LIP-81: If the applicable Net Metering Rate for a customer is $.0600 per kWh, are we required to sell to the customer at 50% of this value, or $.0300 per kWh? Where can I find more information?

Please see Section 5 Participant Savings Requirements in the Illinois Solar for All Program Vendor Manual. Sellers under the REC Contract must demonstrate that any ongoing costs and fees paid by the participant will not exceed 50% of the value of energy generated by the participant’s share of the PV system. The method for calculating savings will vary depending on several factors, including the contract terms, system design, customer rates, the applicable net metering tariff, as well as whether customers receive benefits through net metering or indirectly through other means.

The formula for calculating savings in dollars is based on subtracting the total costs and fees from the total energy value received by the customer.

Total Energy Value – Total Costs and Fees = Savings Dollars

The Savings is then calculated as a percentage of the Total Energy Value to establish a Percentage Savings, which must be at least 50% of the Total Energy Value.

Savings Dollars / Total Energy Value = Savings %

Section 5.4 Savings Calculations provides an example that has been adapted here to respond to the question by replacing the $.1248 per kWh, which is applicable to residential, Low-Income Distributed Generation customers only, with $.06 per kWh. Assume the project would produce 3,000 kWh in the first year and the applicable net metering rate is $0.06 per kilowatt-hour. The Total Energy Value is 3,000 kWh x $0.06/kWh = $180. In order for the year one Savings % to be greater than or equal to 50%, the Total Costs must less than or equal to $90 and the subscriber payment on a per kWh basis must be no greater than $0.03. If the subscriber payment on a per kWh basis is $0.03, the Total Costs is 3,000 kWh x $0.03/kWh = $90, the Total Savings Dollars is $180 – $90 = $90, and the Total Savings % is $90 / $180 = 50%.

In regards to ongoing subscriber payments, examples are provided in the Illinois Solar for All Program Vendor Manual.

In order to determine the applicable customer rate, please see Section 5.5 Determining the Energy Rate in the Illinois Solar for All Program Vendor Manual. For residential, Low-Income Community Solar customers, that do not use an Alternative Retail Electric Supplier (ARES) and are not enrolled in an hourly pricing program, a statewide, average rate of $.0600 (6 cents) per kWh is used. For customers using an ARES or enrolled in an hourly pricing program, and for Non-Profit/Public Facilities customers, an average rate based on 12 months of customer bills must be used. This method may also be used for any customer to provide a more accurate projection of cost and savings.

When establishing the Net Metering Rate using customer bills, the most recent 12 months of bills should be used. For Low-Income Community Solar residential customers, only the Supply rate is averaged over 12 months.

In general, the intent is that an accurate projection of the customer’s Net Metering Rate should be used in calculating bill credits and savings.  If the net metering rate determined using the most recent 12 months of bills is more accurate than using the statewide, average rate of $.0600 then that value should be used whether or not it is higher.

If the subscriber is served by an ARES the bidder may want to confirm with the ARES the rate at which community solar net metering credits are provided. It may not be the same as their Supply rate.