Most of us, I reckon, don’t give much thought to electricity bills. We don’t lie awake in bed dissecting our monthly energy use down to the watt-hour. Nor do we chat with co-workers about the wondrous world of weatherstripping (it saves so many kWhs in winter!). We certainly don’t subscribe to Electric Light & Power magazine, be it, as it may, a critical resource for understanding the vagaries of utility pricing schedules and state-by-state regulations. No, most of us are aware of electricity’s presence only in those rare moments when it’s not there. Example: when a late-July thunderstorm brought a tree branch down on a powerline near my house, it took only about 15 minutes before I started griping about not being able to charge my iPod. Alas, this is the nature of the human mind: it’s not until we feel a thing’s absence that we truly appreciate its full worth.
This habitual unawareness, I think, provides little motivation to improve energy efficiency or reduce one’s reliance on the grid. It’s why most of us continue to cut a check to the utility company, month after month, only vaguely aware of other options. Breaking this monthly cycle — rather, modifying this cycle — first requires a recognition that workable alternatives do exist. From compact fluorescent light bulbs (and weatherstripping!) to full-blown solar PV arrays, energy-saving and -producing technologies are available to fit almost every budget. Second, modifying the business-as-usual cycle requires a general understanding of how, and why, these alternatives make sense. They save power. They produce power. They seal up all the gaps and cracks in your house, making it less expensive to heat or cool your home. You get the idea. Third, modifying the cycle requires action (which usually involves spending some cash).
Today, my interest lies with the first observation: that workable alternatives exist. I won’t discuss the alternatives in detail, directly. Rather, I’ll do so by briefly reviewing two important — some, would argue, potentially revolutionary — items: the bi-directional meter and the renewable energy credit.
(1) The bi-directional meter. Chances are, the electricity meter on the side of your house is uni-directional. That is, it keeps track of all the power that you use to run your refrigerator, oven, TV, computer, lights, etc. At the end of the month, you pay your utility for each kilowatt-hour (kWh) consumed. Now imagine that you’ve just installed a 3.5-kW solar PV system on your roof. At certain times of the day, your new system will produce enough juice to meet all your electricity needs — and then some. At other times, say when it’s cloudy, you’ll fall short and need to draw power from the grid. Only a bi-directional meter is able to track this ebb and flow. Armed with a net-metering agreement, you can essentially run your meter backwards: any electricity that your system produces in excess of your needs — sometimes called net excess generation (NEG) — is typically credited to your utility account on the following billing cycle. Bi-directional metering is critical to the future of solar, and other forms of renewable power: it not only enables system owners to derive a better return on their investment, it also plays a central role shaping the way we think about power generation and distribution. It seems fair that electricity should have value regardless of where, or by whom, it’s generated.
(2) The Renewable Energy Credit. From the overview above, it’s clear that many residents and businesses would jump at the chance to install bi-directional meters and sign net-metering agreements, then start “selling” any excess power to the utility. The natural question is, of course, Why would a profit-seeking utility company agree to such a deal? The short answer is government regulation — in this instance, by individual states. Most U.S. states have adopted mandatory renewable portfolio standards requiring that a certain percentage of statewide electricity demand is met through the use or renewable sources, like wind and solar. Connecticut, for instance, has mandated that, by 2020, 27 percent of all power purchased must come from several classes of alternative sources. (For more information on other states’ standards, see the Pew Center on Global Climate Change.) Depending on the state, a utility can meet these standards in a number of different ways. Among them, renewable energy credits, or RECs, are playing an increasingly prominent role.
Wikipedia briefly explains that RECs
are tradable environmental commodities [certificates] in the United States which represent proof that 1 megawatt-hour (mWh) of electricity was generated from an eligible renewable energy resource. These certificates can be sold and traded and the owner of the REC can claim to have purchased renewable energy.
What this means is that residents (and businesses) can install an on-site energy generation system, like a solar PV array, and then sell all the electricity generated by the system. Whoever buys it (presumably the utility) may then claim ownership of a proportional amount of renewable energy credits. The utility will amass their renewable power purchases into 1-megawatt bundles and, presto, they just came that much closer to meeting their RPS obligations. The nice thing about this approach is that, in theory, it reduces the role of direct government action. In some states, for example, you can enter into an agreement with your utility whereby they’ll purchse your system’s power over the course of 20 years. Or, you can instead opt for a one-time buyout up front: the utility will buy the expected output of your PV system. It bears noting that the REC approach is still being developed. Notably, New Jersey is in the midst of transitioning to an all-REC approach, one where it’s hoped a full-fledged REC market will provide enough incentive to PV buyers so that the state can begin to phase out its own rebate program.
RECs and bi-directional metering are simple concepts that challenge conventional way of doing things. In introducing these concepts, my hope is to drive home a single point: that workable alternatives to a purely grid-tied existence exist. And that through continued efforts, we can advance the way we collectively and individually produce electricity. I like to think it’s not a question of whether the electricity profile of our country will change, but rather how fast those changes will progress. In the end, it’ll come down to how many of us engage that third item — action — before we have any idea as to what the future holds.
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