Gehrke: Regulators should reject Rocky Mountain Power’s plan and keep powering the solar industry

Francisco Kjolseth | The Salt Lake Tribune The Salt Lake Tribune staff portraits. Robert Gehrke.

A couple weeks ago there was a knock on my door, the kind I’m sure we’ve all had, from a young man interested in selling me rooftop solar panels.

The pitch made sense — get off the grid, produce clean energy and cut your electric bill in the process.

It’s the reason you’re probably seeing solar panels atop so many of your neighbors’ homes. Maybe they’re on yours. Around the state, an estimated 20,000 Utahns have installed rooftop solar and are supplementing our traditional power supplies with clean energy.

A proposal by Rocky Mountain Power, now being considered by Utah’s Public Service Commission, could be devastating to the growth in the industry. On Wednesday, about 150 Utahns turned out, mostly to plead with commissioners not to give the power giant what it wants.

Rick Egan | The Salt Lake Tribune Rocky Mountain Power wants net-metered customers to pay more for their use of the grid, offering a plan that solar proponents say will harm the growing industry.

At its core, Rocky Mountain Power wants to reduce the amount of credits it gives solar users who put electricity back on the grid. Currently they give one retail credit for every excess unit a solar customer generates. It was a compensation plan put in place in 2008, intended to incentivize the build-out of rooftop solar, and it’s worked.

According to the Utah Solar Energy Association, there are more than 4,000 solar jobs in the state and the number grew by 1,729 last year alone, making it the state’s fastest-growing industry.

Now Rocky Mountain says it has been too generous, solar customers aren’t paying their fair share to maintain the power grid, and, as a result, everyone else is subsidizing the bills of people with panels on their roofs.

“The rooftop solar industry should stand on its own without subsidies from customers,” the company wrote in comments to the Public Service Commission. “We simply ask them to pay the actual cost of service with an appropriate compensation for energy they deliver to the grid—no more, and no less.”

Hard to argue with that. But I will anyway.

The problem with what Rocky Mountain is proposing is that those 20,000 rooftop solar customers made substantial investments based on the existence of various tax credits from the state and the ability to sell electricity to the utility.

For example, it would have cost about $16,000 to put 10 panels on my roof and part of the reason it would have penciled out is because of the anticipated credits for the electricity I could sell back to the utility. Reduce those credits by, say, 10 percent, and the math no longer works.

The Utah Solar Energy Association estimates it now takes about 12 to 13 years for solar customers to break even on their investment. Reducing the credit may mean they wouldn’t hit the break-even point for up to 30 years.

When Nevada passed similar reductions in net-metering credits — at the behest of Berkshire Hathaway, Rocky Mountain’s new owner — nearly the entire solar industry disappeared overnight. Applications for new rooftop solar plummeted by 92 percent and nearly a third of the jobs in the industry left. Within months, the Nevada Legislature reversed the change.

“This is not in the public interest,” Dan Black of Vivint Solar told the PSC on Wednesday. “Given the drastic economic effects of RMP’s proposal, few if any Utah residents will choose to invest in rooftop solar if RMP gets its way.”

In Vivint’s case, Black said, 425 solar jobs would leave the state.

To avoid the Nevada catastrophe, those who already have solar panels would be grandfathered in for a period of time — somewhere between 13 and 18 years, depending on the PSC’s decision — which is a sensible first step to keep the bottom from dropping out of Utah’s solar industry.

But let’s talk a little more about this subsidy that has Rocky Mountain Power so tied up in knots.

The utility estimates that rooftop solar customers are getting a $400 subsidy each on the backs of the rest of the electric users. It sounds like a lot, but when you spread that expense across the roughly 750,000 non-solar customers the power company serves, the rest of us are paying somewhere between 19 cents and 38 cents per month to subsidize solar users.

It’s basically the change you leave in the little penny dish when you buy a Big Gulp.

And those estimates don’t fully reflect solar’s benefits, like diminishing our reliance on fossil fuels, reducing pollution, slowing climate change, saving some polar bears and, to some small extent, helping our air quality. (Because the fossil fuels are burned away from the Salt Lake valley, solar doesn’t actually do much to reduce local pollution, but could reduce emissions in central Utah, where the power plants are located).

Rocky Mountain’s true motivation appears to be propping up it’s age-old business model. Think about it: Power companies make money first by generating electricity at large coal or gas power plants and second by delivering that power.

The explosion of rooftop solar jeopardizes that whole model by dispersing the production and making customers less reliant on power lines. Squashing or slowing solar’s growth preserves Warren Buffet’s substantial investment in Utah’s utility company.

On Friday, solar and consumer advocates opposed to Rocky Mountain Power’s proposal asked the Public Service Commission to postpone public hearings, scheduled to resume Monday, for 30 days so they could try to negotiate a resolution. There’s no real urgency to the utility’s original request and the delay in hopes of a compromise solution makes sense.

If the Public Service Commission feels it needs to act sooner, it needs to be cautious, grandfathering in new solar customers and implementing the changes gradually.

As the cost of solar comes down, the meager subsidies won’t be needed, but we’re not there yet. And while giving Rocky Mountain Power what it wants immediately could mean fewer knocks on the door, it would also stunt our transition from a clean energy future.