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GMP-installed Tesla Batteries and Home Solar Arrays Save Money for Everyone

George Harvey

Green Mountain Power (GMP), which provides electric utility services for roughly three-quarters of the people of Vermont, has reported significant savings from the growth of net-metered solar power and installations of Tesla Powerwall batteries, which it subsidized. In fact, during a heatwave in August it saved $600,000 because of the combination net-metered solar photovoltaic (PV) systems and batteries.

For many people, this did not come as a surprise. GMP has been a pioneer among utilities for the use of both technologies. Over the years, it has developed a thorough understanding of the values of both the sun and storage, so it is not surprising that they should pay off.

GMP introduced net-metering in Vermont as a way to save money for all customers. Counterintuitively, even though GMP paid more for net-metered electricity than it charged retail customers, net-metering saved money for everyone. There are a number of factors behind this, but one easily understood key is a simple matter of supply and demand.

As a regulated utility, GMP is required to supply power to many customers at a fixed retail price, regardless of when they buy it. But GMP buys power at the going rate, which is high during peak demand times and can sell at figures much above the fixed retail price. Solar PVs produce power when the sun shines, and since most people are active during those times, demand for electricity is often high at just the time the PVs are making electricity. As a result, net-metered electricity, which is at above-retail price, can replace peak-demand electricity, which has even higher prices.

The one problem with this is that the sun sets a couple of hours before demand drops. That makes electric-power storage important.

GMP has consistently looked to the most advanced technologies to improve service and reduce costs. When Elon Musk announced the Tesla Powerwall battery, he mentioned that one electric utility had already expressed interest. That utility was GMP.

Last year, GMP announced that it would provide Tesla batteries at reduced prices to its customers in Vermont. Normally, the battery cost over $5,000, and the installation might cost another $1,500. GMP would provide batteries to the first 2,000 customers who signed up at the amazingly low price of $1,500, or it would lease the battery for a no-money-down price of $15 per month on a ten-year lease. The one noteworthy catch was that GMP would have to be able to draw power from the battery when it needed to do so. And, that power was to be replaced at no cost to the customer.

It is important to understand batteries and transmission costs. The charge GMP pays for transmission is calculated based on the heaviest load of the year. The transmission costs are spread across the customers as a part of their bills. The lower the heaviest load of the year is the less everyone pays for electricity, all the time.

The 2000 Tesla batteries that GMP installed at customer homes have a combined capacity of 27 megawatts. This is an important resource during hours of peak demand. It reduces both the amount GMP pays for power and the transmission costs. The net-metered solar installations have the same effect, though at slightly different times of day.

People who have net-metered solar systems are paid for the electricity they put onto the power grid. People who have batteries that are available to the utility to draw from get security from power outages at a low cost. But the benefits these people get in GMP territory reduce the costs for all GMP customers.

In August, GMP announced that they had seen a rapid rise of solar energy capacity in Vermont from less than 10,000 kilowatts (kW) installed in 2010 to more than 150,000 kW installed through July 2018, enough to power about 30,000 homes. The amount of growth in 2018 has far exceeded expectations for solar development. The numbers reflect active net-metering projects in GMP territory and represent about 65% of all the solar development in GMP’s coverage area.

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