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The ruling that will ensure that it is worth switching to solar electricity

An important U.S. court ruling regarding the IEC's payment for solar energy produced by private customers in their homes may speed up the transition to a wider use of renewable energy.

Is such an intervention of the judiciary necessary in Israel as well?

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• electrical power

• solar

Shai Levy, Angle

Friday, 04 June 2021, 00:23 Updated: 00:29

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In the video: Payment for electricity for owners of solar roofs (angle)

The article was prepared by Angle - the Israeli Agency for Ecology and Environmental Science's News Agency

A historic milestone was recently set when a Dutch court ruled that the oil giant's business model "endangers human rights and lives" because it poses a threat to the Paris climate change goals and forced It will reduce carbon emissions by 45 percent by 2030.

An equally important ruling, which has received at least global coverage, deals with the other side of the energy market.

This time not on the side of fossil fuels, but on renewable energy, and it includes a revolutionary and forward-looking decision that recognizes that solar energy owned by an IEC customer is beneficial not only to him and the environment, but also to the IEC, grid and state in general.

While such judgments have only a direct local impact, they may pave the way for similar climate claims around the world that will facilitate the transition to a wider use of renewable energies.

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Who sets the tariff?

The Kentucky Public Service Commission of the United States recently issued a precedent-setting ruling for solar roofers across Kentucky and a victory over Kentucky Power, a subsidiary of the U.S. Electric Company in Ohio, when it rejected an IEC proposal that could have prevented further Net measurement policy (using power meter). Under this policy, the billing mechanism entitles solar roof owners to the electricity they add to the grid.

Kentucky IEC customers who installed solar power generation systems in their homes used to receive a credit at the full retail rate for excess electricity, in case they generated more electricity than they consumed. A controversial law from 2019, signed by then-Republican Gov. Matt Bowen, stipulated that new solar customers would no longer receive the full retail price for excess electricity and that the local power company would have to submit proposals for new rates to the commission.

Following this law, the IEC submitted a proposal that reduced the value of solar energy flowing back into the grid to about 3.5 cents per kilowatt-hour (kWh) for private net metering customers and about 3.7 cents per kWh for commercial net metering customers.

The commission, an administrative body with quasi-legislative and judicial powers that is responsible for regulating more than 1,100 public services in Kentucky, has set the new tariff at about 9.7 cents per kWh - about 12 percent below the retail rate of 11 cents per kWh.

This means that solar systems and other means of generating other renewable energy installed by Kentucky IEC customers will still be economically viable for many homeowners, businesses, local authorities and associations who want to install such systems.

Should be profitable for everyone.

Solar panel (Photo: ShutterStock)

The solar roof market continues to grow

The International Energy Agency (IEA) recently released an update for 2021 on the renewable energy market, which states that solar energy development will continue to break records, with annual additions reaching 162 gigawatts by 2022 - almost 50 percent more than In 2019, before the global corona crisis.

The global solar rooftop market, valued at $ 66.84 billion in 2019, is expected to advance at an average annual growth rate (CAGR) of 6.1 percent between 2020 and 2027, according to a report by research firm Grand View.

The report notes that "expanding the deployment of renewable energy for electricity generation along with high availability of solar energy during the day are expected to drive market growth. Investing in solar panels on the roof is a safe investment for end-user consumers against fluctuations in electricity prices."

On the other hand, the report noted that "the global corona epidemic is expected to severely damage the solar roof supply chain. Rising solar panel prices, stuck international trade, shortages of raw material supply and workers facing shortages are among the prominent factors adversely affecting market growth."

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The benefits of distributed solar production

Prior to the order issued by the Kentucky Commission, customers who installed solar roofs were credited for every kWh of solar electricity they did not use and sent back to the grid. When the IEC recently raised electricity tariffs, it tried to lower the credit tariff by almost two-thirds, as well as add a number of other limitations and complications that would make installing solar panels on the roof unprofitable - which could lead to damage to the country's small but rapidly growing solar energy market.

The order issued by the commission is a promising sign of expanding Kentucky’s distributed energy resources.

The Commission has recognized the multiple benefits of distributed solar production, and has adopted principles and best practices for determining the value of distributed energy resources such as solar roofs.

The inclusion of the cost of carbon, production capacity, transmission capacity, distribution capacity and impact on employment opportunities, are among the benefits to be considered.

"The Commission recognizes that solar roofs and other manufacturing facilities may, at some point in the future, create challenges for the system, but for now the Commission sees an opportunity to embark on processes that will comprehensively integrate solar and other resources into the electricity system and provide significant benefits to customers."

48 cents per kWh is enough?

"In Israel today, 48 pennies are received for every kWh that goes back to the grid in a home system, which is slightly above the retail rate charged by the electricity company from consumers, but it is not enough to encourage solar power generation."

"The order given in Kentucky is important and is another step in the global trend toward greener electricity generation," said Lior Ben-Ari Pinchevsky, CEO and founder of Prinergy, a company that specializes in building solar power generation systems. Each kWh of solar electricity returned to the grid has significant benefits to consider - saving environmental damage and spending on health systems following air pollution damage treatment - if these benefits are weighed in the pricing of each kWh returned to the grid, then it should clearly be higher than the retail rate To the consumer. "

"In Israel today, 48 pennies are received for every kWh that goes back to the grid in a home system, which is slightly above the retail rate charged by the electricity company from consumers, but it is not enough to encourage solar power generation," Pinchevsky claims. three times the retail price index for each solar kWh returned to the network - in order to encourage the production of solar electricity. the situation was similar in Israel when starting out rate was about two shekels per kilowatt-hour. "

while the ruling in Kentucky is talking about net metering, it should be noted The registration for the regulation of a net meter in Israel has ended, but there are now alternatives, such as a tariff series, proposed by the Electricity Authority. Finchevsky explains that "the common mechanism today of a tariff series is actually better than that of net measurement, which was discontinued in August 2018. In the sense that the consideration for solar electricity that is fed to the grid is received directly into the bank account of the owner of the solar roof and not by way of credit. "

Israel did not meet the intermediate target it set itself to reach 10 percent of electricity generation through renewable energy by 2020. "The average average production of electricity using solar and wind energy was only about 6 percent in 2020," says Pinchevsky. The next target set by the government is 30 percent clean electricity by 2030. "At the current rate it does not appear that the Ministry of Energy will meet this target, although there has been an improvement trend in raising awareness of clean electricity through IEC campaigns, such as the latter with Jane Bordeaux ".

"On the one hand, attempts are being made to increase awareness of green energy and encourage the production of solar energy. On the other hand, the electricity company that runs the network has not been prepared for this in terms of infrastructure," says Pinchevsky. "The situation in the periphery is more challenging than the center - where there are more areas, but less industry and fewer consumers - so electricity has to be transported and it has costs.This creates bureaucratic blows in obtaining the IEC's approval to connect the solar system to the grid. "

The Electricity Authority undertakes to pay for the electricity produced for 25 years from the date of installation.

Pinchevsky explains that "an investment in a solar system pays for itself on average within 7 years, leaving another 18 years with a nominal annual return that can reach 20 percent, with low risk and the possibility of full financing by banks. This is a high return compared to a standard investment with risk Similar".

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