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Regulatory response to solar concerns

Dear Sir,

Thank you for the opportunity to respond to the Letter to the Editor, “Solar power should be promoted, not discouraged”, published on September 25, 2018.

We wish to provide some facts from the Regulatory Authority of Bermuda, to encourage a better understanding for the public and the solar industry. The Authority recognises that with the regulation of the electricity sector not everyone will completely support all changes. These changes take time and must be implemented carefully in the interest of long-term success.

Please note the facts of the timelines of regulation. Only since October 2016 has the Authority been tasked with regulation of the electricity structure, including developing and consulting on the licensing structure for the electricity sector. Therefore, it is incorrect to say that the Regulatory Authority issued an order to Belco in August 2016. You will see this on the timeline that follows.

Another correction is that rated solar producers are paid the Feed in Tariff, which is largely composed of the total cost of fuel, inclusive of the fuel adjustment rate. That is, Belco pays a solar energy producer the same rate as it would cost Belco to produce the energy itself, which largely consists of the fuel consumed.

It has been publicised that the Fit rate will be revised in coming months, once the methodology is approved and a Fit review is conducted by the Authority. Fit is proposed to be reassessed every three years.

It is important to note that the Authority works to achieve a fair environment for all to ensure that all distributed generators — renewable energy producers — are treated the same, as required by law. This was recently demonstrated when it issued an order to Belco to pay all solar energy producers.

All contracts are also required to comply with applicable laws and regulations, in this case namely the Electricity Act 2016. Contracts between Belco and renewable energy producers, agreed before that legislation, are now superseded by the Standard Contract.

Finally, while it may be true that the payback period on a residential solar power system may have increased, it is important for the public to be aware that the life of these systems is 25 to 30 years. Therefore, it remains a viable cost saving for households producing solar power.

The Authority continues to work within the existing legislative framework, guided by ministerial policy.

Regulation timeline

August 15, 2010: Belco introduces net metering scheme.

August 15, 2016: Belco implements a change of net metering Programme

Belco announces that it will no longer offer net metering for new residential and commercial (ie non-utility scale) solar PV installations. The only exception will be for customers who were in the process of installing solar PV and can verify that their planning department permit was issued on or before August 15, 2016. Residential and commercial customers already on the net metering programme will continue to receive the net meter rate at the capacity that was approved at the time of installation, on or before August 15, 2016. All new customers interconnecting with Belco will be compensated at avoided cost, which is largely the cost of fuel.

August 26, 2016: The economic development minister (Grant Gibbons) requests Energy Commission to conduct inquiry into net metering

September 15, 2016: Public Consultation on Belco Metering Request

October 11, 2016: Minister receives Energy Commission's Net Metering Inquiry Report

October 26, 2016: Minister endorses recommendations in Energy Commission's Net Metering Inquiry Report

October 28, 2016: Electricity Act 2016 commences/RAB begins regulation of the electricity sector (subject to limited transitional powers)

February 13, 2017: Belco issues letter to solar companies removing support for future net metering programme entrants

March 2, 2017: RAB enacts Emergency General Determination on Net Metering based on recommendations of the Energy Commission's Net Metering Inquiry Report

March 16, 2017-May 12, 2017: EGD on Net Metering first-round consultation period

July 14, 2017: RAB issues Preliminary Report, Preliminary Decision and Order on the renewable energy metering programme

August 2, 2017: Bulk Generation and Transmission, Distribution and Retail Licences are enacted via EGD


Consultant Head of Communication and Stakeholder Engagement

Regulatory Authority of Bermuda

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Published September 29, 2018 at 9:00 am (Updated September 29, 2018 at 10:25 am)

Regulatory response to solar concerns

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