(Photo courtesy Rising Sun Solar)
The conflict between electric utilities and distributed energy— mainly rooftop solar panels — is heating up.
David Roberts takes a look at the fight over utilities who don’t want to take more rooftop solar – a subject that is hot in Hawaii, where folks are being charged $3000 for “interconnection studies” and being denied the opportunity to install PV.
In Utilities vs. rooftop solar: What the fight is about Roberts writes:
“solar panels could destroy U.S. utilities, according to U.S. utilities ” — but it’s worth taking a closer look at what’s under dispute. Some bits are unavoidably wonky and technical, but it’s important to understand exactly what’s happening. This is a pivotal issue, a trial run for many such struggles to come.
There’s a short-term problem and a long-term problem. The former is about how electricity rates are structured, specifically how utilities compensate (or don’t) customers who generate power with rooftop solar PV panels. The latter is about developing an entirely new business model for utilities, one that aligns their financial interests with the spread of distributed energy. The danger is that fighting over the former could delay solving the latter.
He explains why utilities like HECO/MECO are trying to reduce rooftop solar:
Into this milieu comes “net metering,” a policy in place in just over 40 states (though the details differ substantially from state to state). Under net metering, a residential customer with solar on her roof is credited the retail rate for the electricity she produces. If she produces as much electricity as she consumes, her bill nets out to zero. That means she’s not paying for electricity, but it also means she’s not paying anything toward the utility’s fixed costs. As more customers zero out their bill through net metering, fixed costs will be transferred to a smaller group of ratepayers, thus raising their rates (and their unholy ire).
According to utilities, this is not fair, since solar customers are still making use of the grid and the services that utilities provide. In fact, they say, the complexity of managing thousands of distributed solar panels makes grid management more difficult and costly. Through net metering, the customers who can’t afford solar end up subsidizing grid services for those who can.
That’s why utilities view net metering as unsustainable. That’s why they’re going after it in California, Texas, and elsewhere.
But solar advocates and industries are organizing to fight this position:
So no, utilities are not upset that solar is (allegedly) increasing some customers’ rates; they’re upset that solar is reducing their revenue. Rooftop solar panels are investments upon which utility shareholders receive no return. It’s competition they don’t like, the potential loss of their captive customers.
That, say solar advocates, is the core utility incentive, so anything from utilities about what they “need” to cope with solar should be taken with a large teaspoon of salt.