December 31 Is The Deadline To Install Private Solar Generation

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Vectren Energy Delivery of Indiana-South (Vectren) is reminding customers who are interested in installing private (customer-owned) solar generation systems through Vectren’s net metering program that Dec. 31, 2017, is the deadline by which their private generation unit must be installed to be credited at the full electric retail price for the excess power they generate over the next 30 years.

As such, customers, especially businesses planning larger solar installations, are encouraged to apply for interconnection of their private solar generation to Vectren’s electric system no later than late October, to ensure adequate time for their proposed system to meet all requirements and to be installed by year-end. The new laws for customers with existing systems as well as for those who plan to install are as follows:

  • Customers with systems installed by Dec. 31, 2017, will be credited at the full retail price* for excess power put back on the grid until 2047. After 2047, excess power will be credited at the market/wholesale price** plus a 25% premium.
  • Customers with systems installed between 2018 and 2022 will be credited at the full retail price for excess power put back on the grid until 2032. After 2032, excess power will be credited at the market/wholesale price plus a 25% premium.
  • Customers with systems installed after 2022 will be credited at the market/wholesale rate plus a 25% premium for excess power put back on the grid.

“We want to ensure our customers have a clear understanding of what needs to be completed by the Dec. 31 deadline,” said Brad Ellsworth, president of Vectren Energy Delivery Indiana-South. “Our staff will do everything possible to accommodate all private solar installation requests.  The sooner that customers commence the interconnection process, the better the ability to address any issues and enable the installation to be complete by year end as required by law. We have already contacted local solar contractors to remind them of this upcoming deadline whereby they can effectively communicate to potential customers and have access to our staff to expeditiously review and complete applications.”

The retail credit grandfathering deadline for excess power generated by these customers’ private solar systems was provided for in Indiana Senate Enrolled Act 309, which was signed into Indiana state law earlier this year. This law outlined a long-term policy to phase out customer subsidization of private solar and other private generation resources.

Under SEA 309, the net metering cap, or maximum amount of private generation on Vectren’s system that will be credited at the full retail price for energy, was increased from 1% to 1.5% of Vectren’s retail peak load. Therefore, the total amount of private generation that can qualify for Vectren’s net metering program is now 16.5 megawatts (MW). Of the 16.5 MW:

·         40% of the 16.5 MW must be reserved for residential customers; and

·         15% of the 16.5 MW must be reserved for biomass/agricultural projects.

If the 1.5% cap is reached prior to the end of 2022, all customers who install private generation and interconnect with Vectren thereafter will be credited at the market/wholesale rate plus a 25% premium for excess power put back on the grid.

Today, Vectren has about 250 customers on its net metering program generating a total of 3 MW of energy. These customers need to take no action and will automatically be grandfathered for 30 years.

The policies outlined in SEA 309 apply to the property and power generation system – not the property owner – and will continue regardless of a transfer of ownership of the property. Larger, non-residential customers planning to install a renewable power generating system should plan to apply by mid-October to ensure installation is complete by the December 31 deadline.

Not all forms of private generation qualify for the credit at the full electric retail price, which is often referred to as “net metering.” More information on private generation and the net metering interconnection process, including applications, a customer check list and guidelines to establish service; can be found at Vectren.com/netmetering.

For additional information on SEA 309, visit the Indiana General Assembly’s website.

FOOT Note: *Retail price: The full price per unit a customer would pay Vectren for a kilowatt hour of electricity. The retail price accounts for the price of the power consumed, including the generation units and fuel costs needed to generate the electricity; costs to access and maintain the entire electric grid; and various customer service fees for billing, metering and energy efficiency programs.

**Wholesale/market price: The price Vectren would pay if the power the customer generated was purchased on the wholesale market. The wholesale (or purchase in large quantity) price for power is typically 25 to 30% of the retail price.