Dive Brief:

• Multiple municipal utilities in Washington state are reporting they have or will curtail the state’s Renewable Energy System Cost Recovery Program, an additional benefit beyond net energy metering to owners of distributed generation (DG) that can be worth $5,000 or more.
• Benton and Franklin Public Utility Districts (PUDs), the Richland municipal utility, and the Benton Rural Electric Association have reached the limit on the program — which caps DG at 0.5% of retail power sales — and are no longer approving applications. Washington's retail rate net metering incentive is still available to solar customers in these territories.
• A sharp increase in rooftop solar installations has pushed the utilities’ to their caps, and the issues could signal coming problems for the state's net metering program.

Dive Insight:

Under the Washington incentive program, utilities are remunerated by the state for the incentives they give out above net metering. The cap on the program, which sunsets at the end of 2020, is firm, causing Benton PUD to hold new applications after April 18 to reevaluate.  

Benton added only 50 net metered customers from 2008 to 2015, but has had 80 applications for new net metered systems since then, the Tri-City Herald reports. Franklin PUD will reevaluate in June.

Some Washington utilities are reducing the per-customer credit amount in order to share it among more customers. Others are accepting applications on a first-come, first-served approach, according to the Herald, leading them to hit the cap. A measure in the last state legislative session to raise the cap was defeated.

May 2005’s SB 5101 established the production tax credit (PTC) for DG owners who generate electricity from solar power, wind power or anaerobic digesters. It starts at $0.15/kWh but can range from $0.12 kWh to $0.54/kWh, depending on the multiplier.

The tax credit is multiplied by 2.4 for solar modules manufactured in the state, by 1.2 for inverters manufactured in the state, by 3.6 if both are manufactured in the state, and by 0.8 for other wind generation. Community solar projects of up to 75 kW are also eligible.

The struggles with caps on the cost recovery program today could foreshadow larger issues with Washington's net metering program. Capped at 0.5% of peak load, four utilities are approaching the cap — Seattle City Light, Puget Sound Energy, Jefferson County PUD, and Clallam County PUD — according to the Washington Business Alliance. Seattle City Light says it could hit its cap as early as next month.