Rooftop Solar Poses a Threat to the Utilities’ Century-Old Business Model of Centralized Power … So They’re Trying to Make Solar Much More Expensive
One of the main reasons that solar energy is growing so fast in California is “net metering” … i.e. crediting rooftop solar users for surplus power their systems create, which is fed back into the grid for use by other customers.
Currently, rooftop solar owners are credited at the same rate they would pay the utility for electricity.
Not only is net metering a huge incentive to buy solar panels, but it is part of a wave of decentralized energy production which could help to solve our protect against terrorism, fascism and destruction of our health, environment and economy.
But the giant California utilities – PG&E, Southern California Energy and San Diego Gas & Electric – are determined to kill net metering, because it cuts into the profitability of their centralized energy production business.
The Los Angeles Times notes:
For new purchases of rooftop solar, the utility proposals could wipe out the potential savings on power — the main incentive for buying the systems.
Lyndon Rive, chief executive of SolarCity, describes a “catastrophic” future for rooftop solar if the California Public Utilities Commission approves the proposals …
Utility proposals call for crediting solar users at about half the current rates. Utilities would also charge monthly fees, based on the size of a homeowner’s solar system.
The proposed fees could make solar power systems unaffordable — which is exactly what utilities want, Rive and other solar proponents say.
“This is a clear indication that the utilities are trying to stop competition and the solar industry,” said Rive, whose San Mateo, Calif., company operates in 19 states.
Utility critics point to a different motivation: Rooftop solar poses a threat to the utilities’ century-old business model of centralized power and the regulatory framework that supports it. In essence, the more utilities spend to maintain the grid, the more money they make.
The industry trade association, the Edison Electric Institute, referred to rooftop solar and its consumer-friendly cousin, energy efficiency, as “disruptive challenges” in a 2013 report.
The LA Times makes it clear that this is not just a California issue … but is a nationwide campaign:
The debate’s outcome could shape solar policies throughout the nation, as utilities seek to tinker with solar costs. Other states look to California as an innovator on solar policy. The state by far leads the nation in deployment of rooftop and utility-scale solar technology, followed by Arizona, New Jersey, North Carolina and Nevada.
A recent assessment by the North Carolina Clean Energy Technology Center found that 16 of the 44 states with net-metering policies were considering or enacting changes. Wisconsin and Arizona recently imposed significant increases in the amounts that utilities can charge solar users.
After the Arizona policy took effect, applications for rooftop solar installations dropped from hundreds a month to a handful, said Sean Gallagher, vice president of state affairs for the Solar Energy Industries Assn.
“I think it’s clear nationally,” Gallagher said, “that the utilities are concerned about the impact on their business with customers generating their own electricity, and they’re pushing back. What California does may legitimize some of these proposals in other states.”
The Washington Post reported in March:
Three years ago, the nation’s top utility executives gathered at a Colorado resort to hear warnings about a grave new threat to operators of America’s electric grid ….
If demand for residential solar continued to soar, traditional utilities could soon face serious problems, from “declining retail sales” and a “loss of customers” to “potential obsolescence,” according to a presentation prepared for the group. “Industry must prepare an action plan to address the challenges,” it said.
The warning, delivered to a private meeting of the utility industry’s main trade association, became a call to arms for electricity providers in nearly every corner of the nation. Three years later, the industry and its fossil-fuel supporters are waging a determined campaign to stop a home-solar insurgency that is rattling the boardrooms of the country’s government-regulated electric monopolies.
“The utilities are fighting tooth and nail,” said Scott Peterson, director of the Checks and Balances Project, a Virginia nonprofit that investigates lobbyists’ ties to regulatory agencies. Peterson, who has tracked the industry’s two-year legislative fight, said the pivot to public utility commissions moves the battle to friendlier terrain for utilities. The commissions, usually made up of political appointees, “have enormous power, and no one really watches them,” Peterson said.
Solar’s share of global energy production is climbing steadily, and a study last week by researchers from Cambridge University concluded that photovoltaics will soon be able to out-compete fossil fuels, even if oil prices drop to as low as $10 a barrel.
But the arrival of cheaper solar technology has also brought an unexpected challenge to the industry’s bottom line: As millions of residential and business customers opt for solar, revenue for utilities is beginning to decline. Industry-sponsored studies have warned the trend could eventually lead to a radical restructure of energy markets, similar to earlier upheavals with phone-company monopolies.
“One can imagine a day when battery-storage technology or micro turbines could allow customers to be electric grid independent,” said a 2013 Edison study. “To put this into perspective, who would have believed 10 years ago that traditional wire line telephone customers could economically ‘cut the cord’?”
Two-and-a-half years later, evidence of the “action plan” envisioned by Edison officials can be seen in states across the country. Legislation to make net metering illegal or more costly has been introduced in nearly two dozen state houses since 2013. Some of the proposals were virtual copies of model legislation drafted two years ago by the American Legislative Exchange Council, or ALEC, a nonprofit organization with financial ties to billionaire industrialists Charles and David Koch.
There is bipartisan support for solar. As the LA Times writes:
Frustration with utilities has led consumers to begin mounting their own fights, and it has created some unlikely political alliances among grass-roots groups.
Debbie Dooley, a co-founder of the Atlanta Tea Party, has campaigned in Wisconsin and Indiana to protect net-metering laws. Dooley helped expand solar in Georgia, and she is helping lead an effort in Florida to expand solar in the Sunshine State.
Dooley has tapped libertarians and environmentalists such as Greenpeace and the Sierra Club, in addition to conservative groups such as the Christian Coalition.
And the Washington Post notes:
In Republican strongholds, such as Indiana and Utah … anti-solar legislation came under a surprisingly fierce attack from free-market conservatives and even evangelical groups, many of which have installed solar panels on their churches.
“Conservatives support solar — they support it even more than progressives do,” said Bryan Miller, co-chairman of the Alliance for Solar Choice and a vice president of public policy for Sunrun, a California solar provider. “It’s about competition in its most basic form. The idea that you should be forced to buy power from a state-sponsored monopoly and not have an option is about the least conservative thing you can imagine.”