at a reduced rate compared to what someone going solar today would receive (though still generally above the retail electric rate for the first ten years of a project’s operation). They will also no longer be able to use credit they receive from electricity they produce to pay for monthly fees, such as a utility bill’s customer charge, even if their solar generation exceeds their monthly usage.

Importantly, the rules strongly encourage rooftop solar systems in particular (up to 500 kilowatts (kW)) by guaranteeing favorable rates for these systems and an expedited permitting process. Rooftop solar systems are typically space efficient, don’t require land development, and produce power at the site it’s used. Beyond residential and rooftop systems, the new net metering rules lay out a number of types of “preferred” locations for larger systems. These include areas that could not otherwise be used for agricultural or community purposes, such as landfills and gravel pits. By providing lower rates for solar built outside of these preferred locations, the state’s Public Service Board hopes to encourage utilization of land areas that are ideal for solar and that would otherwise go unused.

In addition, the rules provide an incentive for developers to transfer the Renewable Energy Credits (RECs) to the utility to meet Vermont’s Renewable Portfolio Standard. To learn more about RECs, see the question on RECs below.

VPIRG believes these changes will help encourage long-term sustainable solar growth. We are concerned, however, that the rule will make it more difficult for Vermonters who cannot get solar on their own roof to go renewable, and that larger utility customers – in particular public entities like municipalities and schools – won’t be able to get enough solar to meet their needs under these new rules.

Given the new location limitations, community solar projects may be more difficult to develop. These projects have often been placed on fields or locations that are not considered “preferred.” Preferred locations may be more difficult to obtain through purchase or lease, more expensive to develop, or further from the necessary transmission and distribution grid resources, which would limit the options for Vermonters to join a community array.

In addition, the new rules limit institutional customers such as municipalities, school districts, and large businesses from net metering more than 500kW, even across several projects. Numerous municipalities and public entities that are considered “individual customers” could use far more than 500 kW of renewable energy. The City of Montpelier, for instance, could use about 2 megawatts (MW) of solar capacity, but would be limited to filling just a quarter of that with solar under the new rules. The same would be true for entities such as the University of Vermont or other large institutions. VPIRG opposes limits that take net metered renewable energy off the table for customers – in particular public entities such as towns and school districts – that want to invest in Vermont’s clean energy goals and realize financial savings on their utility bills.

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Q: What are RECs and how do they contribute to our clean energy goals?

A:  Renewable Energy Credits (RECs) are certificates that track how much renewable energy is produced from a project. State policies called Renewable Portfolio Standards (RPS) determine how much renewable energy a utility needs to provide its customers. In order to prove it has met the goals of the standard, the utility needs to own and “retire” an equivalent amount of RECs. In 2015, Vermont passed legislation to establish an RPS for the first time, requiring utilities in Vermont to supply renewable energy to their customers. This standard takes effect in 2017.

When a renewable energy project is built, the developer typically has a long-term contract for the power that project generates. The Renewable Energy Credits (RECs) can be sold together with the electricity, or separately. Whoever buys the RECs from a project can claim the renewable attribute of the power. If a utility buys power from a project but doesn’t buy the RECs, they cannot claim the power they purchased is renewable and attribute it to meeting their goal.

Until 2015, there was no statewide policy requiring Vermont utilities to supply their customers with renewable energy, which meant Vermont utilities were generally not buying credits from Vermont renewable energy projects. Instead, those credits would be sold to utilities in other states, such as Massachusetts and Connecticut, which had Renewable Portfolio Standards.

In 2015, Vermont joined its neighbors and passed an RPS (Act 56). This law mandates that by 2017, 55% of a utility’s electric sales be from renewable power. By 2032 the mandate is 75%. RECs from most renewable power sources, new or existing, large or small, can be used to meet this requirement, and there are enough existing projects that utilities are not expected to build new renewable energy in order to meet it. Separately, starting in 2017, 1% of a Vermont utility’s power must be from distributed renewable generation, increasing to 10% by 2032. This segment of power must be from installations that generate under 5 megawatts (MW) of electricity, and were built in Vermont after June 30, 2015. This standard will support the development of over 400 MW of new renewable electricity in the state.

While this standard made positive changes to encourage long-term sustainable solar growth, VPIRG ultimately supports a standard that would also get new renewable installations above 5 MW built (by requiring utilities to retire RECs from those kinds of projects). In the meantime, VPIRG supports continued renewable energy development that increases the percentage of renewable energy on the New England grid, including the development of projects that may sell their credits out-of-state, even as we support a stronger RPS.

The new net metering rules recently issued by the Vermont Public Service Board reflect concerns about RECs from small and medium renewable projects. Until now, renewable energy projects were permitted to keep the credits (and potentially sell them out-of-state) and still receive the retail rate for power the system produced, plus an additional incentive for solar installations.

Under the new rule, projects where the net metering customer keeps their RECs (either to sell out of state or to keep for themselves) will be subject to a $0.03 penalty per kilowatt-hour (kWh) (about $5,000 to $6,000 over the life of a typical residential solar system), whereas projects that transfer their RECs to the utility will receive a $0.03 incentive per kWh for the first ten years of their operation (an additional $2000 for the same residential solar system). While VPIRG supports efforts to retire credits in-state to meet renewable portfolio standard goals, we asked the Public Service Board to preserve an option for project owners to keep and retire the credits themselves. Allowing a third, neutral rate option (with no incentive or penalty) would allow Vermonters to claim the renewable attributes of a system and increase the amount of renewable energy being consumed in Vermont without being penalized.

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Q: If I’m a net metering customer, what happens if I produce more power than I use?

A: Depending on the time of the year, your solar system may produce more or less power than you use in your home (systems produce more in the long days of summer and less in the winter). Any month where you end up with more credit from your solar production than you used, excess credits carry over to the next month. However, any excess unused credits you still have 12 months after they were produced will expire, without compensation. If you are concerned about unused credits, you can look into economic and environmentally friendly ways of consuming those credits, including a group net metering agreement, an electric vehicle, or electric cold climate heat pumps.

The current net metering law stipulates that unused bill credits last for 12 months, and if still unused, “expire” without compensation to the customer. Up until recently, utilities in Vermont generally didn’t enforce the time limit. While VPIRG has argued for a time period of longer than 12 months, federal regulations functionally require credits to expire sooner or later.[4]

There are several options for using excess credits that would otherwise expire:

  • Set up a group net metering agreement with another customer from the same utility. This would allow your neighbor (or anyone else served by the same electric utility you are) to share in the excess power your system produces. You can set up a group net metering agreement by filling out a registration form on the Public Service Board’s website.[5] Setting up a group net metering agreement does not need to be permanent, and any customer can amend the Certificate of Public Good for their system at any time to change the group status.[6] You’re free to set up a group net metering arrangement where your friend pays for the credits they get, or to give the power away, as you see fit.
  • Invest in an electric vehicle or plug-in hybrid. Electric vehicles in particular are quickly coming down in price, with several models starting at under $30,000. For a thorough list of available EVs and plug-in hybrids, see Drive Electric Vermont’s great website. In addition, Drive Electric Vermont is currently offering a $1,000 upfront incentive, and there is a federal income tax credit available for up to $7,500.[7] Once you start driving, powering your car would cost the equivalent of about $1/gallon of gasoline,[8] based on Vermont electric prices. Of course, some of that power would be produced with your excess solar energy and would be at no additional cost.
  • Invest in a cold climate heat pump for home heating or a hybrid water heater and transition away from fossil fuel heat. Installing heat pumps could provide significant savings on fossil fuels for heating, protect you from volatile fossil fuel price swings, and limit your home’s greenhouse gas emissions.[9] Efficiency Vermont currently offers a rebate of up to $800 for home heating heat pumps[10] and up to $600 cash back for heat pump water heaters.[11]

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Q: How do net metering customers benefit the grid?

A: Beyond simply contributing to our renewable energy goals and decreasing our carbon emissions, net metering customers reduce the need for expensive transmission and distribution (electric poles and wire) upgrades. Renewable energy being produced close to where it’s used also means less energy is wasted traveling hundreds of miles to reach its destination.

Net metering supports the development of in-state renewable energy, usually solar (about 95% of all net metered power in Vermont is solar). As a clean, renewable energy source, solar power helps reduce our reliance on costly and polluting fossil fuels and will be a critical piece of Vermont’s goal to generate 90% of its electricity from renewable sources by 2050.

In addition to this broad array of societal, health, and environmental benefits, net metering also benefits the electric grid. Adding distributed solar to the grid decreases the need for costly new poles and wires (as it decreases the peak amount of electricity needed by the grid). Net metered systems are commonly sited at or very close to where electricity is needed (on homes, businesses, or in community centers), so the power typically doesn’t have to travel very far to get where it’s needed, which reduces strain on utility transmission and distribution systems. That also makes the electric system as a whole more efficient, since less electricity is lost as it travels to where it’s used.

Numerous recent studies across the country, including here in Vermont, have found that net metering is a net benefit to all ratepayers. Notably, a study for the Mississippi Public Service Commission recently found that net metering was not only a benefit, but it could actually help  lower rates for all other ratepayers.[12]

After installing a net metering system, most customers continue to pay monthly fees to the utility (fees that support the transmission and distribution grid), but historically some customers who generated more electricity than they used offset those all of those charges with their net metering credit. Under the new rules, this will no longer be possible. New net metering customers will pay the same monthly charges to support grid infrastructure and utility efficiency programs that all utility customers pay, even if their system generates more than they use in that month. For more on what’s changing in the new net metering rules, see the above question.

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Q:  Why don’t I see more solar over parking lots? That seems like such an obvious place to build solar.

A:   There is a great deal of potential in parking lot canopy solar. However, these systems are more expensive than other types of solar installations, and Vermont hasn’t had a policy that took that into account and enabled the development of parking lot solar. In 2017 there will be an initial pilot program to encourage these projects to be built and learn more about the associated costs, and they will also be encouraged as part of the net metering program for the first time. VPIRG supported both of those policy changes.

solar-parking-lot[13]

Building solar over a parking lot provides numerous benefits. For one, parking lots are typically located near buildings requiring large amounts of electricity, so these installations ensure the power is being generated close to where it’s needed. In addition, these areas of land have already been cleared of trees, so they are generally large, open, sunny areas that appear primed for solar development. Finally, given the orientation and placement of the panels, they are typically more space efficient (in terms of power per acre) than other ground mount systems.

The reason that there hasn’t been more parking lot solar development in Vermont so far is the relative cost of the projects. The biggest factor driving up the cost of parking lot canopy solar is the necessity for an extensive structure to be built over the parking lot.  Whereas rooftop solar uses an existing building, parking lot canopy solar installations require new structures to be constructed – and those structures have to be larger, and hence more expensive, than those build for typical ground mounted solar arrays.

Because we recognize the importance of these projects, VPIRG worked closely with Senator Campion of Bennington to get a provision in the recent energy siting bill to create a pilot program to facilitate the construction of 1.25 MW of parking lot canopy solar within the next couple years.  One result of the pilot program will be to determine the precise cost of building parking lot canopy solar in Vermont. This information will be crucial in making an informed decision about the role that parking lot canopy solar should have in Vermont’s transition to 90% renewable energy. In addition, parking lots are considered a “preferred location” under the new net metering rules – though it remains to be seen if the rate offered in that program will be sufficient to enable parking lot systems to be built. For more on the new net metering program, see the question above.

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Q: Do we need large scale ground-mounted solar array systems? Couldn’t we supply 100% of our electricity with rooftop solar?

A: No, there simply aren’t enough roofs in Vermont to support 100% of our electricity needs.

Vermonters sometimes ask if we could get 100% of our electricity just from rooftop solar. Doing so would require approximately 786,000 residential rooftops – and that’s just to get the amount of electricity we use today, not counting the additional electricity we’ll need as more and more Vermonters switch to efficient electric heating and transportation.[14] There are only 326,894 housing units in Vermont as of the 2015 census.[15] In 2012, the National Renewable Energy Laboratory (NREL) estimated that approximately 35-80% of total roof space isn’t available for solar given shading and other limitations.[16] If we assume roughly a third of Vermont homes can install a solar system, that would be just shy of 108,000 homes, or 14% of the roof space we’d need to install enough solar to meet the state’s current needs. If you add commercial roof space to that calculation (there are approximately 3,650 acres of total commercial floor space in Vermont, so less roof space than that – and as with homes, not all of that will be buildable), you’d still only be able to support about 1000 MW[17] of solar, which is less than a quarter of what we would need to reach 100% of our current electric load.

The reality is that Vermont must support renewable generation from a diverse array of in-state sources. Solar and wind complement each other in a distributed, renewable grid. Often wind speeds pick up as the sun is setting and solar power is going offline – and during the winter, when solar is producing the least, wind is typically producing more. Building a variety of sizes and technologies will allow us to both create a distributed grid and take the best advantage of the solutions at hand.

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Q: Does investing in solar energy really create many jobs within the state?

A: Yes. Clean energy sector employment has grown by 20% since 2013.  During that same period, overall employment in VT grew by a mere 2%.[18] 

In Vermont alone, there are over 75 solar companies[19] working on manufacturing, distribution, installation, finance and other aspects of solar development in the state, employing 2,100 Vermonters. A number of those companies manufacture components for solar systems installed around the country. The clean energy sector, as a whole, employs over 17,700 Vermonters, representing 6% of the entire workforce in VT.[20]  With continued investment and engagement from our state leadership, these numbers will continue to grow.

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Interested in learning more? Below are some additional external resources on solar power.

VPIRG’s comments on the draft net metering rule: December 2, 2016; July 15, 2016May 12, 2016; January 13, 2016; July 10, 2015

Union of Concerned Scientists: How Solar Energy Works? A broad overview of how solar energy works, with specific pages on rooftop and large scale systems.

U.S. Department of Energy: FAQ on Community Renewable Energy A detailed FAQ about community solar with links to additional state specific resources.

Clean Energy States Alliance: A Vermonter’s Guide to Residential Solar Interested in going solar? This comprehensive guide, prepared for the Department of Public Service, answers all your questions (and more!)

The Solar Foundation: 2015 Solar Jobs Census An infographic of the latest results from the national solar jobs survey conducted annually by the Solar Foundation.

 

[1] “Work Flow” Punjab Energy Development Agency, http://www.netmeteringpunjab.com/how-does-it-work.html. (accessed Sep. 15, 2016).

[2] “Top 10 Solar States” SEIA, http://www.seia.org/research-resources/top-10-solar-states. (accessed Sep. 15, 2016)

[3] “Community Solar: Pricing Models,” Energy Sage, https://www.energysage.com/solar/community-solar/pricing-models. (accessed Sep. 15, 2016).

[4] U.S. Federal Energy Regulatory Commission, Declaratory Order, 129 FERC ¶ 61,146. http://www.ferc.gov/whats-new/comm-meet/2009/111909/E-29.pdf. (accessed Sep 29, 2016)

[5] Systems under 15kW: http://psb.vermont.gov/sites/psb/files/NMRegistrationForm2015%20For%20Ditribution.pdf; Systems over 15kW: http://psb.vermont.gov/sites/psb/files/RevisedNMApplicationForm2015-07-01.pdf.

[6] Systems under 15kW: http://psb.vermont.gov/sites/psb/files/NMRegistrationForm2015%20For%20Ditribution.pdf

[7] Vermont Energy Investment Corporation. “Purchase Incentives,” Drive Electric Vermont, 2016. http://www.driveelectricvt.com/buying-guide/purchase-incentives. (accessed Sep 15, 2016)

[8] Vermont Energy Investment Corporation. “Why Go Electric?,” Drive Electric Vermont, 2016. http://www.driveelectricvt.com/buying-guide/why-go-electric. (accessed November 3, 2016)

[9] Ductless Heat Pump: http://products.greenmountainpower.com/product/ductless-heat-pump/; Heat Pump Water Heater: http://products.greenmountainpower.com/product/heat-pump-water-heater/

[10] Efficiency Vermont. “Heat Pump Heating & Cooling System,” Rebates, 2016. https://www.efficiencyvermont.com/rebates/list/heat-pump-heating-cooling-system. (accessed November 3, 2016)

[11] Efficiency Vermont. “Heat Pump Heating & Cooling System,” Rebates, 2016. https://www.efficiencyvermont.com/rebates/list/heat-pump-water-heaters. (accessed November 3, 2016)

[12] Mississippi Public Service Commission. “Net Metering in Mississippi,” Synapse Energy Economics, Inc. September 19, 2014. http://www.psc.state.ms.us/InsiteConnect/InSiteView.aspx?model=INSITE_CONNECT&queue=CTS_ARCHIVEQ&docid=337867 (accessed September 15, 2016)

[13] “Solar panels at cinicnnati zoo.jpeg” Wikimedia Commons. May 4, 2013. https://commons.wikimedia.org/wiki/File:Solar_panels_at_cincinnati_zoo.jpeg. (accessed Oct 6, 2016)

[14] Note: Assuming current electric load of approximately 6,000 GWh and approximate rooftop solar system size of 6kW.

[15] US Department of Commerce, US Census Bureau. “Quick Facts: Vermont,” US Census, July 2015. http://www.census.gov/quickfacts/table/PST045215/50. (accessed Sep 13, 2016)

[16] US Department of Energy, Office of Energy Efficiency & Renewable Energy, NREL. SunShot Vision Study, February 2012. DOE/GO-102012-3037, p. 35. http://www.nrel.gov/docs/fy12osti/47927.pdf. (accessed Oct 4, 2016)

[17] Asa Hopkins. “State goals and analysis of future solar development,” Solar Siting Task Force, Sep 17, 2015. http://solartaskforce.vermont.gov/sites/solarsiting/files/documents/meeting_materials/ASH%20for %20solar%20siting%20TF%2020150917.pdf. (accessed Sep 29, 2016)

[18] Vermont Clean Energy Development Fund, Vermont Clean Energy 2016 Industry Report, http://publicservice.vermont.gov/sites/dps/files/documents/Renewable_Energy/CEDF/Reports/VCEIR%202016%20Final.pdf. (accessed Sep. 15, 2016)

[19] SEIA, National Solar Database, www.seia.org/research-resources/national-solar-database. (accessed Sep. 15, 2016)

[20]Vermont Clean Energy Development Fund, Vermont Clean Energy 2016 Industry Report, http://publicservice.vermont.gov/sites/dps/files/documents/Renewable_Energy/CEDF/Reports/VCEIR%202016%20Final.pdf. (accessed Sep. 15, 2016)