(in The Solar Reflector of January 1, 2016)
By Ross Pumfrey and Ron Zagarri
More than three million Texans, mostly in rural areas, receive their power from electric cooperatives. There are 75 such Texas co-ops, ranging in size from the largest in the country, Pedernales, with more than 270,000 members, to much smaller organizations with less than 10,000 members.
Like all utilities around the country, Texas co-ops are gradually adopting new business models in response to their members’ desire to generate their own electricity renewably while still being connected to the grid. This phenomenon, a form of distributed generation or DG, represents a revolution in the relationship between utilities and the people they serve.
According to data gathered by the U.S. Energy Information Agency, a majority of Texas’ co-ops have established DG programs in recent years.
The Texas Solar Energy Society recently surveyed four co-ops to learn more about their solar-related programs for both their residential and commercial members. These co-ops represent a cross-section of the state in terms of geography and membership size and exhibit a range of policies and approaches.
Our survey uncovered co-op adoption of another type of solar program gaining traction around the country—so-called community solar or shared renewables. Although these terms have encountered problems in usage, we rely on the definition offered in the National Renewable Energy Laboratory’s Guide to Community Solar, adding a one-word clarification ourselves (in brackets):
“Community solar is a [local] solar-electric system that, through a voluntary program, provides power and/or financial benefit to, or is owned by, multiple community members.”
Such a program can be attractive to co-op members who, for various reasons, cannot or choose not to install solar panels on their property. A community solar facility can benefit from economies of scale compared to on-site, rooftop DG, and therefore deliver solar energy at a cost competitive with the latter.
Distributed Generation
All four of the surveyed co-ops have adopted DG policies and tariffs. The policies differ, however, with respect to specific billing procedures, incentives, and requirements.
Each co-op supports DG via a net metering policy. Net metering is a billing mechanism that credits solar energy system owners for the electricity they add to the grid. For example, if a residential member has solar panels on the home’s rooftop, the system may generate more electricity than the home uses during daylight hours. If the home is net-metered, the electricity meter will run backwards, thus providing a credit against electricity consumed at night or during other periods in which the home’s electricity use exceeds the solar panels’ output. Therefore, customers are only billed for their “net” energy use. This policy is advantageous to the system owner since it effectively values solar energy at the retail rate.
The differences occur with regard to how each co-op values excess solar energy. Excess energy occurs when the solar system generates more electricity in a given billing period than the member consumes.
The number of DG installations reported by each co-op is given in the following table.
Bartlett Electric Co-op
Bartlett offers net metering for any distributed facility of 20 kW of capacity or less. If any excess energy is generated in a given billing period, Bartlett rewards the system owner by carrying over the excess to the subsequent billing period. The billing system applies that carryover credit to reduce the amount of energy billed to the member in the subsequent month. This procedure is beneficial to the system owner because it effectively values excess solar energy at the retail rate.
Each January, Bartlett determines if any excess electricity still remains from the previous 12 months. If so, Bartlett credits the member for the excess at their wholesale rate, which is their average cost for purchase of wholesale energy in the previous year.
The co-op does not charge a connection fee nor any solar-specific monthly fee, and does not explicitly require liability insurance, although the DG contract makes the owner fully liable for design, construction, and operation.
The co-op has two pages on its website that together offer full information on interconnection policies: one page containing information on tariffs and one containing its Distributed Generation Manual.
CoServ
CoServ offers net metering for distributed installations up to 50 kW, but does not pay for any excess generation. CoServ grants a $1,000 DG rebate for systems 2 kW or larger, until the annual rebate funds are exhausted. They expect the rebate policy will be modified in 2016.
CoServ does not charge a connection fee for systems smaller than 5 kW, but does charge $25 for systems 5 kW and above. There is a $20 monthly customer charge for members with DG, compared to the standard $10 monthly charge. Liability insurance is required, but there is no minimum dollar amount.
CoServ offers information on its interconnection policies on its website.
Mid-South Synergy
Mid-South offers net metering for systems up to 30 kW. The member is credited at the retail rate for any excess generation.
There is no connection fee or DG-related monthly charge for DG systems.
Mid-South requires that members with DG have liability insurance of $250,000 per occurrence and that Mid-South Synergy be listed as additionally insured.
Mid-South does not provide information on its interconnection policies on its website. A Mid-South representative stated that such information is available at a member’s request, adding that “Generally we prefer to have a conversation with the member interested in DG applications so we can answer questions and educate them before they start their project.”
Pedernales Electric Co-op (PEC)
PEC offers net metering for installations of up to 20 kW. Excess generation is credited at PEC’s avoided cost rate (similar to wholesale rates). As of December 2015, the rate was $0.05826 per kWh.
PEC has no connection fee, unless there are upgrades necessary for their distribution system, and no DG-related monthly fee. Liability insurance is required, with no minimum coverage amount specified.
PEC offers extensive information on its interconnection policies on its website.
In 2016 PEC will begin offering its members loans and on-bill financing for installation of solar panels. The maximum amount will be $20,000 and the term will be 10 years. Also in 2016, PEC hopes to implement an online DG application.
PEC is currently reviewing all aspects of its interconnection program. It is examining options that could potentially increase the maximum allowable size of a DG installation for net metering, increase the price the co-op would pay for excess generation, and possibly introduce time-of-use policies both for normal tariffs and excess generation payments.
Also, each fall for the past five years, PEC has collaborated with the Texas Solar Energy Society to organize the Hill Country Solar Tour, a solar home tour for all interested parties. In the past two years an Installer Fair has been added to this event.
Community Solar
Two of the four co-ops operate their own local solar installations and offer members subscriptions to the energy produced, and a third is planning such a facility. Only Bartlett does not yet have plans in this category.
CoServ operates a 2 MW (AC) CoServ Solar Station in Krugerville. Members can subscribe to one to four blocks of 200 kWh each per month of solar energy at $25 per block (or $0.125/kWh). The co-op’s website contains more information on this program. Also, CoServ has produced a YouTube video about the facility.
Mid-South Synergy operates a 1.2 MW Synergy Solar plant in Bedias. Members can subscribe to one to five blocks of 100 kWh each per month at $12.50 per block (or $0.125/kWh), with the price locked in for five years. A page on the co-op website describes the program.
PEC has been planning a utility-owned facility and recently released an RFP for a 1-2 MW system. Subscription terms will be developed after system costs are finalized. They intend to add more community solar in the future.
Ross Pumfrey is Vice-Chairman of TXSES and recently retired from a long career in renewable energy on the state, national and international levels.
Ron Zagarri is a TXSES volunteer who is very interested in solar technology. He enjoys the annual InterSolar North America convention in San Francisco and has regularly attended since 2009.
The authors appreciate the advice provided by Scot Arey, chairman of TXSES, during the development of this article, and the information provided by staff of the four co-ops.
Note from TXSES Executive Director: In 2016 TXSES will explore the possibility of obtaining funding for the purpose of surveying all Texas electric co-ops with a set of questions similar to those addressed in this article. LS