Tuesday, April 08, 2008

Net Metering Can Finance Solar Power & Green Jobs

Solar power installations and green jobs can be increased by promoting and leveraging Net Metering. According to the Energy Policy Act of 2005 (H.R.6), Net Metering means "service to an electric consumer under which electric energy generated by that electric consumer from an eligible on-site generating facility and delivered to the local distribution facilities may be used to offset electric energy provided by the electric utility to the electric consumer during the applicable billing period." Section 1251 the Energy Policy Act of 2005, which AAEA supported, requires utilties to provide Net Metering:

"Each electric utility shall make available upon request net metering service to any electric consumer that the electric utility serves."

Walker Architects got it right when they wrote on DesignCommunity.com that:

"Net Metering will help take the edge off the installation cost of Photovoltaic systems. Silicon-based photovoltaic cells (PVs), transform radiation from the sun directly into electricity. Surplus electricity production is reverse metered to the power grid and results in significant reductions in the consumption of traditional fuels. (When and if the rooftop cannot collect enough power for daily use, the rest of the household's power comes from the utility company.) The problem that must be overcome is the two fold cost; first, we need to efficiently fund the solar rooftop power plant and home improvement loans by homeowners are simply too expensive, second we have to reduce the installation cost. We simply cannot succeed one home owner at a time paying retail prices for the material & labor with taxes and compound interest on top of that. We advocate the construction of the rooftop power plant on top of the roofs of our residential infrastructure by big business taking advantage of net metering law in every state. The cost to install one home owner at a time, for the current typical PV installation, is in the range of 18 to 21 cents per kilowatt hour, about twice as much as conventional energy rates. Tax incentives are essential to cutting the initial cost of installation and net metering, which requires electric companies to buy excess power from the solar rooftop, currently offsets installation costs and reduces the pay back time required. When the system produces more energy than the house requires, the meter literally will spin backwards."

Walker Architects continue:

The problem that must be overcome is the two fold cost; first, we need to efficiently fund the solar rooftop power plant and home improvement loans by homeowners are simply too expensive, second we have to reduce the installation cost. We simply can not succeed one home owner at a time paying retail prices for the material & labor with taxes and compound interest on top of that. We advocate the construction of the rooftop power plant on top of the roofs of our residential infrastructure by big business taking advantage of net metering law in every state. The cost to install one home owner at a time, for the current typical PV installation, is in the range of 18 to 21 cents per kilowatt hour, about twice as much as conventional energy rates. Tax incentives are essential to cutting the initial cost of installation and net metering, which requires electric companies to buy excess power from the solar rooftop, currently offsets installation costs and reduces the pay back time required. When the system produces more energy than the house requires, "The meter literally will spin backwards." So far, 26 states have net metering laws. These laws express the direct will of the body politic.

Walker Architects goes on to describe pricing and installation contraints to installing solar panels but concludes that the cost cheaper up front and the price of sunlight will not fluctuate. What we now need is a convenient and effective source of financing to address the highlighted problems cited in the Walker Architects quote. AAEA has developed and is developing mechanisms to help solve these problems. One is Net Metering Backed Securities (NMBS) and another is our Carbon Mercantile Exchange (CMX). Our Carbon Dioxide Reduction (CDR) Program is transportation-based and complements the NMBS concept and the CMX.

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