JEA Proposes 5 New Solar Farms, Lowering Reimbursement Rates For Rooftop Solar
On Tuesday, JEA’s governing board will hold a workshop and consider five different proposals relating to solar energy, including rekindling a fractious 2016 debate over how much rooftop solar customers can sell their excess power for and increasing its own solar production by 250 megawatts.
But the battle lines that were drawn last year when JEA proposed dimming its reimbursement rate, known as net-metering, from around 11 cents to seven cents seem to have faded. That’s even though the community-owned utility is now proposing an even steeper cut — 10 cents to three and a quarter cents.
Under the proposal, rooftop solar users who install their panels by January 31, 2018 will lock in their current reimbursement rate for the next two decades. If a previous JEA customer sells their rooftop solar home, that system would still qualify for the grandfathering.
Last year JEA’s reasoning for the proposed rate cut was that solar energy was rapidly becoming cheaper and that the fair market price, which is what JEA pays its own solar contractor, was much lower than what it was shelling out to the 1,100 solar users in its customer base.
This time around, though, there’s a specific reason for the proposed change: The utility is moving to incentivize battery storage instead of solar power generation alone.
JEA is proposing to offer solar customers who install a battery storage system in their homes a 30 percent rebate up to $2,000, which will be on top of the existing 30 percent federal government incentive. The utility based its battery incentive proposal based on the starting price of a Tesla home battery storage system — approximately $6,000 for the battery and related hardware — and $800 for installation.
Tesla’s website has a calculator that estimates the battery storage needed based on square footage and a number of other factors.
JEA Director for Electric Production Resource Planning Steve McInall said between the battery subsidy and power storage capability, customers should see a return on investment similar to the current net metering rate.
“If somebody puts in a battery and stores their excess and then uses it to offset consumption, they essentially get full retail for all of their output from their rooftop solar system,” he said. “Even though we’re not paying them, they’re essentially paying themselves because they’re not using that energy from us.”
Another reason for the net metering change is connected to another solar proposal the board will consider Tuesday. The utility wants to significantly beef up its own solar power generation with five new solar farms producing 50 megawatts slated for completion by 2020.
Of the five, McInall said JEA already owns the land for two, two others are nearing acquisition and the last has been identified but is in the early stages of negotiation. Contractors will supply the actual panels and installation manpower and JEA will purchase the power from them before selling it to its customers.
The creation of those farms should pull the fair market price for solar down further and that was considered in crafting the new rate, McInall said.
“The market for large scale has continued to just dive … offering the fuel rate now is essentially, in some ways, an anticipation of where the average price of solar will soon be,” he said.
Still, although generally supportive of the new JEA proposals, A1A Solar President Pete Wilking— who runs one of Northeast Florida’s most well-known solar installers — said drawing down the net metering rate so suddenly could represent a problem for a strengthening, yet still infant solar market.
“I think it would be a shock to the industry to go from net metering to three and a quarter cents per kilowatt hour and all the for-profit utilities in the state are still practicing net metering,” he said. “I think it’s pretty early to be rolling back net metering this quickly and abruptly.”
Wilking, who was an opponent of last year’s rate reduction proposal, said battery systems can be far pricier than $6,000 and lowering the net metering rate too much could deter prospective solar customers who may not see as much of a return on investment.
McInall admits Wilking’s concerns aren’t unfounded, but argues a battery incentive program could jumpstart a battery storage industry in Northeast Florida, making rooftop solar just as attractive in the future as it is today.
In addition to battery incentives, changes to net metering and the creation of the new solar farms, JEA’s board will also consider adding clean energy sources to a 2010 promise to have 30 percent of its energy generated from nuclear power. Board members will also vote on a program for commercial customers wanting to lease solar equipment.