Editor's note: This story has been changed to correct the Regulatory Commission of Alaska's limits on net metered generation.
Though the Kenai Peninsula’s wind feels more powerful than its sunshine, the sun is generating about twice as much electricity among Homer Electric Association members participating in the utility cooperative’s home renewable energy program.
Speaking at Seward’s Energy Forum and Fair on Friday, HEA engineering project specialist Tyler Cheatwood took note of the trend toward solar. Cheatwood directs the utility cooperative’s net metering program, which allows members to deduct home-generated power from their electricity bills. Dropping solar costs are making it a more accessible option than wind for those interested in making their own electricity while still staying on the grid, Cheatwood said.
“Unlike a wind generation site, where you have a big investment getting this tower up in the air, you can put in two solar panels and test it out,” Cheatwood said. “And if you like how it works, you can add two more panels the next year, or you could add 15 panels the next year.”
So far, all of the HEA’s net-metering users run either solar systems or windmills. Windmills dominated when HEA started home renewable programs in 2008, but the consistently declining cost of residential solar has reversed that. Since 2007, the nationwide median price per watt of residential solar has declined by about 44 percent, according to a September 2017 report by the U.S Department of Energy’s Lawrence Berkeley National Laboratory. Residential solar price dropped 5 percent in 2015 alone, the Berkeley Lab found.
Local renewable users seem to have noticed — the number of HEA-connected solar systems passed wind sometime in 2012, and Cheatwood said new solar generation is added at a rate of about four to eight installations a year. Recent years have had about one annual wind installation.
“Typically it’s not even a new installation,” Cheatwood said. “It’s somebody who was living off the grid and then decides to connect up to the HEA grid but bring their renewables with them. So there’s not much new wind on the peninsula.”
Though net metering would also allow hydroelectric, geothermal, tidal, and wood-burning generators, no HEA members have installed them.
Net-metering users are credited in their electric bills for the grid-power they’ve consumed minus what their home generation has produced. If a home generating system produces enough to cancel out the entire electric bill, as well as feed surplus back into the grid, the owner is compensated for the extra at a rate around 6.9 cents per kilowatt. At this rate, generating more power than is consumed at home usually isn’t cost effective, Cheatwood said. Most net-meter users, he said, work with electricians to make generating systems as close as possible to their monthly bill.
The growing efficiency and availability of home renewable power — most especially solar — is threatening to some utilities in the 41 states that allow net metering, provoking conflict between utilities, their users, and state regulators.
One problem is inherent in relying on unpredictable natural phenomena like wind and sunshine for electricity. When wind drops or sunlight is weak, the power entering the grid from these sources also drops, creating unforeseeable shortages. Though Cheatwood said this could be a concern as home solar grows, Alaska’s utility regulators — the Regulatory Commission of Alaska — attempted to prevent the problem by limiting the amount of variable renewable power on the grid to 1.5 percent of a utility’s average annual retail demand. In calendar year 2016, this percentage for HEA equalled 781 kilowatts. The cooperative's 309 kilowatts of net-metered generation are about 40 percent of the limit. HEA also prevents local system imbalances by putting a 25 kilowatt limit on each household’s net metered generation.
Renewable energy enthusiasts have long been a vocal part of HEA’s membership, and net metering is HEA’s second program dealing with home renewables. The first, called Sustainable Natural Alternative Power, or SNAP, began in 2008. SNAP allowed HEA members to donate funding to other members who set up renewable generators — again mostly windmills.
After initial excitement, Cheatwood said SNAP donations declined, and the program ended after two years.
“As the excitement kind of tapered, there were limited donations going toward these people who were making pretty sizable investments in renewable energy,” Cheatwood said.
HEA’s annual compensations to the renewable producers were another problem — they were based on the percentage of HEA’s total renewable energy each member-owned system produced.
“So there was no incentive to put in a small system — if everyone else had larger systems than yours, you were going to get a small return and it wasn’t worth it,” Cheatwood said. “It kind of created a big barrier to entry.”
After two years the SNAP program was reformed into the present net metering, which the Regulatory Commission of Alaska allowed in October 2009. HEA’s became Alaska’s first net metering program in June 2010, carrying over 29 members — mostly wind — from the SNAP program. By November of that year, the number of participants grew to 37, according to previous Clarion coverage.
Overall, Cheatwood said, HEA has more generating capacity than its power demand requires, making net-metering a non-essential element of HEA’s generating mix.
“The motive is the members, and the board of directors,” Cheatwood said. “They want renewables as much as possible, so we have this option available for anyone who wants to contribute. For large-scale production, for HEA to put in something like that would not be cost effective. It would send the rates up. The members don’t want that, but they do want their personal bills to go down. So net metering is a nice balance. Someone who wants to lower their bill and participate in renewable energy can do so at no cost to Homer Electric.”