The Value of Solar: A new study could change the way Los Alamos DPU compensates solar producers. We should tread carefully.
By: Karen Paramanandam
This week, the Los Alamos Board of Public Utilities hosted a hearing on
how to quantify the benefits that solar energy creates for our community.
This is a crucial question. We all know that harvesting New Mexico’s bountiful sunshine can create a cleaner environment, but many of the biggest advantages of solar energy are economic: creating jobs, boosting property values, and reducing energy costs.
Still, the new Los Alamos study on the “Value of Solar” deserves scrutiny for simple reasons: it opens the door to controversial changes in how homes and businesses are compensated for producing energy. And the study, as it stands, ignores many of the most important benefits of solar energy. These are important matters. We should tread carefully.
Currently, through a successful and popular program called net metering, New Mexico residents are able to generate their own electricity and get credit for what they share with the grid for others to use. It’s a simple way to ensure that people who produce power can use it when they need it. While Los Alamos has its own unique version of this program, net metering here—as in the rest of the state—has been effective.
With the new study, members of the Board of Public Utilities could potentially move away from net metering toward a new “Value of Solar Tariff.” Under such an approach, households with solar would purchase all of their energy at the utility’s retail rate, but would be compensated for their power generation at a separate Value of Solar (VOS) rate in dollars per kilowatt hour, which can be lower than the retail rate.
Backers of the VOS plan are hopeful that it would allow the utility to
better account for customers’ needs and to better meet the customer’s
demand for power when the sun is not shining.
But changing to this new approach brings significant challenges. First, it’s difficult to arrive at a consensus on fair compensation for people who generate their own clean energy—which provides valuable peak daytime power to our communities. And secondly, the VOS repayment rates could change over time, destroying certainty for New Mexicans who want to invest in clean energy. Without this kind of certainty, it’s hard for people to invest in solar. And, if people don’t invest, the industry would struggle and thousands of quality New Mexico jobs would be at risk.
The VOS study presented in Los Alamos on Wednesday night concluded that solar is indeed a valuable resource. But the study really just scratched the surface. The research assessed the value of solar generally but not in Los Alamos specifically. It failed to account for crucial elements of solar energy’s value —from reduced water usage for energy generation to job creation from solar installation to improved air quality, domestic energy independence, and reduced carbon emissions.
Net metering is the proven, popular, established method for fairly compensating people for investing in clean energy for our state. It has worked to grow an industry that employs thousands and that helps to clean the air, protect the water, and inspire our people. Let’s not mess with success.