Lincoln Electric System is rolling out a new program on Thursday offering its customers the opportunity to buy virtual solar panels.
For an upfront, one-time payment, customers get to reserve some of the output from LES’s new 5-megawatt solar farm near West Holdrege and Northwest 75th streets.
They essentially buy the rights to electricity produced by solar panels and that electricity is credited toward their monthly bill through 2036 when LES’s contract with facility owner Enerparc ends.
“The output of each virtual panel is essentially equivalent to the output of a physical panel at the site,” said Scott Benson.
“The credit someone receives will depend on how many panels they have enrolled for and the output of the facility in the previous month.”
LES will add up how much electricity the solar farm produced each month and divide that by 15,333, the number of physical panels at the site, to determine the per panel credit.
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The cost now is $685 per panel, but that amount will decrease each year because there will be a year less left in the contract with Enerparc.
LES will only sell as many virtual panels as panels exist in the real world and is limiting the number customers can buy to enough to cover 80 percent of their annual electric use or 100 panels, whichever is lower.
As a thank you to people who contributed to LES’s SunShares program, the utility is allowing them to put the money they have invested in SunShares toward purchasing virtual solar panels, although that offer expires July 1. SunShares is a voluntary program that lets LES customers pay a little more on their bill to support solar investments. Currently, 1,200 customers are giving more than a combined $6,000 a month.
“We think a lot of the people who are going to be excited about virtual net metering are probably the same people who are already signed up for our SunShares program and have been contributing. Now they get to make use of those funds they have been giving,” Benson said.
Benson said virtual net metering gives customers a chance to hedge against higher electric rates in the future.
“You’re banking on maybe that will be a better deal over the next 20 years than where our rates are going to go,” he said.
At this point, Benson said, it's a gamble, not a guarantee because it's impossible to predict where the utility’s rates will be in 20 years.
The electric utility industry in general is shifting toward increasing the fixed portion of residential customer bills and decreasing the rate they pay for use, which makes solar less cost effective.
In its rate proposal for 2017, LES plans to create a three-tier system for the fixed rate portion of residential bills. The utility says this will provide a more equitable distribution of fixed costs between high- and low-use customers.
The Lincoln City Council is expected to vote on LES rates in December.
If a person decides to leave the virtual net metering program -- say because they move to Alaska and will no longer be a customer -- LES will refund them 75 percent of whatever the enrollment cost is in that particular year.
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On Twitter @ljsbergin.