Net metering boosts economy

Rutland Herald, March 2, 2011

Article published Mar 2, 2011

The two hot words in the energy world these days are “net” and “metering.” A growing number of homeowners, farmers, and small businesses are using net metering as a way to trim their electric bills and help the environment. Few know that the benefits of net metering reach far beyond their rooftops and that it’s one of the best economic development programs in the state.

What exactly is net metering and why is it so good for Vermont?

It started in 1998, when we passed the first metering law. It quickly became clear that this was a trifecta — a triple win. Net metering allows utility customers to save money on their electric bills when they install small renewable energy systems, such as solar panels, at their home, farm, or business and receive credit from their utility for the power they produce. This new power, locally distributed, helps reduce demand on the grid — which in turn helps electric utilities defer costly investments in transmission upgrades, new power plants, and high-priced market purchases. And net metering puts Vermont businesses to work manufacturing, selling, and installing the systems.

About three years ago, Green Mountain Power came up with the idea of offering a “solar customer benefit.” The utility pays customers who install solar net-metered systems 6 cents for every kilowatt-hour they produce, credited toward their bills. While the offer is helpful to its net-metering customers, GMP did this for a sound business reason: The extra cents could help the utility avoid greater costs in the long run. Net metering is part of its larger strategy for creating more distributed generation, which reduces the long-term need for transmission upgrades. That’s why GMP told the Public Service Board that providing this extra incentive would be “economical for its customers.” By encouraging local solar power, GMP could also minimize the need to buy spot power during peak demand times from the New England market, where prices have been at or above what GMP would pay its net-metering customers. Not surprisingly, these customers’ solar panels churn out the most power on hot summer days, when electric demand can surge.

GMP’s small incentive has driven the installation of more than 2.5 megawatts of solar power in its territory, with two-plus megawatts more being built — and with no capital investment by the utility because customers install such systems at their own expense.

Beyond the electrical system benefits, net metering spells jobs. One example is AllEarth Renewables, the state’s fastest-growing company over the last five years, which manufactures GPS-oriented solar trackers that follow the sun throughout the day. The company contracts with other Vermont companies like NSA Industries in St. Johnsbury for its steel components, with Engineers Construction in South Burlington for site work, and with J.A. Morrissey for installation. In five years, AllEarth has added 25 permanent jobs of its own and more than 125 indirect jobs for general contractors, installers, electricians, suppliers, and vendors. Other Vermont companies acting as similar stimulants to our economy include the solar energy firms Alteris and ReKnew Systems. As Vermont was weathering the recession, these companies were growing and hiring.

A priority in the Vermont Legislature is to encourage job creation. One way is to move aggressively to tap the job-creating potential of renewable energy, which has the added benefit of growing a clean, diverse, and in-state electric portfolio. That’s why, since 1998, we have expanded net metering to groups and helped streamline its permitting.

That’s why we need to expand the program further this year, addressing some of the barriers in the way of creating even more jobs and more local energy. Net metering is a perfect fit for a state with a proud tradition of self-reliance, frugality, and producing what we can to meet our needs.


Rep. Margaret Cheney is a Democratic House member from Norwich and vice chairwoman of the House Natural Resources and Energy Committee.