Solar Tariffs

Let’s look at a 5.5kw solar array producing 7290 kWh per year for a family that also uses a total of 7290 kWh per year.  These are similar assumptions that the Municipal Light Advisory Board used when generating its estimates.   Let’s assume that 42% of the energy (3077 kWh) the array produces is used on premises for a total of 3077 kWh and that 58% of the energy (4213 kWh) is sold to Belmont Light.  Since we are also assuming the array produces the same amount of energy that the household uses the household also buys 58% of its energy or 4213 kWh from Belmont Light.  Finally we will assume a customer charge of $10/month to cover administrative costs of the utility.  That means in the diagram below:

A = 3077 kWh

B = 4213 kWh

C = 4213 kWh

A + B = A + C = 7290 kWh

Retail rate for electricity = $0.19

Wholesale rate for electricity  = $0.07 (average monthly RTLMP)

SolarTariffEnergyFlowsJPG2

Let’s now calculate a yearly electricity bill using different solar tariffs.

Yearly bill = Customer Charge/month x 12 months + Energy Bought – Energy sold.

1. Household without panels: Yearly bill =  $10 (monthly customer charge) x 12 months/year  + 7290 kWh x $0.19/kWh (retail rate of electricity) = $120 + $1385 = $1505

2. Netmetering:  Energy bought = C X $0.19.  Energy sold = B x $0.19. Since we assume B = C, the yearly  bill will simply be the montlhy customer charge of $10 x 12 or $120.

3. Net purchase and sale (Belmont Light Phase 2): Energy bought = 4213 kWh x $0.19/kWh = $800.  Energy sold 4213kWh X $0.07 = $295.  Yearly bill is customer charge + energy bought – energy sold or $120 + 800 – $295 = $625

4. Wholesale net metering (Belmont Light Phase 3)  Energy bought = 7290 KWh x $0.19/kWh = $1385.  Energy sold 7290 kWh x $0.07 = $510.  Yearly bill = $120 (customer charge) + $1385 – $510 = $995.

5.  Belmont Light Tariff that was passed:  Net purchase and sale + fee based on size of solar array.  This montlhy fee is $2.57 x 5.5 kw = $14.13.  The yearly cost is $170.  Then the total yearly bill will be $625 + $170 =  $795.

Summarizing, the yearly electricity bill in these different scenarios is as follows.

1. No solar array = $1505

2. Net metering = $120 (the norm throughout Massachusetts)

3. Belmont Light Tariff = $795

 

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