The power grid in New England, and other parts of the country, has something called the “forward capacity auction.” Power plants are paid in advance to guarantee production three years down the road and get the money no matter how much electricity they end up actually making. It’s a way to guarantee that the six states will have enough production to meet peak demand, ensuring that profit-oriented power operators don’t shut down too much production after doing their bean-counting.

All of us pay the resulting charge through our electricity rates.

Payments from the auction are one of the reasons that New Hampshire still has a coal-fired power plant even though it’s expensive to operate; the money has kept it going. (The payments will end in 2026 because Merrimack Station didn’t win any bids in the last auction.)

Well, deep in the latest state-by-state energy profile report from ISO-New England, which operates the power grid, is this statement: “ISO-NE reduces the level of capacity to be procured in the Forward Capacity Auction to account for state policies promoting behind-the-meter solar PV.”

In other words, rooftop solar reduces the amount of electricity that big power plants need to produce, so it reduces the amount of money – our money, ratepayer money – that has to be handed over to the plants to ensure they don’t shut down in three years. In other words, it saves everybody money, not just the folks with the panels.

(Hat tip to Boston energy guru Joe LaRusso for bringing this to my attention.)

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