One of the proposal’s by the electric companies to increase their revenue from people with solar panels is a so-called “minimum bill.” Here’s what it would mean…
Last year when the net metering cap was hit, the electric utilities used that as a bargaining chip to increase their long-term revenue from owners of solar panels. One of the results of this was the setup of the Net Metering and Solar Task Force, a group setup to look at ways that future net metering caps could be extended to increase the capacity for solar in the state but in a way that provided additional income to the electric providers. Basically, they had something that the people of the state wanted and they weren’t going to give it freely.
One of the proposals on the table is the creation of a “minimum bill” for solar panel owners so they would still pay money even if they generated more electricity than they consumed, allegedly for the maintenance of the grid. This post details how that plan would work in case it is approved. I have simplified the numbers to make the math easier, assuming a $10 monthly minimum bill.
- In each of July, August and September, let’s say you generate $100 more electricity than you use. Since your electric bill is less than $10, you would be subject to the minimum bill and would need to pay the electric company $10 each month. Your $300 in excess generation would be “banked” for use in future months.
- Now let’s assume you produce exactly what you use in October and November. You would again pay the $10 monthly minimum and your bank would remain at $300.
- In each of December and January, you use $150 more than you generate. Your bank would reduce the $150 charge down to zero but since that is less than $10, you would still need to pay the $10 minimum each month. Your bank has now been depleted.
- In February and March, you use $100 more than you generate. Since your bill is higher than the minimum, you would pay the $100 and the minimum would not apply.
Note that this exact model has not been approved yet but is the main variation they’re looking at. Nor have they settled on how much the minimum will be but I expect it to be somewhere between $3 and $20.
The closer your generation is to your usage, the more months you will be hit by the minimum. And if you generate more than you use annually, you will be subject to it every month.
Looking at my last post, How to Increase Your NStar Solar Credits by Almost 20%!, I would be hit for the minimum 8 months a year.
Hopefully, representatives for solar panel owners on the task force will reach an agreement that makes sense for both us and the utilities.