Solar Virtual Net Metering (and a webinar this Friday)
Editor's note: The following is a guest post contributed by New Ecology (NEI) and Local Initiatives Support Corporation (LISC).
Virtual net metering (VNM) credits are a financial product that enables property owners to reduce the amount they pay for electricity, creating significant operational savings for housing owners.
The Federal Investment Tax Credit is currently set to decline on December 31, 2016. After that date, it is less likely that solar PV developers will be interested in installing new solar PV systems and selling credits. This means that housing developers must act quickly to begin the credit procurement process and take advantage of the VNM credit opportunity.
How it works
Through VNM, the retail value of electricity generated by solar photovoltaic (PV) systems is sold to a property owner at reduced price in the form of credits. The property owner then uses these credits to pay a portion of their electricity costs.
While credits purchased may not cover the entire consumption at a property, they typically offset a large percentage and can be purchased at a price 15-30% below their value. The final value of a credit at a given housing development is determined by the retail cost of electricity purchased from an investor-owned utility (e.g. National Grid, Eversource) at that development. The value will fluctuate over time as retail electricity rates change.
VNM credits are provided either through a fixed-price or a floating-price contract with a solar developer. A fixed-price contract establishes a per-credit price for the duration of the contract term and may include an annual percentage escalator. A floating-price contract establishes a percentage discount on the per-credit value of the VNM credits. Credits must be allocated to meters in the same utility territory and load zone as the solar system.
Role of Affordable Housing Owners
Solar developers receive annual incentives to construct solar arrays. These incentives are highest when VNM credits are sold to affordable housing developments. Therefore, affordable housing owners are the most sought out customers for these credits and receive the best prices.
VNM credits may be purchased even if an owner currently purchases electricity supply through a third-party supplier or if a development already has a solar system installed.
Join NEI and LISC for a webinar:
NEI and LISC are offering a webinar this Friday, November 13th, on the Solar Virtual Net Metering (VNM) credits - to anyone that might benefit. Community Development Corporations (CDCs), in particular, will benefit from the long-term avoided utility expenditures this program can offer, and may be in a position to form partnerships to compound benefits even further.
Now is your best chance to learn how it all works and what you should do next.
The webinar will be held at 2pm ET on Friday, November 13th. NEI and LISC encourage inviting management company and financial staff to join in addition to other interested staff members. To register for this webinar, please RSVP with your name and contact information to Michael Brod at firstname.lastname@example.org.
For further information about this webinar, click here.