Several years ago, Cherryland Electric Cooperative started a net metering program for members who wanted to put wind or solar on individual homes in our service territory.
What is net metering? Net metering is simply a situation where an individual generates electricity with home solar or wind. This individual is also connected to and consuming electricity from the grid. One simply subtracts the energy consumed from the energy generated to get a “net” result.
If the energy generated exceeds the energy consumed, Cherryland currently pays the full cost of retail for the excess kilowatt hours (kWh) that are placed onto the grid. Today, this is almost 11 cents per kWh. It is a much higher price than hourly market prices or our overall wholesale costs but it was done to incentivize the growth of renewable energy. Most home generators put little onto the grid after their in-home usage. So, the subsidy, while growing, is small.
Today, the wind and solar industries are much more mature than when the present net metering program was started so long ago. Prices for wind and solar equipment have dropped. As we watched and weighed trends across the country, it became clear that it was the appropriate time to end the subsidy.
All net metering installations signing up and producing energy on or after November 1, 2016 will receive a market rate for all energy put onto the grid. This rate will change annually as we calculate our average cost of market power. Over the last year or so, the price would have been in the 3-4 cents per kWh range.
Present net metering members will be grandfathered at the full retail price. These members made financial decisions based on the price in place at the time. The Cherryland board doesn’t feel that it would be fair to alter the arrangement made with these members.
Even after November 1st, members will still offset the full price of retail for the energy used inside the home. It is important to remember that this switch to market rates only affects the small amount of energy put out on the grid. Thus, members will need to use 2 different payback rates in any pre-purchase calculations.
Click on the Infographic to see how the new net metering rate works
The board and I also believe this change is about leadership. We were participants in the first commercial wind farm in Michigan and also creators of the first community solar project in the state. Along with other distribution cooperative owners of Wolverine Power Supply Cooperative, Cherryland’s renewable portfolio will exceed 30% of our total wholesale mix of generation in 2017. This will give us yet one more first place position in renewable power.
Thus, it is only natural that we attempt to set an example and lead the way to market based net metering. We took a long look at this issue in an attempt to be proactive while giving our members adequate notice.
Cherryland is committed to renewable energy in a fair and affordable manner. This philosophy has grown our renewable portfolio to a “best in class” position. This small change to a market based net metering rate is consistent with that philosophy. We look forward to using this rate to work with members who have the same philosophy and commitment.
Still want to learn more? We made a quick podcast to help explain the rate. Check it out here.
We will be holding a Net Metering Meeting, open to all Cherryland members, on March 15th to discuss the rate and answer any questions.
Where do customers currently utilizing solar energy get the equipment? We have been interested in moving into renewable energy; does Cherryland have any recommendations for solar panel providers?
Cherryland does not have any recommendations for solar panel providers. I would try the yellow pages and area electricians. There are many good solar installers in our area. There are just too many to list and if I would miss one, it would be worse than this lame answer.
I live in an apartment, but I have a porch. Would it be possible to put a solar panel on my porch which is very close to my heater/air conditioner?
Also, must I be facing the south? I believe I’m somewhere between the SE and the SW. Is this panel something I could take with me.
Yes to the solar panel on the porch. South is best but SE and SW will work. You will just give up some production. Yes, you could take the panel with you. Best to get some pricing and talk to an installer.
As a net metering customer since 2011, I am apalled by the cut back to 3+ cents per Kwh for energy I put back into the grid, ande then being resold it at retail. ALL the energy that I produce on MY panels should be FREE to me. I still pay for the line fee, or what I reason, is a storage fee, monthly. This is how I look at this new net metering, even though I will be grandfathered in, this new by-law (or whatever you call it; did Cherryland members get a vote on this?))makes the buy-back period for a solar system twice as long(Mine presently will be 20+ years before paid for). You will get LESS people installing solar and wind at this new rate. This is not an incentive, but just a sneaky way for electric providers(like Cherryland) to gain more control of electric generation and distribution. Shame on you for calling yourself a cooperative and not benefitting your co op members. You say this cost most members more to pay retail for the power that I and 47 others put on the grid, and then turn around and tell me the Kwh are negligible!
I will continue to stand by our contention that the new rate is fair to all members. Cherryland agreed to pay full retail for net metering several years ago to encourage the adoption of renewable technologies. Since that time, prices have dropped considerably and we felt that 34,000+ electric co-op members no longer needed to subsidize the technology. The 47 members who took advantage of the program over these past several years will not be harmed. Anyone installing a system after November 1, 2016 will simply have a different set of numbers to utilize in their decision. If one is concerned about the environment, we do not believe a payback of 8 years or 18 years will make a difference. If solar panel prices have dropped by 50% over the last decade, I have to question why the return would not be shorter than ever. Every kilowatt hour generated and used in the home will save the net metering member 10.98 cents. That will never change. If any future net metering member wants to save 10.98 cents for every kilowatt hour generated, they only have to store the energy in batteries in the home rather than putting it onto the grid. Yes, this has a cost to the individual but not the entire cooperative membership. The individual has a simple decision to make that is easy to calculate and fair to everyone. At Cherryland, we invest millions in poles and wires each year with no other expectation than a 30 year payback. Utility investments are not investments that achieve a quick return. This was a change in a rate tariff that did not require a vote of the members. I remain proud to call Cherryland a cooperative because this change does benefit more than 34,000 members. We all need to remember that Cherryland sent out 34,000 magazines, 20,000 something emails, held an open meeting to which all members were invited, received coverage in the Leelanau Enterprise and the story was also covered in the TC Ticker. From all of this, Cherryland has received less than 10 complaints. Albeit after the fact, this does tell us something about the decision. Thanks for taking the time to give us your input. – Tony Anderson, General Manager
This does NOT benefit those wishing to install solar or wind. Less incentive, less installations, period. You are making it more difficult for members to install solar or wind AND be part of the grid. The only time new installers will benefit is when the sun is shining AND they are using the power AT THAT TIME. All other times the power goes to the grid (OUR GRID) and they will pay retail while getting paid wholesale for what they put out there. THIS IS POWER PUT ON TO THE GRID AND USED AT A COST TO THE PROVIDER!!! Simple math, and quite the rip-off, Mr. Anderson.
From the April 2016 issue of TC Ticker: “….once cost as much as $7 a watt to install now cost around $2.50 a watt, reducing the investment payoff…” – The solar industry has evolved. It is simply time to drop a subsidy that is no longer necessary. My apologies for repeating myself.
I need to repeat myself also. New solar/wind installations(after Nov. 1, 2016?) will be paid 3 cents a kilowatt hour for what they are not using at the time, but storing on the grid. They already pay $15.00/ month for grid usage. Then, Cherryland resells their kilowatts back to them for 11 cents a kilowatt hour. If this customer ONLY uses what they produce, both before it goes on the grid and after, you are making a profit on their power! As co-op members, shouldn’t they own this power that they produced? Why should they have to pay for power they made(besides the line fee)? I can understand the new subsidy for HUGE producers of alt energy, but for residential customers(per the co-ops policy) who only install enough panels/windmill to provide for themselves, this is really unfair, and even on the larger scale, does not promote green power. Thank you for your time.
Thank you Cherryland. I support your decision as a cooperative member.