Utah Latest Battleground State In War On Residential Solar
Rocky Mountain Power is all for solar power, provided it comes from its own solar farms. It has recently completed a 20 megawatt solar farm in the eastern community of Holden. The power generated by that facility is being sold in 200 kilowatt hour blocks to RMP customers who want to use sustainably sourced electricity and insulate themselves from future price increases. Each block is good for 20 years and can be transferred to a new location if the owner moves during that period (provided its within the RMP service area, of course).
In 2012 there were about 2,000 homes with rooftop solar but now that number is closer to 17,000. At first, RMP would pay residential solar customers the retail price of electricity for any excess power they sent back to the grid. That is a process known as net metering. In 2012, the amounts involved were small, but as the number of rooftop solar systems has grown, it amounts to a significant amount of money.
Rocky Mountain Power spokesman Paul Murphy says they pay homeowners with solar panels about 14 cents per kilowatt hour for excess power but can buy solar power from commercial solar panel farms for 4 cents per kilowatt hour. Murphy says the utility is happy to pay residential customers the same 4 cents a kilowatt hour it pays commercial suppliers but it wants the state’s public utility commission to allow it to stop paying private providers the full rate of 14 cents per kilowatt hour after December 9.
If the PUC grants the request, it could have a negative effect on the growth of rooftop solar in Utah. When officials in Nevada approved a similar proposal, SolarCity stopped doing business in the state, laying off hundreds of workers. To make matters worse, the Nevada PUC also approved significant new monthly surcharges on the utility bills of all rooftop solar owners or lessees.
Murphy says if the rate of reimbursement is reduced, it will allow Rocky Mountain Power to buy more clean power. The utility can buy a lot more electricity at 4 cents per kWh than it can at 14 cents per kWh. That much is intuitively obvious to the most casual observer. And that is the central issue in the dispute between rooftop solar owners and utilities all across the country.
Utilities across the country argue that rooftop solar systems place a burden on other customers who do not have them. But a report by the non-partisan Brookings Institute shows that 12 states have examined this issue and decide that net metering actually provides more benefits than it costs.
At the heart of the debate is the fact that utility companies are legal monopolies authorized by the various states. They have grown accustomed to operating centralized grids and collecting their lawfully guaranteed rate of return on their investments. Anything that interrupts their customary business model is treated as a threat and they react accordingly.
The factor that will change all these calculations is the arrival of affordable energy storage systems for homeowners like the Tesla Powerwall 2.0. At $5,500, it is a self contained battery and inverter that stores enough energy to power the home of a typical family of four for 24 hours. If it is fully charged by solar panels during the day, it can keep the lights and TVs on at night. In theory, a family with a complete system would not have to purchase any electricity from the local grid. That prospect scares the bejezus out of utility companies.
The Powerwall 2 will be available soon. Expect it to do what Elon Musk enjoys doing most — disrupt establishment types who think they have a God given right to continue doing business as usual forever and a day. When it starts getting installed in thousands of homes, that is when things are going to get really interesting.
Source and photo credit: Fox 13 News, Salt Lake City