Most utilities provide some type of program to compensate for installing a solar system. The most common, with some being utility specific:
Xcel Energy offers a solar production incentive up to 20 kW in size. Note that Solar Rewards are issued annually on a first come, first served basis.
The Solar*Rewards program offers an incentive based on the kWh production from a solar system, as recorded by the production meter. The incentive is $0.08 per kWh over the first Ten years. Your solar system can be larger than 20 kw, but Xcel will only pay the .08 cent kWh up to the 20 kw threshold.
Utilities, whether a cooperative or Investor Owned Utility (IOU) pay you their retail avoided cost rate for any excess production generally for projects up to 40kw.
Under net metering, at the end of a monthly billing period is generally credited to the next month’s bill. Compensation may take the form of an actual payment (i.e., check for purchase) or as a credit on the customer’s bill.
The Capacity Credit is a Standby Credit to the qualified customer in part offsetting the Demand side generation for projects sized 40 kw on up to 1 MW. Investor Owned Utilities (IOU) compensate for their need to offset their need for control standby generation. Note that project size is generally determined by the 15-minute demand usage that is a major part of a commercial company’s utility bill-detailed analysis is required to ensure proper sizing.
Generally, the credit is given to owners of solar systems on their utility bill for a rate of .07395/kWh for solar system production between the hours of 1 PM-7 PM, 7 days a week, excluding one month per year.
The electric utilities must maintain sufficient generating capacity and transmission capacity to supply a customer’s peak demand at any given time. The utility does not know for sure when the peak demand might come, but it has to be ready. Most of the time the utility’s generating and transmission capacity sits by idly waiting to spring into action whenever customers demand it. It is expensive to maintain that excess generation and transmission capacity. Utilities charge customers for the costs of having power ready on demand at any time through the demand charge. The purpose was that PUC decided that Xcel should compensate large users for Xcel not having to wheel power to the customer. They decided that large users that install solar systems should be compensated the same as Backup/Stand-by generation.
Community Solar Gardens:
A utility that offers a community solar garden (CSG) program must compensate systems at the rate approved with the utility.
Under the approved retail rates, plus an adder for solar renewable energy certificates, subscribers will get credited approximately $0.10-$0.13/kWh for electricity produced by the CSG.
Energy Storage added to a solar system can be used to not only reduce demand usage, but also supply backup for critical operational items. Storage has now become cost effective. EPF Solar is involved at various levels to make sure we design and size your project correctly.
Currently the storage qualifies for the 30% Investment Tax Credit (ITC) which is significant. There are additional programs that are being looked at but nothing additional in place at the moment.