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Austin Energy’s Value of Solar Tariff: Could It Work Anywhere Else?
Austin Energy’s Value of Solar Tariff: Could It Work Anywhere Else?
Austin’s solar policy framework may just be too weird to duplicate.
ANNIE LAPPÉ, SOLAR POLICY DIRECTOR AT VOTE SOLAR: MARCH 8, 2013
Last fall, Austin Energy become the first utility in the U.S. to offer a “Value of Solar Tariff” (VOST) to its residential electricity customers.
The VOST rate is presented as an alternative to net metering, the bill credit mechanism that has driven most customer adoption of solar in the U.S. today. Some utilities elsewhere in the country are looking to ditch net metering and jump on the VOST bandwagon. But will that be a good tradeoff for current and future solar customers?
...Here’s how the Austin VOST works: When a residential customer, let’s call her Sally, goes solar in Austin Energy’s service area, she is automatically signed up for the VOST. Sally continues to pay a monthly energy bill based on how many kilowatt-hours of electricity she and her family consume. However, now that she has a solar energy system, she is also given a credit for each and every kilowatt-hour her system generates. That credit is subtracted off Sally’s total monthly electricity bill. According to Austin Energy, the VOST rate is set up to more fairly reward solar system operators for the energy they produce. A VOST may soon be developed for commercial customers as well.
The VOST credit applied to a customer’s monthly electric bill is calculated using a value of solar algorithm originally developed by Clean Power Research in 2006. This algorithm is updated annually, and it currently accounts for the following benefits of distributed solar:
- Avoided fuel costs, which is valued at the marginal costs of the displaced energy
- Avoided capital cost of installing new power generation due to the added capacity of the solar PV system
- Avoided transmission and distribution expenses
- Line loss savings
- Fuel price hedge value
- Environmental benefits
If this list looks familiar...
Austin’s solar policy framework may just be too weird to duplicate.
ANNIE LAPPÉ, SOLAR POLICY DIRECTOR AT VOTE SOLAR: MARCH 8, 2013
Last fall, Austin Energy become the first utility in the U.S. to offer a “Value of Solar Tariff” (VOST) to its residential electricity customers.
The VOST rate is presented as an alternative to net metering, the bill credit mechanism that has driven most customer adoption of solar in the U.S. today. Some utilities elsewhere in the country are looking to ditch net metering and jump on the VOST bandwagon. But will that be a good tradeoff for current and future solar customers?
...Here’s how the Austin VOST works: When a residential customer, let’s call her Sally, goes solar in Austin Energy’s service area, she is automatically signed up for the VOST. Sally continues to pay a monthly energy bill based on how many kilowatt-hours of electricity she and her family consume. However, now that she has a solar energy system, she is also given a credit for each and every kilowatt-hour her system generates. That credit is subtracted off Sally’s total monthly electricity bill. According to Austin Energy, the VOST rate is set up to more fairly reward solar system operators for the energy they produce. A VOST may soon be developed for commercial customers as well.
The VOST credit applied to a customer’s monthly electric bill is calculated using a value of solar algorithm originally developed by Clean Power Research in 2006. This algorithm is updated annually, and it currently accounts for the following benefits of distributed solar:
- Avoided fuel costs, which is valued at the marginal costs of the displaced energy
- Avoided capital cost of installing new power generation due to the added capacity of the solar PV system
- Avoided transmission and distribution expenses
- Line loss savings
- Fuel price hedge value
- Environmental benefits
If this list looks familiar...
http://www.greentechmedia.com/articles/read/austin-energys-value-of-solar-tariff-could-it-work-anywhere-else?utm_source=Newsletter&utm_medium=headline&utm_campaign=GTMDaily
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