In a move to protect their bottom line, some less-progressive U.S. electrical utilities are modifying their Net Energy Metering (NEM) rules. NEM broadly defines a long-standing class of consumer agreements that incentivize the installation of residential solar power systems by allowing households to sell excess electricity back to local utilities in exchange for credit, or even cash rebates. These cooperative agreements between homeowners and their utilities typically reduce the household electric bill by an amount equal to the amount of solar power a system returns to the grid. If a household relies on a utility for $150 worth of electricity each month and is able to generate $150 (or more) worth of solar energy that is exported to the grid, the household will pay nothing to the utility at the end of the month. Any production in excess of a given month’s demand is typically banked by the utility and available to the homeowner for free at a later time; a tremendous value.
NEM and Federal income tax credit (ITC) programs have played a major role in the rapid growth of solar over the last decade as they allow homeowners and businesses to easily access the value of the solar energy they produce and expedite their return on an investment in a solar power system. Despite the benefits being reaped by homeowners, these programs are being threatened by policy changes.
One of the earliest and more drastic examples of negative change occurred in 2015 when “NEM 2.0” was instituted in Hawaii, all-but eliminating the option of fair-exchange (one-to-one) NEM agreements and largely prohibiting traditional grid-tied solar generation for new solar buyers. The change came in response to the overwhelming adoption of residential solar energy in the state which was causing trouble for the entities that maintain the grid, but also made it more difficult for homeowners to access affordable energy. Because Hawaii has the most expensive electricity in the United States, cutting-edge technologies like solar plus storage systems have already become commonplace as consumers seek ways to cut their energy bills.
Off-island, energy storage systems are steadily becoming a commonplace solution for a wide variety of energy related issues. Whether energy costs are too high (as in Hawaii), too variable (as in California), or a home is vulnerable to power loss (as in hurricane prone areas), a smart solar-plus-storage system like the Pika Energy Island can help. The Pika Energy Island works with solar panels to generate and store more solar energy than other systems, thanks to our efficient, patented power electronics and first-class lithium-ion battery technology from our partners at Panasonic. Homeowners are using the Pika Energy Island to store power generated by solar panels during the day to power their homes with batteries when the sun (or grid) goes down; saving money and reducing their reliance on their utility.
A compliment and an alternative to grid power, solar-plus-storage systems and storage-ready solar systems are giving consumers a new kind of freedom from their utility, working as effective hedges against unfavorable rate changes. In the Midwest, where small, privately owned electric co-ops provide most of the power, it is common for NEM agreements with homeowners to change, often for the worse, undermining the value of solar for homeowners. In some cases, these electric co-ops and utilities are also imposing time-of-use (TOU) rates, in an attempt to further erode the value of PV-only systems.
“I literally meant it when I told them that the Pika system provides the protection from anything that the utility throws at you.”
Phil Teague, owner of Indiana-based Rectify Solar, was faced with a problem when his client’s utility indicated that it would not honor it’s NEM agreement. By installing the Pika Energy Island, Teague was able to protect his customer from any potential threat to the value of the customer’s solar installation.
“If the city … approved the removal of net metering, [the homeowner] could have a battery system to receive their full cost savings. If the utility banned solar, I could take part of their home off grid. If the utility decided to tack on an additional fee, I could take them off grid. If the utility decided that they could not export any energy, I could install a battery and put the system on zero export,” Teague explained. “I literally meant it when I told them that the Pika system provides the protection from anything that the utility throws at you.”
A smart solar-plus-storage system puts homeowners in control of their energy, a conclusion described in a 2015 report by the Rocky Mountain Institute, which suggested that a combination of solar panels and storage batteries is enough for homeowners to free themselves from their traditional utility service without giving up the reliability that it offers. The combination may even end up being less expensive in the long run, according to the report.
If you are considering making a solar investment for your home, purchase a system that will give you the flexibility to add a battery in the future. The Pika Energy Island is the most powerful battery-ready or solar-plus-storage system on the market, with more combined capacity, efficiency and capability than any other system available. For more information about Pika Energy Island and how to purchase a system, fill out this contact form.