Talk to people in the know on energy issues, and you’ll see why the industry’s future is characterized by uncertainty. Experts attest that we’ll face rising electricity prices as fossil fuel supplies dwindle and power generators begin to include the costs of carbon pollution in their pricing. Look no further than the plan to export Montana coal all the way to China as an example of increased worldwide competition for fossil fuels, and note that not a single new coal fired power plant was built in the United States during all of 2009 and 2010 as power providers hedged against the assumed future price of carbon pollution.
In a world of increasing fossil fuel prices, small-scale, decentralized renewable energy systems are an increasingly attractive option for policymakers and homeowners alike. Decentralized renewable energy takes advantage of clean and unlimited energy sources like the sun and the wind; it avoids the dangers of volatile fossil fuel prices; and it helps to avoid the need for costly upgrades to the transmission grid. It also creates jobs: Dozens of Montana companies sell and install small renewable energy systems.
Given that decentralized renewable energy will be a critical part of Montana’s future energy mix, it is critical that the state Legislature reduce arbitrary and capricious barriers to this energy source, and refrain from erecting new ones.
Montana law requires investor-owned utilities to provide “net metering” for customers who install renewable energy systems such as solar panels and small wind turbines. Under net metering, the energy from the customer’s system first powers their own home or business. When the system produces more than the customer uses, the excess flows out onto the electric grid and the customer’s meter spins backwards, generating a credit on their electric bill. Customers that produce as much electricity as they use can zero out their electric bills. Net metering is the single most important incentive for consumer investment in renewables, as it enables system owners to reap the full value of their energy production.
However, current Montana law limits the size of net-metered systems to 50 kilowatts. Among the 46 states with net-metering laws, more than three-quarters have higher caps, including our neighbors North Dakota, Idaho, Oregon and Washington. There are already about a dozen solar and wind systems installed in Montana that are maxing out the 50 kW cap, and demand is constantly on the rise. Montana businesses want this technology – the 50 kW cap is standing in the way of increased investment in renewable energy, and the jobs that go with it.
Further impediments to Montana’s decentralized renewable energy industry include limitations on joint or third-party ownership of net-metered systems. This prevents groups of neighbors from installing a single solar or wind system and sharing the benefits of their investment. It also prevents one company from installing a renewable energy system on another’s property in a mutually beneficial agreement.
Decentralized renewable energy currently faces an even greater threat. SB 226, a bill introduced by State Sen. Jason Priest, would undermine the very concept of net-metering by setting two separate electricity rates for net-metered customers: a lower rate for power received by the utility from the customer’s renewable energy system, and a higher rate for power purchased by the customer. This would mean hefty power bills each month for all net-metered customers, even those that produce as much power as they use. SB 226 would discourage homeowners and business owners from investing in small renewable energy systems, just when we need such systems more than ever. It’s an attack on renewable energy and a step in the wrong direction for Montana.
As Montana weighs its energy future, we need to ensure that decentralized renewable energy is given a fair chance. Homeowners and business owners that wish to invest in renewable energy should be encouraged to do so, rather than discouraged by unnecessary fees and arbitrary limits. Encouraging decentralized renewable energy is vital to ensure that Montana remains competitive in the energy markets of the future.
Conor Darby is general manager of Independent Power Systems in Bozeman and president of the Montana Renewable Energy Association.
2011 The Bozeman Daily Chronicle. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
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