Beware of Utility Tactics used to Slow the Growth of the Solar Market

 We have seen a noticeable growing pattern of utility monopolies who are pulling all policy stops to slow the growth of the solar market. There was a fight against net metering for solar one that reached high profile last year in sunny Arizona as well as another in Georgia which led to a coalition between the Sierra Club and the Tea Party.

Solar installations have become the chief iconic symbol for independence and taking control of our energy future. A growing constituency of ratepayers do not want to be held hostage to the cost uncertainty of fossil fuels by being left to the whim of utility monopolies who are passive aggressively trying to slow the transition to renewable options.

One of the tools used by utilities in the old business model is to assert their status as legalized monopolies. This status of natural monopoly was only meant to apply to the realm of transmission and distribution because it would be wasteful and inefficient to route 4 or 5 competing sets of electrical wires down the street. But they are trying to apply the same natural monopoly/ only one provider argument as a weapon to block competing energy generation that is not in their market share.

For example in 2011, Eagle Point Solar installed a 175-kilowatt PV system on a municipal services center roof in Dubuque Iowa. As a result, Alliant Energy Corp. tried to argue in court and to state regulators that it posed an “unfair competitor” impinging on their legal monopoly status as the city’s electric service utility. They tried to classify Eagle Point as an “illegal utility”. However, on Friday July 11th, the Iowa Supreme Court ruled that the Dubuque solar installation in Dubuque does not violate Iowa state law. This potentially ground-breaking decision could be a catalyst for the spread of rooftop solar power.

The other approach to utilities in the old business model is to undercut any policies that would make local renewable energy more cost-effective for a greater number of people.

For instance, the leasing of Solar Panels is one process that has helped lower the up-front costs down to a level where the solar power market can really accelerate. On June 27th Milwaukee-based We Energies put out a proposal that would prevent its customers from leasing solar panels as well as imposing a surcharge on ratepayers. This proposal is unprecedented in the amount of damage it could do to the growth of the solar industry.

Many proposals to slow the growth of the solar market are less brazen, yet still built upon the claim that solar incentives would supposedly lead to increased rates for those who don’t invest in it.

David Eves, the CEO of Xcel's Colorado branch published a letter in response to an article where Xcel was being accused of ending, capping or limiting the reward incentives that a customer will be paid up front for installing solar.

David Eves said the caps on these up-front incentive programs are "in place to protect all Xcel Energy customers from the burden of excessive costs". He then implies that such an individual customer's choice could very well "adversely impact" another customer and hence preferred transitioning to "performance-based incentives".

Scott Simons, a spokesman for Detroit-based DTE Energy stated similar reasons for why his utility is not interested in expanding incentives for residential customers who choose to install solar projects.

“Of course we support the continued development of renewable energy in Michigan, but we want renewable energy policies developed that are cost effective and fair for all of our customers. We know that solar is expensive…”

However on June 10th the Solar Working Group from the Michigan Public Service Commission released the first draft of a report showed how Michigan's two largest corporate-owned utilities could expand their solar programs without a spike in customers’ monthly bills.

Wind and solar energy are no longer inherently more expensive than coal and nuclear energy respectively. The misleading story is that adding renewables raises costs and therefore electricity rates. But what this really means is that non-renewable energy becomes more expensive when we add significant renewable generation. Rate hikes emerge not because renewable energy is more expensive but because renewable energy undermines the previous energy investments they have made. When renewable energy displaces energy non-renewable energy demand, it makes the utilities sunken investments in already built coal and nuclear plants impossible to pay back. We supposedly "captive" ratepayers are considered to be on the hook to pay off the investment costs for this no longer needed extra energy infrastructure all because the state PUC said 10, 20, 40 years ago “Go ahead build it!”. Electricity rates only rise because the incumbent utilities try to require us to pay off the old system at the same time we pay for the new renewable infrastructure. 

It would be unfair to restrict all cases of undercutting localized distributed energy generation to solar power.

Luther College in Decorah, Iowa has been wanting to invest in combined heat and power co-generation from a 1.4 MW gas turbine as a win-win strategy for cutting energy consumption, reduce carbon its footprint and save money. However the utility policies of Alliant Energy have such an exorbitantly high standby rate for users who only sporadically use grid power that it made such a common sense win-win move too cost-prohibitive to be a real option.

High standby rates are a way to financially burden distributed generation projects that would otherwise be reliable, economically viable and do not place any actual burden on the grid other than undermining the orthodox utility business model.

To conclude on a happy note right here in Minneapolis,  Crankshaft Supply owner Jay Miller was able to get his solar installation thanks to a funding mechanism known as Property Assessed Clean Energy, or PACE that uses loans from a voluntary property assessment. The suburb of Edina is well-known for having a PACE program.

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