A bill has been advanced in the Arkansas House of Representatives to cut the net metering rate that residential solar customers receive for their excess energy.
House Bill 1787 would change the structure of net metering so that solar customers receive a credit equal to the utilities’ avoided-cost rate for their excess power. The wholesale rate is currently around 3 cents/kWh. As it now stands, the retail rate for net metering is about 11 cents/kWh.
Bill proponents justify the proposed rate cut, saying the current structure shifts cost burdens from solar customers to other utility ratepayers. They argue that the net metering rate is higher than if the utilities procured power elsewhere; doing so forces non-solar customers to pay more.
This is a frequent argument that typically overlooks the benefits that distributed generation brings to the table, beyond just electricity.
Lowering the net metering rate also throws a wrench into project payback timelines for Arkansas homeowners. Those who have already installed systems could see years added to those payback periods. Those considering installations could find them to be financially unviable.
Residential solar has already had a tough time in Arkansas, which has just 381 MW of solar installed. Of that capacity, most has come from utility-scale projects. If the proposed net metering structure is approved, it could hurt residential solar’s viability.
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