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Renewable Operators ‘Prefer’ Net Metering

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Bahamas Power & Light’s (BPL) ‘small-scale renewable generation’ proposal has been hailed as “long overdue” by industry operators, despite misgivings over the chosen compensation method.

Guilden Gilbert, vice-president of Alternative Power Sources (Bahamas), told Tribune Business that he would have “preferred” net metering, rather than net billing, as the mechanism through which BPL compensates homeowners for selling excess energy back to the grid.

He explained that, under net billing, residences with renewable energy systems would essentially be “paying a continual fee” for the privilege of having such technology, given that BPL would be paying them less than its own retail price.

However, Mr Gilbert said renewable energy industry sentiments were that the plan produced by BPL, and released by the Utilities Regulation and Competition Authority (URCA), was better than the status quo.

He added that it would at least permit the implementation of grid-tied, renewable energy to “move forward” in the Bahamas, helping to close the gap on Caribbean rivals such as Jamaica and Bermuda.

“It’s long overdue,” Mr Gilbert, a former president of the Bahamas Renewable Energy Association, told Tribune Business.

“I think the Bahamas is very much behind, but this plan, these changes, will help to bring it more into line with the rest of the region. It’s very similar to what Jamaica and Bermuda have done, and other jurisdictions that have grid-tied systems in place.

“As far as becoming competitive, I don’t see it as the Bahamas competing with other jurisdictions. It’s really a matter of the Bahamas looking at how we can reduce our use of fossil fuels.”

Mr Gilbert also expressed hope that BPL’s ‘small-scale’ renewable generation proposal would be a stepping stone that eventually leads to commercial, utility-scale solar photovoltaic (PV) generation in the Bahamas - which is something URCA’s document hints at.

The BPL plan, which URCA released last week for public consultation and feedback, represents an attempt to provide homeowners with renewable systems the so-called ‘rules of the game’, setting out the terms and conditions under which they may tie-in and sell to the monopoly utility’s grid.

Suggesting that it was seeking to “accelerate” this process, and the uptake of renewables in line with the Government’s National Energy Policy (NEP) goals, URCA said: “Residents and businesses within BPL’s service areas that have already installed solar panels and storage equipment can have certainty regarding the legality of, and required inspections and required approvals for, their existing activities, and clarity over the potential for future impacts on their investments.

“Suppliers of solar panels and storage equipment, as well as consumers considering installing panels and storage equipment on their properties, can take advantage of changes in the existing legal framework.”

The BPL plan is effectively the reintroduction of the Renewable Energy Self-Generation (RESG) plan previously announced by the Government, which was suspended in late 2015 to ensure it dovetailed with PowerSecure’s takeover of the utility’s management.

Mr Gilbert pointed out that the latest limits on how much each renewable energy user could supply back to the BPL grid were the same as in the RESG plan for all plans.

He acknowledged that this was “not unusual”, given that BPL and other utilities wanted to know who was supplying energy to their grids, and how much, so they could ensure stability was maintained.

Mr Gilbert, though, disagreed with BPL and URCA’s preference for ‘net billing’ as the mechanism that would compensate renewable energy system owners for the excess power supplied to the former’s grid.

“Our preference would have been to have net metering rather than net billing,” he told Tribune Business. “With net billing, you continuously pay to have your system on the roof.

“They’re not going to pay you the retail value of electricity; the price they [BPL] sell to customers at. They’re going to pay you a percentage of that. Say they sell at 37 cents per kilowatt hour (KWh). They will pay the small system operators, more than likely, 15-17 cents per KWh, in my estimation.”

Mr Gilbert continued: “What’s going to happen is that during the day, when you’re turning your meter back and selling to them at 15-17 cents per KWh.

“When you buy the power back at night, if you don’t have storage batteries, you’re buying back at the full retail price. The difference is essentially an ongoing fee to have a system on your roof.”

Mr Gilbert added that most homes’ peak power usage was at night, rather than in the day, adding: “That’s why we would prefer to see net metering.”

Tribune Business revealed last week how URCA is proposing to permit BPL to initially “undervalue” the price it pays to purchase renewable energy generated by its residential customers.

While utilities typically pay a price equivalent to their ‘avoided cost of generation’ under a net billing arrangement, BPL is only willing to pay consumers a price equal to its then-prevailing fuel charge.

URCA acknowledged that BPL’s proposed compensation to homeowners actually “undervalued” the excess energy it was buying.

Yet the regulator, in its preliminary decision, said it was minded to allow this as a “temporary measure”, in a bid to both kick-start renewable energy development in the Bahamas and avoid “the significant costs” that will be incurred in calculating BPL’s ‘avoided cost of generation’.

But, despite the differences over compensation mechanisms, Mr Gilbert said most Bahamas-based renewable energy systems installers and suppliers were prioritising having a plan in place as opposed to the content.

“I think I can safely speak for the industry: Let’s get on with the plan, and move the implementation of solar forward in this country,” he told Tribune Business.

“Our position on this at this point in time is: Let’s get something in place so that those with systems or wanting to install systems don’t have any concerns as to the legality of having them.”

Mr Gilbert also called for BPL’s small-scale generation plan to be a “living document”, not something that is “inked in stone”, so that it can be amended as necessary.

Comments

The_Oracle 2 years, 10 months ago

Net Billing is NOT ACCEPTABLE as it does not allow for financing and owner return on investment, two critical components to getting Alternate energy off the ground here. Net billing allows the Power Company to erode owner return on investment at will, via URCA manipulation, and marginalize any financing potential. Note that U.S. Utilities are Net Metered but have been pushing for this same short stick deal, with little success thankfully. If URCA and Government accept this lopsided "deal" it confirms they don't really want it in the Bahamas.

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