House Bill 227 seeks to reduce the benefits of solar energy for Kentucky utility customers by changing the way homes and business owners are credited for the electricity their panels produce. That makes investing in solar energy harder for the citizens of this state.
The bill narrowly passed the House and will now be considered by the Senate. Kentucky’s current utility statutes provide for net metering, a system that allows electricity produced by utility customers’ solar panels to be fed back into the grid.
When your panels produce more electricity than you need, your meter runs backward and you get credit for the extra electricity you generate. When you need to use that electricity, your meter runs forward again. The electricity is returned to you at the same rate at which it was credited. This is consistent with how net metering works in most places.
Net metering benefits the customers with solar panels by allowing them to store their extra generation, moving it into the grid where it is used by their neighbors. It also benefits the utility because peak solar generation happens in the hottest part of our summer days when the grid struggles to keep up with everyone’s air conditioning needs.
It’s a win-win. And the utility never pays for the energy generated by solar — the credit simply comes back to the customer in the form of electricity that they can use when the sun isn’t shining. HB 227 seeks to disrupt this fair system by reducing the credit for electricity generated by solar panels on homes and businesses, but still charging full price when those same credits are returned to the customer later. It would be like putting a dollar in the bank and only getting 50 cents back.
Here at the Mountain Association for Community Economic Development we’ve been working to help build a new economy for Eastern Kentucky — one that is more diverse, sustainable, resilient and equitable. One way we approach this is through programs that create jobs while helping our clients save money through energy efficiency, a critical capacity as customers struggle with high utility bills.
In partnership with Rural Electric Co-ops, MACED’s on-bill financing program (How$martKY ™) has supported home energy retrofits that are now saving residential customers in this region more than $160,000 every year. Businesses can save even more by reducing both energy demand and usage.
For example, we helped one grocery business save $100,000 per year by upgrading their warehouse lighting. And we have worked on multiple solar projects, including helping to design the Berea Municipal Utilities Solar Farm. With the cost of solar installations at the lowest they’ve ever been, Kentuckians are looking beyond efficiency to solar power to further reduce energy costs.
In the hard-hit coalfields, interest in solar has been growing rapidly, as homeowners, non-profits, and small businesses are faced with skyrocketing utility bills. In the past year alone, MACED has worked with 14 small businesses and non-profits who are actively pursuing solar for their buildings. Utilities know that solar makes sense.
That’s why both East Kentucky Power Cooperative and LG&E/KU have built utility-scale solar farms in the past year. They understand that our energy future will have to be much more diversified to meet the needs of our citizens — and that clean power has to be part of the mix if we want to attract 21st century businesses.
Net metering is essential to making solar energy feasible, affordable and available to utility customers, not just the utilities. HB 227 is a step in the wrong direction that will slow the growth of Kentucky’s solar industry — an industry that already employs more than 1,200 workers across the state. We should keep moving forward, and promote economic development, by supporting and expanding the fair netmetering rules that are already in place.
Peter Hille is president of Mountain Association for Community Economic Development in Berea. Reach gim at email@example.com.