Green Mountain Power, the Vermont utility that’s already helping grid-connected customers install solar panels and backup batteries, now wants to extend its reach to homes that are completely off the grid — a first-of-a-kind move that could end up being a utility antidote to grid defection.
It’s starting small — only six customers are being sought for the first phase of the pilot project. Still, Tuesday’s launch of the “Off-Grid Package” marks the first time that a U.S. utility has offered customers the option of getting utility financing and technical assistance to generate their own power independent of the power grid.
Under the program, Green Mountain Power will offer a combination of efficiency upgrades, solar, batteries, home energy management and backup generators to customers building, or already living in, a home far from the grid — a not-uncommon scenario in the mostly rural state.
Instead of paying upfront for all that technology, customers will pay the utility a monthly fee. According to the filing with the Vermont Public Service Board describing the plan, that fee is expected to fall between $400 and $850 for homes with an average monthly energy consumption between 400 and 800 kilowatt-hours.
That may sound like a lot of money for electricity and heat. But it’s likely a lot less than it would cost for a homeowner to install and fuel their own systems of a similar size — or, alternatively, pay for the utility to extend its power lines to reach them. Green Mountain Power, for its part, will recover its fixed costs, plus a small margin that will flow back to the rest of its customer base.
That’s what makes the deal a win for customers and utility alike, Green Mountain Power CEO Mary Powell said. Beyond that, it’s an opportunity to keep ahead of the trends of falling solar and battery prices that are expected to put grid disconnection within reach of more and more homeowners over the coming years.
“I don’t know if we’re going to get hundreds of people pounding down our door to get this,” Powell said in a Tuesday interview. “But there are Vermonters who’ve had to cobble systems together on their own to get off the grid. This is our opportunity to streamline it for customers, and be the company that does energy as a service. Why should it all be about grid-connected energy?”
Green Mountain Power’s move into off-grid power grew out of some of its ongoing work in distributed energy, Powell said. Those include its Stafford Hill community microgrid project, which is designed to keep critical services running during weather-related power outages; its program to offer Tesla Powerwall batteries for lease to homeowners, for use as backup power and as grid assets; and most recently, its microgrid at Emerald Lake State Park.
The latter project, which replaced a long and outage-prone power line with solar and batteries that met the park’s needs at a lower cost, was the inspiration for the off-grid package project, Josh Castonguay, Green Mountain Power’s chief innovation executive, noted in a Tuesday interview.
“There are a good amount of off-grid homes in Vermont today, but they tend to have lead-acid batteries, and use propane for cooking and heating,” he said. Green Mountain Power’s off-grid packages, by contrast, will be designed to minimize the need for propane-fueled heating and cooking to a few winter months, or no more than 20 percent of the year. That should reduce carbon emissions by more than 30 percent, compared to a typical grid-connected home, he said.
Green Mountain Power is working with contractor Peck Electric for the first installations, and will use inverters and control systems from OutBack Power, and batteries from Aquion Energy, as well as the new version of the Tesla Powerwall, he said. The utility will use cellular connections to monitor and manage these connected devices, along with a home energy control system to keep usage within the limits of the energy being generated and stored at each home.
All in all, it’s an innovative way for the utility to get involved in a class of customers that could start expanding dramatically in coming years, as the price of solar PV and batteries continues to fall into ranges that make them an economically viable alternative to grid power. This scenario, known as “grid defection,” could become a potentially disruptive one for utilities in regions with high power costs and ample sunshine, starting with Hawaii, but potentially spreading to tens of millions of customers over the coming decade.
Lots of utilities are looking for ways to own distributed energy resources (DERs), but few if any have taken the step into off-grid solutions, as Green Mountain Power is doing. There are many regulatory challenges to utilities moving into this kind of behind-the-meter activity, of course. Green Mountain Power has benefited in this regard from Vermont’s unusual “alternative regulation” regime that allows it to try novel projects like these.
But in Powell’s view, this off-grid model is something that other utilities will increasingly be exploring in the coming years. “Half the states in the nation, at least, have not deregulated. There are energy companies on top of energy companies to which this model is completely available. [In the states] that have jumped more early to deregulation, we’re going to see a lot more interesting models emerging.”
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