Are Utilities Wilting From Heat of Solar Competition?

A man brooms in front of a house with solar panels on the roof in Grevenbroich near Aachen, southern Germany on September 11, 2012.
National Journal
Clare Foran
Dec. 23, 2013, 12:36 a.m.

Sol­ar en­ergy has be­come in­creas­ingly power­ful. Its rise to the top, however, hasn’t been without a few bumps along the way. 

Reg­u­lat­ory battles pit­ting the sol­ar in­dustry against power com­pan­ies in a fight over pay­ment mod­els played out in sev­er­al states this year. As the dust settles, sol­ar pro­viders are claim­ing vic­tory. Util­it­ies, on the oth­er hand, are try­ing to re­frame the con­ver­sa­tion en­tirely by in­sist­ing they aren’t an en­emy of the in­dustry.

Much of the de­bate so far has centered around a policy on the books in 43 states called net-meter­ing. Net-meter­ing al­lows rooftop sol­ar own­ers to sell ex­cess elec­tri­city back to the grid, with util­it­ies is­su­ing full re­tail cred­it to the cus­tom­er based on the amount of power they provide.

Util­it­ies are push­ing to scale back or get rid of net-meter­ing, call­ing it a sub­sidy that sol­ar has out­grown. The rooftop sol­ar in­dustry, on the oth­er hand, has res­isted the fight to dis­mantle net-meter­ing, ar­guing that it’s an equit­able way of pay­ing for power gen­er­a­tion.

In a series of high-pro­file cases this year in Ari­zona, Cali­for­nia, Idaho, and Louisi­ana, state law­makers and reg­u­lat­ory com­mis­sion­ers sided with in­dustry and moved to either up­hold or strengthen net-meter­ing.

“The na­tion­al story right now is quite clear,” said Bry­an Miller, the pres­id­ent of the Al­li­ance for Sol­ar Choice, a sol­ar-ad­vocacy or­gan­iz­a­tion. “There have now been four ma­jor ver­dicts on net-meter­ing, and in every case pro­posed reg­u­lat­ory changes to the policy have been re­jec­ted.”

A second point of con­ten­tion has been wheth­er util­it­ies should charge sol­ar cus­tom­ers ex­tra. Util­it­ies say ad­di­tion­al fees are needed to de­fray the cost of grid up­keep. Op­pon­ents say power com­pan­ies simply want to stamp out com­pet­i­tion.

In Novem­ber, Geor­gia Power backed down from a pro­pos­al to tack on fees for rooftop sol­ar cus­tom­ers amid pres­sure from con­sumer ad­voc­ates and sol­ar boost­ers. And in Idaho, the state pub­lic util­it­ies com­mis­sion re­jec­ted a sim­il­ar pro­pos­al.

Ari­zona bucked the trend when the Ari­zona Cor­por­a­tion Com­mis­sion de­cided that Ari­zona Pub­lic Ser­vice, the state’s largest util­ity com­pany, could hike rates for sol­ar cus­tom­ers.

It sounds like a win for the util­ity. But sol­ar groups say it’s not.

“In Ari­zona, APS got a lot less [in terms of the fee] then what they were ask­ing for,” Miller com­men­ted. “They wanted the fees to be some­where in the range of 50 to 100 dol­lars so the fi­nal rul­ing shows the polit­ic­al bound­ar­ies of the is­sue. And at the same time the com­mis­sion up­held net-meter­ing.”

Util­it­ies pro­viders, un­sur­pris­ingly, have a some­what dif­fer­ent per­spect­ive. 

“The com­mis­sion’s de­cision re­cog­nizes there is a cost shift oc­cur­ring where sol­ar users aren’t pay­ing what they should for use of the grid,” said Dav­id Owens, the ex­ec­ut­ive vice pres­id­ent of the Edis­on Elec­tric In­sti­tute, a trade as­so­ci­ation for U.S. in­vestor-owned elec­tric com­pan­ies.

Sol­ar groups gained more ground than they lost this year. But de­clar­a­tions of vic­tory by either side fail to cap­ture the whole pic­ture. 

“There is an un­fair char­ac­ter­iz­a­tion of util­it­ies versus sol­ar,” Owens said. “I’m not afraid of rooftop sol­ar. We see op­por­tun­it­ies there and we’re in­vest­ing in util­ity scale and oth­er sol­ar pro­jects. We’re not anti-sol­ar at all.”

What is clear is that head­ing in­to next year the ques­tion of sol­ar power pay­ment has not been re­solved.

State-level de­cisions im­pact­ing net-meter­ing and fees for sol­ar cus­tom­ers are be­gin­ing to look like just the start of a much lar­ger con­ver­sa­tion around re­work­ing util­ity pay­ment struc­tures in the age of dis­trib­uted gen­er­a­tion, an era whose hall­mark will be cus­tom­ers that cre­ate their own elec­tri­city without need­ing to rely on a cent­ral­ized power gen­er­at­or.

Both sides know the con­ver­sa­tion is com­ing, if it hasn’t already ar­rived.

“What we need to be talk­ing about is what’s the best way to al­loc­ate costs and how can we do this equit­ably and con­tin­ue to en­hance the grid,” Owens said. “What we’ve seen this year is a re­cog­ni­tion in vari­ous states that cur­rent rate-design struc­tures are not work­ing and they need to be re­vis­ited.”

For once, rooftop sol­ar ad­voc­ates don’t dis­agree. 

“I think we’re see­ing is that reg­u­lat­ors real­ize that you have to ad­dress these is­sues in the con­text of rate design,” Miller said. “The main thing is that when we look at rate design as a whole, sol­ar shouldn’t be made a tar­get.”

What We're Following See More »
STAYING RELEVANT TIL 2020?
Rubio May Run for Reelection After All
7 hours ago
WHY WE CARE
SOCIAL ISSUES ROIL CONGRESS AGAIN
LGBT Amendment Sinks Energy and Water Approps
9 hours ago
THE LATEST

The House voted down the otherwise uncontroversial Energy and Water appropriations bill Thursday after Democrats succeeded in attaching an amendment affirming LGBT job discrimination protections for military contractors. More than 40 Republicans supported the amendment, but when it came to vote on the bill, 130 Republicans joined all but six Democrats to sink the bill. Speaker Paul Ryan said Democrats voting against the bill after securing the amendment shows their intention was to scuttle the process. Democrats, however, blamed other so-called poison-pill amendments for their votes against the bill. Nonetheless, Ryan said he intends to continue the appropriations process.

AKNOWLEDGING THE INEVITABLE
UAW: Time to Unite Behind Hillary
10 hours ago
THE DETAILS

"It's about time for unity," said UAW President Dennis Williams. "We're endorsing Hillary Clinton. She's gotten 3 million more votes than Bernie, a million more votes than Donald Trump. She's our nominee." He called Sanders "a great friend of the UAW" while saying Trump "does not support the economic security of UAW families." Some 28 percent of UAW members indicated their support for Trump in an internal survey.

Source:
SCREENING DELAYS
70,000 Have Missed American Airlines Flights This Year
10 hours ago
THE LATEST

"Airport screening delays have caused more than 70,000 American Airlines customers and 40,000 checked bags to miss their flights this year, an executive for the airline told a U.S. congressional subcommittee on Thursday. A shortage of staff and a surge in air travelers have created a nightmare scenario for the U.S. Transportation Security Administration (TSA), with airport wait times in places like Chicago stretching beyond two hours."

Source:
AP KEEPING COUNT
Trump Clinches Enough Delegates for the Nomination
12 hours ago
THE LATEST

"Donald Trump on Thursday reached the number of delegates needed to clinch the Republican nomination for president, completing an unlikely rise that has upended the political landscape and sets the stage for a bitter fall campaign. Trump was put over the top in the Associated Press delegate count by a small number of the party's unbound delegates who told the AP they would support him at the convention."

Source:
×