With today being "Sun Day", a day when many environmental groups are
celebrating the benefits of solar and other renewable power sources, I thought
that it would be a great time to mention "Schedule Z". This is the oddly named
approach that the Mass Department of Public Utilities ("DPU") has had in place
for many years to allow solar array owners to transfer their credits that are
created from any excess solar generation above their own consumption needs.
Having been involved in many of the Lincoln CFREE discussions with solar owners
and other people across the state, I have been surprised to find that there are
many solar array owners who have large credits that have built up over time
where they have not used the Schedule Z process to have those transferred to
friends, families, or others who might want to buy them. In many ways, this
transfer process is similar to "community solar", but done individually, not as
large groups with very large solar arrays.
I have had solar installed on a couple of homes of mine and family members over
the last eight years and am a big believer in the importance of this direction.
I have also seen the importance for customers who produce more solar annually
than they consume to have thoughtful advance planning for how to deal with
those extra credits and not let them grow over time on their account. It is
difficult to monetize them once they build above your annual consumption level.
The two models that are often discussed for solar are:
1.
Your bill is as close to zero at the end of the winter as possible, meaning
your array is sized to build credits over the high sun periods of the summer
and use all of them in the winter, or
2.
You generate a lot of solar above your own needs that helps support more
distributed generation and have "off-takers" for the credits who buy them.
I have lived with both models. There is also an added set of important
benefits when you add battery storage that can support peak demand periods, but
that is another topic.
Recently, I have talked with a number of people in Lincoln and across the state
who have vast amounts of money built up as credits on their electric accounts
and have not used the "Schedule Z" process to have those credits transferred by
way of Schedule Z to friends, family, by donation to non-profits, etc. Having
carefully kept my annual credit balances at or close to zero, I am well aware
that this process takes some effort, and I have wondered whether there would be
an opportunity to arrange an informal "exchange" process where people who have
those credits and people who want to buy credits that are generated from solar,
but cannot have their own solar for a variety of reasons, would be able to find
each other and resolve this issue. In essence, this is very similar to the
idea of community solar, without the overhead and a formal process.
While I am not looking to end up in the role of coordinating a process, it
would be helpful to hear from anyone who has the problem of too much credit on
their Eversource account from solar generation and wants to resolve it, and
anyone who might have an interest in buying some of the credits. From the
numbers that I have heard of people with over $5,000 and over $10,000 in credit
built up, I would imagine that solving this issue would benefit many people. I
have recently heard of several municipalities, each with over several million
in built-up credits. We are fortunate that Lincoln does not have that issue,
with good advance planning! It is also exciting to go to the transfer station
and see the wonderful progress on the new solar array that will cover a large
portion of the old landfill, meeting most of the town's municipal energy needs.
I have included a summary of Schedule Z below, in case anyone is interested in
some very dry reading. Everyone with solar would benefit from understanding at
least the basics of Schedule Z.
Lincoln is very fortunate to have over 300 homes with solar, a net-zero school,
planned solar on the new Community Center that should make it net-zero, and the
new landfill array. That is great progress. Lincoln is also number 4 in the
state in terms of the % of registered vehicles that are EVs or hybrids.
Please let me know if you have credits or want to buy them and we can see if it
makes sense to find a way to create an informal exchange process. If you are
interested in participating in any process that is started, please let me know
that as well.
Best regards,
Scott Rodman
Schedule Z basics
This is the program that is used by the three primary utilities (Eversource,
National Grid, and Unitil) in the state to manage where solar credits are
applied. It was established and is governed by a DPU tariff. While this may
have some applicability to those with leased solar arrays, I am not sure of the
implications. This is written only with the experience of knowing how it works
for arrays that are owned by the homeowner.
Solar array customers of the three large utilities in Massachusetts fill out a
Schedule Z form when they first have their array installed and it becomes
operational. That tells the utility where they want the credits to be applied
for the power that is generated. The initial Schedule Z form applies the
credit directly to the account where the solar array is located, referred to as
the "host account". Subsequent Schedule Z form submissions, or now through
Eversource's online portal, are able to apply any excess credits that result
from more power generation than consumption in any month to accounts of other
Eversource customers. That only used to be able to be applied to customer
accounts within the same "load zone", but that now allows for transfers to
customers across each utility's account base in Massachusetts and will soon
allow transfers to the customers of the other two primary utilities within the
state. It is unclear whether this will include Cape Light Compact at some
point.
The way that the Mass Department of Public Utilities ("DPU") tariff is written
and interpreted by Eversource, you are allowed a "one-time" transfer of any
built-up credit to another account, as well as the ability to transfer that
credit balance to another account when you close your account. They are fairly
strict about those rules. That allows for the ability to move built-up
credits, but you need to find someone who wants them and can use them. Regular
and one-time transfers are done at either par value or at a discount and that
is totally up to the parties involved.
While the process used to only allow 2 changes to the allocation of credits per
year and each one took several months to have applied and changed, their recent
addition of an online portal allows an infinite number of annual changes, and
they go into effect within 24 hours of uploading the changes and must be in 24
hours before the billing cutoff for any cycle. In reality, that infinite
number of changes results in only 12 times per year when they have an effect,
as the billing is monthly.
If anyone has any questions regarding Schedule Z or any specific issues, please
get in touch, and I am happy to help. It is likely that the Lincoln CFREE
group will run a webinar on this topic in the near future. While it all might
sound quite boring, it is a vital part of having solar and a very important
aspect of the economics of that investment in a solar array.
___________________________
Scott L. Rodman
[email protected]
212.665.8500
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