Washington Law: Pay for Energy You Generate?

Residential solar power in Washington State is made possible primarily by a policy known as net metering. Net metering allows an electric utility’s customer to push excess energy into the grid and get credited for it at the same rate that they would pay for power they use from the grid. For example, if one sunny day in April, I produced 80 kWh but only used 60 kWh, then at the end of the day a net credit of 20 kWh would be on my account, which I could use the next day which might be cloudy.

In particular, the key aspect of this that makes solar work well in Washington is that all of the excess energy I generate in late spring, all summer, and early fall, can be used in the winter. That’s when my production is low and I need more energy to heat the house (with a heat pump).

However, net metering can lead to a problematic situation. If a particular household has more solar (or other energy generation) than they need to cover their annual usage, they would end up building a larger and larger credit with the utility. Theoretically, there are at least two options for what can be done with this excess energy: Either the utility can pay the customer for it (perhaps at a wholesale rate), or the utility can throw away the credit from time to time.

Washington State law says that this credit shall be thrown away:

On April 30th of each calendar year, any remaining unused kilowatt-hour credit accumulated during the previous year shall be granted to the electric utility, without any compensation to the customer-generator.” – RCW 80.60.030(5)

In general I am fine with this policy, although it’d be neat if people could be paid some for the power. The problem I have with it is the second and third words: “April 30th”.

When this law was written, not very many people in Washington State had solar panels. It was much more expensive and the panels were not as efficient as today’s. Those families that did have solar were probably not over-producing, so it was unlikely anyone had great data on how solar would work out. They picked April 30th because it was perceived as being about the end of the rainy season, when customers would be finished using their prior accumulated net metering credit and would be just about to start producing large amounts of power for the new year.

Unfortunately, they were wrong.

Solar production in April is relatively high. The sun has moved fairly high in the sky (the equinox is around March 21st, remember) and the dreary clouds of winter have parted. It’s not as good as July, but there are some very nice days in April every year, which add up quickly. This can be seen in my solar production:

Average Solar Production, by Month
Average Solar Production, by Month

My solar array is ideally positioned, facing directly south and titled at 30 degrees, for maximum production in our area. However it is not large enough to meet all of our energy needs. From April through September we generate more than we need, then starting in late October we start using the bank of energy we accumulated. The bank runs out around the end of December or beginning of January.

However, our bank balance is reset to zero on April 30th, because of the law cited above. As a result, on April 30th of every year, our electric utility is getting some free power from us. The actual amount varies from year to year, but has been around 300 kWh, which equates to about $30 worth of power. This isn’t a huge amount of money, but the side effects are not only that am I giving it to the utility for free, but also I then have a lower balance on my power bank, which means the following January I then have to pay for another 300 kWh of energy. It’s pretty sad to have to pay for energy that I produced for myself.

If, instead, the bank reset were to happen instead at the end of March, then the amount of power lost would be small or zero, depending on the year, as we usually haven’t started accumulating a bank by that point.

Actual Energy Bank Comparison with March Reset
Actual Energy Bank Comparison with March Reset

Since the intent of this law is to deal with the situation where a customer produced more energy than they use, it seems unfair that it would affect those of us who under-produce as well and cause us to have to pay for the energy that we produced ourselves.

March 31st also turns out to be the ideal date to reset the energy bank for someone who produces exactly what they use, as well. If my production were slightly higher, the graphs would look like this:

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Energy Bank Comparison w/Ideal Production, March Reset

Here you can see that resetting the energy bank at the end of March is nearly perfect. But resetting at the end of April results in the loss of 500 kWh of energy credit, which then results in the customer having to pay for 500 kWh of energy in February and March, even though they generated enough for themselves the prior April.

What can we do about this?

At least one utility, Puget Sound Energy, has expressed that it would be good to change this date. At the January 2015 meeting of Solar Washington, Jake Wade, PSE’s Net Metering Program Manager, acknowledged that April 30th is probably too late in the year. In 2014, 413 (approx. 20%) of their net metering customers had a balance that was thrown out on April 30th, totaling 202,000 kWh of energy. Mr. Wade suggested moving the date to the end of March should fix this. That’s what prompted me to do my analysis that you see above.

Unfortunately, we can’t just ask our utilities to change the date to March 31st, because the April 30th date is actually in the state law.  As a result, changing these two words from “April 30th” to “March 31st” will require action by the state legislature. If you live in Washington, I encourage you to write to or call your legislators and tell them about this. You can link to this blog post if you want to provide evidence for why the date should be moved.

You can find your legislators and write to them here: Find Your Legislator.

You can also support potential legislation like this by contributing to Solar Installers of Washington, a group of local solar installers who work with the legislature to develop new legislation in support of solar in Washington state.

One thought on “Washington Law: Pay for Energy You Generate?

  1. Excellent analysis and charts! I had thought that Oregon needed to make the same change, but I found that Oregon law specifies the billing cycle in March, so that the reset isn’t on March 31 but on the date of the meter read in March. Perhaps you would find this is even better than “March 31.”

    https://www.oregonlegislature.gov/bills_laws/ors/ors757.html

    (d) For the billing cycle ending in March of each year, or on such other date as agreed to by the electric utility and the customer-generator, any remaining unused kilowatt-hour credit accumulated during the previous year shall be granted to the electric utility for distribution to customers enrolled in the electric utility’s low-income assistance programs, credited to the customer-generator or dedicated for other use as determined by the commission, for a public utility, or the governing body, for a municipal electric utility, electric cooperative or people’s utility district, following notice and opportunity for public comment.

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