Solar Farm Jobs: The Case for Updating Kentucky's Net-Metering Laws



By: Will Emmons, Staff Member

It's no secret that Kentucky's once central crop of tobacco has become less and less a part of our agricultural economy. The 2007 USDA Census of Agriculture reported that Kentucky had shed just shy of 40,000 jobs in tobacco farming in the decade between 1997 and 2007, amounting to just south of 83% of all tobacco jobs in the Commonwealth.[1] While we all reap public health benefits from being part of a society that smokes less, the impact of this decline on our farming communities has been devastating.

In a recent paper, University of Kentucky Professor of Agricultural Economics David Derbetin states that although the shift to producing different commodities cannot produce equivalent income to tobacco, this shift does provide an opportunity for farmers.[2] In this blog post, I argue that Kentucky's energy laws are preventing farmers from producing a lucrative commodity: solar power.

During last year's legislative session, an organization representing small farmers called the Community Farm Alliance sought to update Kentucky's net-metering laws for small scale renewable energy production.[3] Net metering laws, a product of the 1980s, control what benefit utilities companies must give small scale producers of renewable energy for pumping energy into the grid.[4] These laws exist at the state level in 43 states, including Kentucky, and vary widely from state to state.[5] States where the utility companies have a stronger lobby limit the percentage of energy subscribers who may participate. The limitations on the number of kilowatt hours a subscriber may be compensated for and what kind of compensation subscribers receive are also areas of broad variance.[6]

Currently, Kentucky allows small scale energy producers to be compensated for up to 30k into the grid per annum and receive compensation at retail rate from utility companies for this electricity.[7] This is a relatively low limit geared toward domestic producers. However, if we followed North Carolina and upped our limit to 1000kw and required our utility companies to sell more renewable energy, we could provide a real economic opportunity for our small farmers.

In the past five years following a new raft of clean energy legislation, 100 new solar farms have popped up across the Tarheel state.[8] According to one estimate, the boom has created 15,000 new jobs in the renewable energy sector.[9] The winners are North Carolina's formerly tobacco-dependent rural communities. We should follow suit.
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[1] The Shrinking Role of Tobacco Farming and Tobacco Product in Kentucky's EconomyCampaign for Tobacco Free Kids (Feb. 19, 2009), http://www.kyvoicesforhealth.org/news/images/files/Kentucky%20Tobacco%20Farming%20Trends%202-19-09.doc.
[2] David L. Debertin, Emerging Trends in Kentucky Agriculture and the Future of Rural Kentucky in the 21st CenturyUniversity of Kentucky College of Agriculture, http://www.uky.edu/~deberti/exten.htm (last visited Nov. 24, 2012). 
[3] Phil N. Ferrill, Community Farm Alliance criticizes General Assembly's failure to act on net-meteringBarefoot & Progressive (April 9, 2011), http://www.barefootandprogressive.com/2012/04/community-farm-alliance-criticizes-general-assemblys-failure-to-act-on-net-metering.html.
[4] Stephanie Watson, How Net Metering WorksHowstuffworks, http://science.howstuffworks.com/environmental/green-science/net-metering.htm (last visited Nov. 24, 2012).
[5] Net MeteringDatabase of State Incentives for Renewables & Efficiency (Nov., 2012), http://www.dsireusa.org/documents/summarymaps/Net_Metering_map.pdf.
[6] Id.
[7] Ferrill, supra note 3.
[8] Sammy Fretwell, Farmers Grow Profit with a New Crop: Solar PanelsNews Observer (Nov. 12, 2012), http://www.newsobserver.com/2012/11/11/2478266/farmers-grow-profits-with-a-new.html.
[9] Id.