City mulls scaling back solar incentives
Published: Wednesday, February 20, 2013 at 4:30 p.m.
Last Modified: Wednesday, February 20, 2013 at 4:30 p.m.
The Gainesville City Commission is considering whether to shut out the lights on the solar feed-in-tariff program in the next few years.
Citing significant growth in the number of installations and upward rate pressure from incentives, Gainesville Regional Utilities staff has recommended a series of steps to scale back the city's solar programs. One staff recommendation would reduce the amount of new capacity added annually to the feed-in tariff from the current 4-megawatt cap.
During Tuesday evening's Regional Utilities Committee meeting, commissioners and staff broached the possibility of sunsetting the tariff, which pays a premium for solar-generated electricity.
"I very much get the sense we've got to the point where the feed-in tariff has done its job," said City Commissioner Lauren Poe, the chair of the Regional Utilities Committee.
When the city started the program in early 2009, 283 kilowatts of solar capacity was installed in the Gainesville area, said Lewis Walton, marketing and communications manager for GRU. Today, more than 15,500 kilowatts is installed.
The premium paid for solar-generated electricity currently tacks on about $2.40 per 1,000 kilowatt-hours to customer bills.
Given the growth in solar, Mayor Craig Lowe, who also serves on the RUC, said, "we are getting to the point where we could look at phasing out the feed-in tariff" next fiscal year or the year after.
The tone of commissioners' discussion Tuesday evening was a departure from some meetings last year.
Then, GRU's identified options for limiting rate increases associated with the biomass plant included the possibility of no longer adding projects and capacity to the feed-in tariff.
But that idea did not gain traction last year with the City Commission. Commissioners voted 6-1, with Todd Chase in dissent, to make capacity — including commitments for projects that went unbuilt last year — available through the program this year.
Last week, an additional 2.4 megawatts of capacity was awarded through the solar feed-in tariff for this year.
It remains to be seen when the RUC again will discuss the future of the feed-in tariff or when the issue will go to the full City Commission.
In addition to the feed-in tariff, GRU staff has recommended changes to its net metering program, which allows solar system owners to receive a credit against their bill for electricity they generate and payment for electricity generated beyond their usage.
Currently, the city pays a retail rate for that excess electricity instead of the lower "avoided costs" rate that reflects how much it would cost GRU to generate that power at one of its plants.
Against that backdrop, staff raised issues with solar systems in the net metering program that are designed and built to generate more electricity than the buildings that they are on use.
"Some people applied to get in the feed-in tariff and didn't," said Kathy Viehe, GRU assistant general manager for customer support services. "Other people are getting around the FIT (feed-in tariff)" to create their own tariff through the net metering program.
Two specific solar arrays came up during Tuesday's discussion — the installation atop McGurn Management Company's downtown parking garage and a 100-megawatt installation on the roof of AMJ Inc.'s Plaza Royale off Newberry Road.
GRU has not yet signed off an agreement to connect that Plaza Royale system to the GRU grid.
Barry Jacobson with Solar Impact, the firm that installed both systems, said each array complied with the rules of the GRU program.
"What these guys did is exactly what the rules said they could do," Jacobson said.
GRU General Manager Bob Hunzinger said utility staff's recommended scenario would pay the owners of all systems in the net metering program — current and future — the lower "avoided costs" rate for excess electricity generated above a building's usage.