by Paul Gipe
June 27, 2005
Portions of the following has been adapted from Wind Power: Renewable Energy for Home, Farm, and Business (2004) by Paul Gipe.
The renewable lists buzz with discussions about net metering. Renewable’s advocates spend hours, days, years even trying to implement net metering over utility objections. Why bother? Net metering is often so limited to be next to useless, and even where it is used to some extent it accomplishes little.
Of the states with net-metering, only a few permit use of any size wind turbine the customer chooses. In this age of “customer choice”, the consumers should indeed have a choice about the size of the wind turbine they want to use under net-metering programs. Most programs limit wind turbines to 10 kW or less. Some permit up to 50 kW. A few go as far as permitting 100 kW. An even smaller number permit wind turbines up to one megawatt. The reason for setting limits? Politics. Caps on wind turbine size protect utility markets. Utilities accept net-metering programs with low caps because the programs pose no serious threat.
However, utilities have little to fear. Net-metering is self-limiting. Only those whose consumption can absorb all the production from a large turbine will choose to net meter. Customers such as Iowa’s Schaefer Systems and Spirit Lake School will opt for larger turbines, because it makes economic sense to offset as much of their load as possible. Those for whom a 10-kW turbine is a closer match to their needs will choose a 10-kW machine. Artificial limits are unnecessary.
In the end though, net metering won’t get us where we want to go: large amounts of various renewable technologies in the ground.
Why? Because in most cases the price offset is insufficient alone to drive renewable development. Subsidies are needed and subsidy programs have had a checkered history in North America. Most subsidy programs have led to widespread abuses that have hurt renewables. Even today most subsidy programs have no requirement for metering actual generation, one of the fundamental means for monitoring the success or failure of renewable programs.
Europeans roll their eyes when North Americans speak of net metering. “Was ist das?” They can be heard saying. They don’t bother with net metering.
How then can Europeans be so successful if they don’t use net metering. How can they have installed so much generating capacity that the Danes produce 20% of their electricity with wind turbines, the Germans 9% with wind, solar, small hydro, and biomass, the Spaniards 6% with wind?
The answer is surprisingly simple: they pay for it. They pay for renewables by setting a price per kWh for wind, for solar pv, for hydro, and for biomass. They set a price high enough to ensure that they get the kind of renewables they want. Germany pays US$0.11/kWh for onshore wind, a whopping US$0.75/kWh for solar pv, and nearly US$0.15/kWh for small, farmer-owned biomass projects. The results speak for themselves.
All consumers pay for the resulting generation. There are no tax-payer subsidies involved. You use more electricity, you pay more for renewable generation.
Fortunately, the concept is beginning to catch on here in North America: Minnesota passed its C-BED proposal for wind in May, and Washington State recently signed it’s solar pv program that could pay as much as US$0.54/kWh for electricity produced by panels built in the state. And the list is continuing to grow as more states weigh the advantages of what the Europeans call Advanced Renewable Tariffs or more prosaically known as Electricity Feed Laws.
Paul Gipe is the author of Wind Power: Renewable Energy for Home, Farm, and Business (ISBN: 1-931498-14-8), 2004.