A bill making its way through the General Assembly could help policymakers help buy time to reconsider the role of home solar arrays in Delaware’s energy market.
Years before the price of solar panels began to fall within reach of many consumers, Delaware and other states introduced incentives to encourage homeowners to install solar arrays, namely by offering a credit on their electricity bills for the retail value of every kilowatt hour of electricity they contributed to the grid rather than using in their home — a practice known as "net metering."
"That worked pretty well, and then the price of solar went down," says Delaware Senate Environment, Energy and Transportation Committee chair Stephanie Hansen. "Since then, we've had to account for the fact that the credit a person receives on their bill covers more than just the cost of the energy they used."
Hansen explains that households could apply the credits they received not only to their energy bill, but also the charges they would otherwise pay to cover the maintenance and installation of new grid infrastructure. "That was fine when there weren't many people with home solar arrays," she said.
But with a growing number of Delawareans installing solar arrays, Hansen says households without solar arrays — often lower-income — are increasingly bearing the costs of maintaining and adding new grid infrastructure. “The continued cost shifting over to our more distressed communities is just not a public policy that we wanted to continue," Hansen said.
As that policy challenge appeared, utilities companies also warned that they were receiving more electricity from home solar arrays than they could manage sustainably.
Delaware allows utilities to stop net metering if the amount of energy entering their system from home solar arrays exceeds a set maximum. In response, solar companies warned that an end to net metering would slow the pace of new installations and wreak havoc in their industry.
Last year, Hansen led an effort to balance the interests of utilities providers, solar companies and households with and without solar arrays.
The product of that effort was a bill that raised the cap on the amount of electricity that home solar arrays can contribute to the total energy supply from five to eight percent — an intervention to avoid bringing the solar industry to a standstill.
The bill also required households with solar arrays to pay some charges on their electricity bills — contributions to the Green Energy Fund, for instance — and returned any credits leftover at the end of a year to utilities companies. Hansen says both measures were intended to limit the costs shifted to customers without home solar arrays.
Delmarva Power and Light, the state’s largest utility, struggled to update its billing system in time to comply with last year's bill, prompting Hansen to introduce legislation this year to give the company additional time to catch up. That legislation passed in the Senate on Thursday afternoon.
Hansen says that these interventions buy time for policymakers and utilities to consider how to better-integrate home solar arrays into Delaware's energy market.
One significant remaining challenge are residential customers whose solar arrays generate far more energy than their household will use; Hansen says that while state code requires home solar arrays to generate no more than 110 percent of a household's expected energy usage, some systems — intentionally or unintentionally — exceed those limits, allowing their owners to shift more costs onto other customers.
Delaware's agricultural sector presents another challenge: farms' energy usage can vary widely from year to year, so year-end credits are far more vital to the operations of farms with solar arrays than they are in a residential setting. Last year's bill provided a carve-out to allow farms to collect year-end credits for the energy they contributed to the grid.
"It is going to take time to find the right balance as we adapt our grid," Hansen said. "The stakeholders are working together to try and adapt."
