The future of Utah’s rooftop solar industry, already reeling after an incentive program ended two years ago, rests in the hands of the Utah Public Service Commission as it weighs how much Rocky Mountain Power must pay its solar-equipped customers for the excess power they pump back into the grid.
The monopoly utility, Utah’s largest, sells that power to neighboring homes for about 10 cents per kilowatt-hour, yet it now proposes setting the rate it pays solar-equipped customers for this juice at about 1.5 cents.
Clean energy and solar industry advocates are crying foul, insisting the rate should be much higher given the environmental and climate benefits associated with renewable energy.
Solar system designer Scott Jones, of the Salt Lake City firm Creative Energies, derided Rocky Mountain Power’s proposal as “nefarious.”
“It would have a dire impact on the entire rooftop solar industry,” Jones said. “RMP is unfairly preventing people from realizing a fair compensation.”
Lowballing the value of rooftop solar would discourage Utah homeowners from installing photovoltaics which helps reduce the need for coal-fired electricity and the stress on the state’s electrical grid, advocates argue.
“By providing energy at the time it’s needed at a location very close to where it’s used, a unit of energy exported from a rooftop solar system is going to flow to your neighbor or the guy down the street. It’s not going to go very far in the system,” said Briana Kobor, regulatory director for Vote Solar. “In contrast, if you didn’t have that resource, you would have to put a power plant on the ground, sometimes out of state, carry that energy over transmission lines, over distribution lines and everything would have to be sized appropriately to carry that.”
Earlier this year, Vote Solar gathered transmission and export data from 3,300 of Rocky Mountain Power’s solar-equipped customers to craft a proposal it filed Tuesday with the Public Service Commission. The group’s experts analyzed that data to account for the utility’s avoided energy and capacity costs, financial and security risks, and environmental and societal benefits, concluding the “true value” of rooftop solar is 22.6 cents per kilowatt-hour, 14 times higher than the utility’s proposed rate.
“The exports are occurring in high-value hours. They’re occurring during the peak hours when electricity is costliest on the grid,” Kobor said. “We’ve intended to cast a wide net to paint a clear picture of the full benefits that rooftop solar provides. Rocky Mountain Power just isn’t looking at the whole picture. And they’ve taken a deliberately narrow view of the benefits of rooftop solar.”
Rocky Mountain Power’s proposal is based on its own survey data and the rapidly evolving economics of solar technology, according to utility spokesman Spencer Hall.
“The entire industry has seen the price of solar coming way down,” Hall said. “Now the same reason that those prices are coming down are going to make it so that our entire service territory is able to enjoy the benefits of renewable energy, like wind and solar. Those economics also affect the rooftop solar industry.”
Dropping costs have spurred Rocky Mountain Power to pursue its own “utility-scale” solar projects that can produce power more efficiently than “distributed” rooftop systems, he said.
“That price is reflective of what it costs us to produce and to put [solar power] out there,” Hall said. “When we do it at a utility scale, we offer other things such as maintenance on the system. We’re always on all those things that we have to do to provide service all the time.”
Rocky Mountain Power intends to add 7,000 megawatts of solar in the coming years, dwarfing the 300 megawatts currently installed on Utah roofs. This power will presumably help offset generation capacity lost when the utility retires its two Utah coal-fired plants two decades from now.
"Public relations-wise they say they embrace renewable energy, but only if they build it, own it and sell it to the end user," Jones said. "Distributed photovoltaics competes against their business model."
Under the “net-metering” program that expired in 2017, Utah electric customers enjoyed a one-for-one credit for every kilowatt-hour of power they exported into the grid. These 35,000 homes currently with solar panels are compensated a flat rate of 9 cents that and for those with grandfathered systems that rate is locked in until 2032 or 2035, depending on when the system was installed.
Not surprisingly the rate of solar installations on Utah homes plummeted with the expiration of net metering. New installations peaked at 12,408 in 2017. Last year, only 3,540 new installations came online and at least 600 jobs associated with rooftop solar have been lost in Utah, while SunRun, the nation’s largest solar installer, shuttered its Utah operations, according to Ryan Evans, president of the Utah Solar Energy Association.
“The rate of compensation for energy put back on the gird should be close to retail, if not above retail," Evans said. "There have been great community benefits, beyond utility benefits, that are not being compensated for.”
Utah’s Public Service Commission should require an export credit that is not just fair, but also one that provides homeowners certainty so they can make wise financial decisions regarding solar, he added.
The commission will hold a public hearing Oct. 5 and render a final decision by year’s end. The new rate would be applied to those who install systems starting in 2021.