Solar Industry, Utilities Seek Common Ground

The solar industry is split over whether utilities are allies or adversaries.

SALEM, OR - NOVEMBER 14: Andrew Koyaanisqatsi installs solar panels for a domestic hot water system November 14, 2005 in Salem, Oregon. Koyaanisqatsi, owner of Solar Energy Solutions in Portland, works full time as a solar panel installer and represents a growing trend for home owners in Oregon seeking energy efficiency. 
National Journal
Feb. 20, 2014, 2:51 p.m.

A di­vide with­in the sol­ar in­dustry over wheth­er util­it­ies are an ally or an ad­versary could be a stum­bling block in emer­ging ef­forts to over­haul rate struc­tures for cus­tom­ers who provide some of their own elec­tri­city.

With rooftop sol­ar pan­els pop­ping up across the coun­try at a re­cord pace, rate is­sues have taken cen­ter stage in high-pro­file reg­u­lat­ory cases in Ari­zona, Cali­for­nia, and oth­er states over the past year. The is­sues are nowhere near settled, but cer­tain seg­ments of the sol­ar in­dustry and some of its back­ers say there should be less squab­bling and more co­oper­at­ing between clean-en­ergy pro­viders and big util­it­ies.

There is even a new ef­fort by two ma­jor or­gan­iz­a­tions of­ten at odds with each oth­er to open a dia­logue on the is­sue.

Last week, the Edis­on Elec­tric In­sti­tute, a trade as­so­ci­ation rep­res­ent­ing in­vestor-owned elec­tric com­pan­ies, and the Nat­ur­al Re­sources De­fense Coun­cil, one of the na­tion’s largest en­vir­on­ment­al groups, re­leased a joint state­ment in sup­port of policy changes to help put more clean en­ergy on the grid.

“What we’re try­ing to do now is start a con­ver­sa­tion between util­ity and sol­ar pro­viders so that we can equit­ably solve the cost of us­ing the grid,” said Ral­ph Cavanagh, co­dir­ect­or of NRDC’s en­ergy pro­gram.

When it comes to the sub­stance of that con­ver­sa­tion, however, the sol­ar in­dustry is split. A ma­jor reas­on for that is dis­agree­ment with­in the in­dustry over wheth­er util­it­ies are friends or foes.

“The sol­ar in­dustry is very di­verse, and when you look at the vari­ous in­terests at play, they don’t ne­ces­sar­ily align,” said Ju­lia Hamm, pres­id­ent and CEO of the Sol­ar Elec­tric Power As­so­ci­ation, which counts both sol­ar com­pan­ies and util­it­ies among its mem­bers. “But a grow­ing num­ber of voices in the in­dustry are will­ing to sit down with util­it­ies and talk about find­ing a solu­tion that be­ne­fits every­one.”

One seg­ment of the small but grow­ing sol­ar in­dustry has little trust in power-com­pany gi­ants.

“Util­it­ies are con­stantly try­ing to change the rules in a way that would hurt sol­ar,” said Bry­an Miller, pres­id­ent of the Al­li­ance for Sol­ar Choice, an ad­vocacy group for rooftop sol­ar pro­viders. “We’ve worked to start up ne­go­ti­ations, and in some cases util­it­ies have been open to dis­cus­sion, but in many situ­ations what we’re see­ing is that they in­sist on noth­ing short of push­ing policies that would kill rooftop sol­ar.”

Oth­er mem­bers of the sol­ar sup­ply chain see things dif­fer­ently. “A large seg­ment of the sol­ar in­dustry has an out­stand­ing re­la­tion­ship with the util­it­ies,” said Jim Hughes, CEO of First Sol­ar, a sol­ar-pan­el man­u­fac­turer and ser­vices pro­vider. “We work very closely with util­ity pro­viders — they’re some of our largest cus­tom­ers.”

At the heart of the dis­putes are rate struc­tures for cus­tom­ers with sol­ar pan­els.

Sol­ar users in most states can sell ex­cess power back to the grid — a policy that rooftop sol­ar com­pan­ies say is sound. But util­it­ies ar­gue that the flood of elec­tri­city has strained the sys­tem, and they want res­id­en­tial sol­ar cus­tom­ers to pay ex­tra as a res­ult.

This di­vide could be­come a stum­bling block in ef­forts to broker con­sensus over rate struc­tures.

“We’re not all on the same page right now, and that’s only nat­ur­al be­cause we’re a young in­dustry,” said Tom Wern­er, CEO of Sun­Power, a sol­ar-pan­el de­sign­er and man­u­fac­turer and pro­vider of both util­ity-scale and res­id­en­tial sol­ar. “But en­ergy is a policy-driv­en mar­ket, so a frag­men­ted ap­proach won’t work in the big pic­ture.”

The road to reg­u­lat­ory change will un­doubtedly be rocky. Des­pite the chal­lenge, in­dustry back­ers re­main op­tim­ist­ic that sol­ar can find its way.

“There is com­mon ground [between util­it­ies and the sol­ar in­dustry], and that’s to provide en­ergy and con­sumer choice. As long as we have a true north, we’ll get there,” Wern­er said.

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