Solar provider resilient in face of Belco rate change
A solar provider said the industry had taken “inventive” steps in the face of recent electricity rate changes announced by Belco — a move that Wayne Caines, president of the utility, insisted was “not a penalty on solar”.
Greenlight Energy said the company had expected the changes, which Belco said would result in modest bill increases for residential rooftop customers.
Cameron Smith, the managing director, said residents who invested in renewable energy will “feel the real weight” of the rate change.
To mitigate anticipated changes, Greenlight has restructured its operations and cut installation costs.
Mr Smith said: “Belco talks about a modest increase of a few dollars for everyone else.
“The people who invested in renewables carry the real weight, which tells you who this was written for.”
Belco said this week that rates will be “unbundled for greater transparency”, adding that usage and demand charges that were previously bundled to reflect the total cost to generate and deliver electricity to customer homes would now be separated.
The utility said the changes — directed and approved by the Regulatory Authority — were guided by transparency and a fairer sharing of costs.
Impact varies by customer class and usage, which Belco said was “not a single across-the-board increase or decrease”.
For most residential customers who do not have distributed generators — primarily rooftop solar — the change means an increase of between $1.62 and $4.72 per month.
Mr Smith said Greenlight Energy anticipated the rate change and last year it started restructuring its operations.
He said: “We purchased a building in Paget, which will become our showroom, warehouse and staff accommodation in the new year — and, in doing so, take a big chunk out of our overhead.
“Last quarter we also rolled out DC-coupled Tesla Powerwall 3 and solar PV systems, which reduced the installed cost of a solar and battery system from Greenlight Energy by 15 per cent.
“So even with Belco's billing change, those two moves mean a lower installed cost and higher returns for our clients.”
Wayne Caines, president of Belco, explained that the power company’s redrawn new rate structure was “not designed to target solar customers, and the claim that it was written for Belco’s benefit is simply not correct”.
Mr Caines said it had been approved by the Regulatory Authority after a detailed review of service costs by “Belco, the RA, independent expert advice, multiple rounds of technical modelling, a detailed regulatory assessment and public consultation”.
He added: “This change affects each class of customer differently, and our communications reflect that.
“Our website sets out the impact for every customer class, with and without solar, in full, with tables and worked examples. Our advertising shows the increase for the average residential customer, because that is the majority of our customers. The solar figures now being quoted back to us have been public on belco.bm since the announcement; they were taken from our own website.”
Mr Caines said the increased facilities charge for solar customers reflected the cost of the service they relied upon.
“When the sun is shining, they may draw little from the grid, but at night or under cloud they expect full power the instant they need it. Belco must keep generation ready to deliver that at any moment, and that standby capacity costs the same whether it is used every hour or only some of them.
“Recovering that cost through energy charges alone would mean customers without solar increasingly paying to keep the grid ready for everyone.”
He added: “This is not a penalty on solar, which is a positive step for Bermuda. It is about the grid that makes solar viable being paid for fairly by all who depend on it. Belco established Bermuda's original net metering programme more than a decade ago, ahead of full regulation, to support the adoption of rooftop solar.
“We remain committed to a grid that works for everyone — those who generate their own power and those who do not.”
Mr Smith said Greenlight Energy cut the installed cost of a system by more than 15 per cent this quarter with the DC-coupled Tesla Powerwall 3 systems, adding that “solar makes more sense today than it ever has”.
On Tuesday, the RA said it supported the move, adding that the redesigned structure forms part of its statutory responsibility to promote efficiency, ensure fair pricing, safeguard the long-term interests of Bermuda's consumers and support a reliable and financially sustainable electricity system.
Mr Smith said it was “disappointing” that the RA signed off on rate change, but added: “Solar isn't going anywhere. The harder anyone tries to legislate or price around renewables, the more inventive the industry gets. A new bill format won't change that.”
Mr Smith explained that Belco makes the bulk of its money selling kilowatt-hours, but “sells fewer every year because Bermuda loves solar”.
He said: “For the better part of a decade, they've been working on the same problem — how do you stay just as profitable when customers keep buying less of what you sell? This bill redesign is the answer.
“Load more on to fixed charges, so the people generating their own power end up covering the shortfall anyway.”
He said from August 1, the fixed monthly facilities charge for a home as well as a small business, will see a steep fee charged “before a single kilowatt-hour is used”.
However, Mr Smith said the company’s strategy was unchanged.
He said: “The case for solar in Bermuda was never built on the fine print of a Belco bill. It is built on one fact that no rate redesign touches: Bermuda has the most expensive electricity in the world.
“That was true in July, it will be true in August, and every kilowatt-hour a household generates on its own roof is a kilowatt-hour it no longer buys at the world’s highest price.
“When you are a legally protected monopoly, you can make whatever operational decisions you like and send the public the bill, but you cannot change the underlying arithmetic: solar in Bermuda still wins, and by a wide margin.”
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