|
 In California, regulators voted in January to preserve so-called
net metering, which requires utilities to purchase surplus power
generated by customers with rooftop solar panels. But neighboring
Nevada scrapped the policy - prompting solar companies to flee the
state.
The decisions foreshadow an intensifying national debate over public
support that the rooftop solar industry says it can't live without.
"Without net metering, it just doesn't work," said Lyndon Rive,
chief executive of top U.S. residential solar installer SolarCity
Corp.
More than 25 of the 40 U.S. states with net metering policies are
reconsidering them, according to the North Carolina Clean Energy
Technology Center at North Carolina State University.
Opponents raise fairness concerns and argue that the industry no
longer needs generous incentives, citing its rapid growth and solar
panel prices that have fallen about 40 percent in five years.
Net metering credits solar users - at full retail rates - for any
surplus power their panels generate above household usage. That
means many customers pay no monthly utility bill or even rack up
excess credits, which they can redeem later in months when their
systems produce less power than their home uses.
 For most customers, net metering and other incentives are essential
to make solar power worth the steep upfront investment - between
$17,000 and $24,000 for a typical system, according to data from
research firm GTM Research. For systems that are leased, as most
are, net metering creates a monthly savings over typical power
costs.
Solar providers understand those consumer economics, which explains
why SolarCity last month shed more than 550 jobs in Nevada after the
public utilities commission in December voted to end net metering at
retail rates. The commission plans to reduce credits and raise
service charges for solar customers gradually over 12 years.
On Feb. 9, SolarCity blamed Nevada's move for a weakened 2016
outlook that subsequently sent its stock down nearly 30 percent.
SolarCity rival Sunrun has also pulled out of Nevada.
Solar energy makes up less than 1 percent of U.S. electricity
generation in part because of its high cost compared to coal and
natural gas. But the industry has grown quickly in states where high
power prices and generous solar incentives have made it financially
attractive to homeowners.
The federal government offers a tax credit worth 30 percent of the
cost of solar panels and installation. In December, the U.S.
Congress extended that policy for another five years. It had been
scheduled to drop to 10 percent for commercial systems and expire
entirely for residential systems at the end of this year.
Such public support helped push U.S. installations to 7.2 gigawatts
worth of photovoltaic panels last year - more than eight-and-a-half
times the amount installed in 2010, according to GTM Research. That
growth, in turn, has brought increased scrutiny of continued public
support.
"None of this would be much of an issue today if solar hadn't been
so incredibly successful," said Benjamin Inskeep, who tracks state
solar policies for the North Carolina Clean Energy Technology
Center.
 Utilities have argued that solar subsidies benefit more affluent
homeowners at the expense of everyone else. With solar users buying
less power - or even selling it, through net metering - that leaves
fewer ratepayers to share the cost of traditional power generation,
utilities say.
Warren Buffett’s Berkshire Hathaway Inc is the owner of NV Energy,
the Nevada utility that proposed the state’s move away from net
metering. In his annual letter to shareholders last week, Buffett
warned that “tax credits, or other government-mandated help for
renewables, may eventually erode the economics of the incumbent
utility.”
Solar supporters counter that the costs of the traditional grid
should fall with the rise of solar because utilities will eventually
need fewer power plants and transmission lines.
[to top of second column] |
Net metering, solar companies argue, fairly compensates owners for
energy they feed back into the grid - so it should be a permanent
policy, not a temporary boost to get the industry going.
"Net metering doesn't need a replacement," said Sunrun spokeswoman
Lauren Randall. Sunrun leads The Alliance for Solar Choice, the
coalition of solar installers that has been most aggressive in
lobbying to preserve net metering. If such policies are rolled back,
solar users may decide to disconnect from the grid entirely once
emerging battery storage options become more available and
affordable, Randall said.
For now, net metering - or its absence - has a major impact on solar
adoption. Salt River Project, an Arizona utility, effectively halted
installations in its territory last year after enacting less
generous rates.
The industry is gearing up for another battle over solar rates in
that the state, one of the leading solar markets. The public
utilities regulator there is considering the request of a small
rural power company, UniSource Energy Services, to reduce net
metering rates and add a series of charges for solar users.
The utility, a unit of Canada's Fortis Inc, said in a regulatory
filing last year that residential usage per customer declined 4
percent between 2012 in 2014, in part because of the rise in solar
installations.
How the Arizona Corporate Commission rules on UniSource's rate case
is expected to signal how it will approach rate cases from five
other state utilities seeking changes to how solar customers are
compensated - including the state's largest utility, Arizona Public
Service.
Net metering is also being reviewed in smaller venues, such as Maine
and New Hampshire, and in traditionally solar-friendly markets such
as Massachusetts and New York.
In some states with fledgling solar markets, officials have tended
toward less generous net metering policies. Mississippi approved a
plan last year that pays solar users below retail rates for their
excess power. Maine is expected to introduce a bill this year
calling for gradual rate reductions over time, said Sara Gideon, the
Maine legislature's assistant majority leader.
The Maine policy, she said, aims for fair rates while also giving
solar users certainly over their costs for years to come.
The debate has already made waves in Hawaii - where 23 percent of
households have solar, far more than any state. The high
concentration raised concerns about grid reliability and questions
of fairness for the 77 percent of households shouldering traditional
power costs. As a result, the state last year cut net metering rates
to half of retail value.
In California, about 3 percent of ratepayers have solar systems. The
state's regulators in January preserved net metering in a narrow
3-to-2 vote but also added fees on solar users. The dissenters
favored a less generous framework.
The narrow victory in such a pro-solar state was telling, according
to a consultant to utility trade group Edison Electric Institute,
which has vigorously opposed net metering.
"That tells you," said Ashley Brown, executive director of the
Harvard Electricity Policy Group, "that the opinion is beginning to
change."
[© 2016 Thomson Reuters. All rights
reserved.]
Copyright 2016 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.
 |
