Solar & Battery Regulation & Incentive Programs
Note: In August 2014, the City Council of Austin, Texas, enacted Resolution No. 20140828, which directed program changes to the Value of Solar Tariff as follows:
Origin
In October 2012 Austin Energy, the municipal utility of Austin Texas, became the first utility in the U.S. to offer a Value of Solar Tariff (VOST) for residential customers with solar photovoltaic (PV) systems. The VOST is available for all past, present and future residential solar customers. The VOST replaces net metering for residential solar PV systems that are sized no larger than 20 kilowatts (kW).
As of January 2018, the VOST is applicable to all customers with solar installations, both residential and commercial. The size limit is 10 MW, although different credit rates apply for customers with more than 1 MW of solar capacity.
Calculating VOST
Under the VOST, a residential customer with an installed PV system is billed for all the electricity consumed in a billing period but is given a credit on the bill for each kilowatt-hour (kWh) of electricity the customer generates with the PV system. The amount of the credit assigned for each kWh of solar energy generated is calculated by using algorithms and web-based calculations developed Austin Energy and Clean Power Research. The VOST is administratively adjusted annually, beginning with each year's January billing month. The original VOST was $0.128 per kWh, but it was reduced for the 2014 calendar year to $0.107 per kWh and increased in 2015 to $0.113/kWh. As of August 2020 the rate for all non-demand customers is $0.097 per kWh; for customers on demand-based rates, the VOS compensation rate is $0.067 per kWh for customers with solar capacity less than 1 MW and $0.047 per kWh for customers with solar capacity of 1 MW or greater.
The VOST calculation is based upon several factors* including: line loss savings, avoided fuel costs, avoided costs of installing new generation capacity, fuel price hedge value, avoided transmission and distribution expenses, and environmental benefits. Taken together, these savings are intended to reflect the value of distributed solar energy to the utility—a “break-even” value for a specific kind of distributed generation resource, and a value at which the utility is economically neutral to whether it supplies such a unit of energy or obtains it from the customer.
Eligibility
All systems must meet the requirements of Austin Energy's interconnection guidelines and the customer is responsible for all interconnection costs. Interconnection agreements have a minimum term of 1 year unless the customer is a participant in the Austin Energy Solar PV Rebate Program, in which case the minimum term is 5 years. Agreements will be renewed automatically each year unless terminated by either party (requires 60-day written notice).
*Tariff calculations assume south-facing PV systems with 30-degree tilts.
Name | Enacted Date | Effective Date | Expired Date |
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Designing Austin Energy's Solar Tariff Using a Distributed PV Value Calculator |