You may have heard the phrase “You can get paid to go solar” in Rhode Island. When sales reps refer to getting paid to go solar they are referencing one of National Grid’s incentives called the “Renewable Energy Growth” program where National Grid will pay you for either 15 or 20 years at a fixed rate for energy you generate with solar panels that you own. When explained properly the program is quite simple and has a very straightforward financial outcome but is not as rewarding as the more traditional net metering program, here’s why..
Net Metering is where you get $1 of credit against your electric bill for every $1 of electricity that you generate with your solar panels. The reason this is powerful is that the cost of energy goes up on average 4% per year, which means that the value of your solar energy goes up 4% per year. Net Metering also has a 25-year minimum grandfathering clause so you know that this value is established for a full 25-years (the warrantied period of your solar system).
The Renewable Energy Growth program is only guaranteed for the 15 to 20 year period that you choose and the value is fixed for the term. This has a few major pitfalls: 1) You can’t apply for both net metering AND the renewable energy growth program so when your 15 to 20 year term ends you could likely be stuck with a solar system on your roof that gives you NO credit for the energy you export to the grid. So if you chose a long-term financing option (25-years is the most common loan term in solar today), then you’d have 10 years of loan payments left, plus you’d have a big electricity bill and you’d no longer receive any credit.
Contrast that with the net metering program. You are guaranteed to get 100% full retail value for all energy generated by your solar system for the full 25-years, even if the cost of electricity were to triple or quadruple (which we have seen in some utilities over the past 25-years).
To give an example, a customer with a $200 electric bill is expected to spend approximately $100k on electricity over 25-years based on the 4% average annual utility increase. Under net metering the solar system would therefore provide $100k in value to the homeowner.
In contrast, under the current buyback rate under the Renewable Energy Growth program the value to the homeowner for their solar energy would only be $46k.
In summary, there are a lot of unknown variables that make the renewable energy growth program difficult to predict beyond the incentive term. Net Metering is a tried and true program that guarantees long-term value to the homeowner and protects them from the volatility of fluctuating electricity prices.
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