When Robert Nohavec of Park City, Utah; Jabbar Graham from Cherry Hill, New Jersey; and Don Born,
of Waldoboro, Maine installed solar on their homes, they had something
unexpected in common. They were all giving back to their electric
company and their community. That’s because solar energy systems tend to
provide more value to the electric grid and society than the solar
producers are paid under net metering policy, confirmed by a new report released by Environment America.
The report responds to an ongoing battle
between electric companies and their customers over the value of solar
energy. It shows how utilities have—falsely—asserted that customers
saving money with solar are costing them, and that instead solar
customers have been providing benefits far beyond what they’re
compensated for. The following chart illustrates, showing the
relationship between the value of solar energy and the retail
electricity rate (the price per kilowatt-hour solar customers receive
for their solar energy). In every state where the value of solar was
calculated by an independent entity, the value was greater than the
utilities provided for solar energy.
The heart of the battle is described succinctly in the report:
Historically, the relationship
between power generators and consumers had been a one-way street.
Utilities generated the power and customers bought it. Utilities simply
sent customers a monthly bill for the amount of power they consumed.
Utilities were granted a franchise and exclusive monopoly to serve an
area in return for a reasonable opportunity to make a profit. The price
of power was set at a level designed to recover the utility’s cost of
building and operating the power plants, power lines and distribution
systems needed to supply electricity to consumers.
Technologies like solar panels, however, enable electricity consumers to also be electricity producers.
The value of solar studies provide solid
evidence that the utility efforts to curtail net metering have less to
do with protecting ratepayers and more to do with understanding the end of their natural monopoly over power generation.
Ultimately, states may have to step in to fix the archaic electric market. In Minnesota, for example, the state created a value of solar tariff
as an alternative to net metering. In New York, regulators are pursuing
and end to the monopoly of the electric company over the distribution
grid.
There’s still a raging debate about the best strategy
to appropriately value solar. Some feel that net metering is
sufficient, and others argue that it’s an antiquated policy that’s not
reflective of the costs and benefits on the grid. Whatever the policy, Environment
America’s newest report suggests that a properly designed program to
support customer-owned solar needs to reward its full value.
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Want to weigh in?
Join ILSR’s Director of Democratic
Energy and former Austin Energy executive and Executive Director of the
Pace Energy and Climate Center Karl Rabago, for “Freedom to Generate: Alternatives to the ‘Value of Solar’ formula” on July 8, 2015.
http://cleantechnica.com/2015/06/26/solar-net-metering-subsidy-utilities/