Vermont PUC issues update on state’s net-metering program

The Vermont Public Utility Commission recently issued an update to the state’s net-metering program.

Every two years, the commission must recalculate the value of the bill credit that net-metering customers receive for energy produced by their net-metering system. This recalculation is done to reflect changes in retail electric rates since the last biennial update. This is known as the “statewide blended residential rate,” which has increased by $0.01257 per kWh since 2022.

As a result of the adjustments, future net-metering systems that apply for permits on or after Aug. 1, 2024, will see a small net decrease in compensation – about three-fourths of a cent – compared to
what existing systems receive today.

Most existing net-metering systems will see a 7.33 percent increase in their compensation because of concurrent increases in statewide electric rates.

The commission assesses the incentives and overall compensation offered to new net-metering systems to determine if they should be adjusted. The purpose of this adjustment is to ensure that the pace of net-metering deployment is consistent with Vermont’s policy objectives while considering the impact on electric rates. Considerations include the changing cost of installing net-metering systems, the
pace of past net-metering deployment, and the impact of net-metering on all ratepayers.

This year, these considerations led to a 2-cent decrease in overall compensation for new systems
applied for on or after August 1, but the net effect because of the increase in retail electric
rates discussed above is a decrease of only three-fourths of a cent.

The program allows customers who install net-metering systems, such as solar panels and small wind turbines, to offset their electric bills through financial incentives based on the amount of electricity generated by their net-metering systems.

“Vermont’s efforts to address climate change will require a significant transition to electric vehicles and heat pumps powered by carbon-free electric generation. Even with the $0.00743 per kWh reduction in net-metering compensation for new systems, Vermonters continue to pay significantly more for net-metering compared to equivalent new renewable generation sources. Going forward, Vermont should be prioritizing least-cost renewable generation to meet our climate and renewable requirements,” Commission Chair Ed McNamara said.

This review showed that the net-metering program – in particular, solar net-metering – continues to have robust participation. In 2023 alone, 2,351 new net-metering systems, for a total of approximately 25 megawatts (MW) of new, renewable energy capacity, received certificates of public good (CPGs) from the
commission.

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