The primary threat to a strong Ohio State solar policy would be any reversal of current laws regarding net-metering. Net metering replaces the need for consumers to purchase batteries for energy storage. The utility grid is used as a nascent battery bank. Solar energy clients have a bi-directional meter installed at the time their solar energy system goes online. If a client produces more electricity over the course of a day then she consumes, the excess electricity is shunted back onto the grid and the consumer usually gets credit at retail rates for electricity generation.
According to the PUCO website, the credit you receive for electricity you produce and distribute back onto the grid will produce a credit. This credit, “…can be used to offset charges in future months. As a net metering customer, you may also request in writing a refund that amounts to an annual ‘true-up’ of accumulated credits over a 12-month period.” However, under net metering, all charges are not subject to the credit. “The net metering credit is limited to kilowatt-hour (kWh) charges only. Net metering customers are not reimbursed for distribution or transmission services. If you have a demand (kilowatt) meter these charges also will not be reimbursed.”
The altering or reversal of net metering would force solar clients to purchase battery back-up systems to store their energy for use when the sun is not shining.
Utility companies do charge fees for distribution and the use of their grid. The alternative for not connecting to the grid is using a battery back-up. In the United States 99% of all solar energy systems are connected to the grid while only 1% of all systems are completely off-grid. Between 3-5% of all systems do have some type of battery back-up. The utility grid in the United States does need an overhaul, as reported by the D+ rating that the grid received by the American Society of Civil Engineers. However, the grid is not unreliable as in many developing countries.
As it currently stands, the cost of installing a 4 kW battery back-up system would be $10,000 to store enough power to completely bypass the grid for the average-sized system. This would also add years back to the payback for a solar energy system, making the cost less competitive than if we could just connect directly to a functioning grid.
Prospects For The Elimination of Net Metering
In short, the elimination of net metering policy is the most pressing threat that solar has in Ohio. It would take a tremendous political effort combined with deep financing by net metering opponents to reverse policy.
The alterations that might be proposed that cause the most concern would be:
Utilities pursue a policy limiting the amount of power that they would have to accept back onto the grid, thus creating a “ceiling” on acceptance of renewable energy.
New customers would be charged and credited at different rates for generating solar energy, thus creating uncertainty of what the economic payback for solar truly is.
Utilities start to charge higher fees for distribution and lower fees for generation. This would reduce the economic incentive of home and business electrical generation.
With new jobs reports coming out showing that Ohio gained over 1,000 new jobs in solar during 2016, along with Governor Kasich’s veto of the political environment for solar would seem to be more favorable in years past. However, there are rumblings from key legislators in the state that solar policy will be examined more closely. This is an issue that will need to be watched going forward.