Scott says solar industry ready to be weaned from price supports

Administration report says subsidies distort economy, favor wealthy, support purchase of power not in demand by consumers

November 14, 2019 – by Guy Page – Gov. Phil Scott supports cutting price supports for solar power, he said at a press conference today.

Vermont has the fifth-highest residential electricity rates in the U.S., due in part to an increasing market-share of solar power, which by state law utilities must buy at a fixed price, usually between 14-18 cents per kilowatt-hour. The “market rate” for electricity in New England is about 3-5 cents/kilowatt-hour.

“There comes a time you have to wean yourself off. When you’re paying out more than you are receiving. It’s not a good market approach,” Gov. Scott said. “It was a great incentive to jumpstart the renewable sector.”

Emphasis on was. A Nov. 1 proposal by his administration’s Department of Public Service would in effect reduce consumer cost of ‘net-metered’ price-supported solar power, which the report says now:

Benefits the wealthy: “A household in a high earning town is more likely to have a solar system than a household in a low earning town.”  Price supports “shift” about 9.2 cents per kilowatt-hour of solar power production to non-solar power producers. The Nov. 1 plan would return that money to non-producers through credits to monthly power bills over the next 10 years.

Hurts the economy: Net-metering provides jobs [est. 6,000] “but does so in a way that results in economic distortion….there is less disposable income and therefore less economic activity across Vermont.”

Offers less value to consumers than cheaper (3-6 cent) unsubsidized power (hydro, nuclear, gas) because consumer demand for solar is low when its output is high: “Over the last five years, the energy value of the solar output was worth approximately 8% less than the average wholesale energy price.”

It remains to be seen if the Legislature, which gave birth to net-metering in 2011, believes the industry is ready to be weaned.

In other energy news:

  • VT Digger reported yesterday that “the Climate Solutions Caucus [of the Vermont Legislature] will introduce a bill next session to require utilities to procure 100% of their electricity from renewable sources, with a greater share coming from in-state generation.” The caucus wants to boost in-state renewable electricity generation (wind, solar) over purchases of out-of-state renewable energy credits, Quebec hydro-power, and New England off-shore wind, nuclear, and fossil-fuel power.
  • Burlington residents will pay six percent less for energy efficiency in 2020, as a result of a Nov. 11 Vermont Public Utilities Commission ruling. Like other utilities, Burlington Electric Department pays for its energy efficiency program through a charge in its monthly power bills. The charge for non-residential customers (including businesses) will increase slightly.
  • The Vermont Public Interest Group wants Vermont snowmobilers to ‘go electric.’ In a Nov. 12 tweet, VPIRG said “Gas-powered snowmobiles are a blast, but they’re up to 50x more polluting than an average car. Taiga Motors’ flagship electric model reaches speeds of 60mph in under 3 seconds while significantly reducing the noise associated with conventional snowmobiles.” The cheapest Taiga snow machines cost $15,000 (presumably in Canadian dollars), the website for the Montreal-based company says. By comparison, Minnesota-built Polaris gas-powered sleds start at $5400, with the top-of-line at about $15,000.

Categories: Energy, Legislation