Solar creates savings amid heat wave, but industry growth cools
As Vermonters cranked air conditioners during July, one of the hottest months on record, solar power in the state was responsible for $1.3 million in energy savings, according to one of the state’s largest renewable energy companies.
Across New England, solar led to almost $20 million in energy savings during the last heat wave, SunCommon said in a report released on Monday. Vermont accounts for about 17 percent of the region’s solar capacity.
SunCommon Co-President James Moore said the report, commissioned by SunCommon and prepared by Boston-based Synapse Energy Economics, confirmed their suspicion that solar helps lower peak demand during heat waves.
“And that’s where I was really surprised, during that heat wave that we looked at, solar reduced those wholesale electric prices by 14 percent” across New England, said Moore. Heat waves lead to surges in electricity demand, mostly from people blasting air conditioner units.
The report calculates savings from “behind the meter” solar, mostly net-metering on households, building roofs or other small projects.
By reducing the amount of electricity utilities have to purchase off the grid during peak energy periods, solar lowers the overall cost of wholesale electricity. Even states that do not have much solar installed, like Maine, still benefit from that decline, said Moore.
“The relatively few customers who have solar on their roof or business have an out-sized benefit…because they’re pulling the price down that everybody else has to pay,” said Moore.
Ed McNamara, regional policy director for Vermont’s Department of Public Service, said that “behind the meter solar has a similar effect as energy efficiency in terms of reducing the amount of energy that has to be produced and paid for through the wholesale market.”
Policies in Vermont require utilities to establish long-term contracts with energy generators, like the Sheffield Wind Farm, that “hedge against wholesale market volatility,” said McNamara. However, the peak caused by extreme heat can mean utilities have to purchase more energy from the region’s grid operator, ISO NE.