The arrangement between Rocky Mountain Power and the rooftop solar industry announced this week, if approved by the Utah Public Service Commission, is a step in the right direction.
The negotiations centered on how much Utah’s largest electrical utility should credit homeowners with solar panels for the extra power they produce beyond what they use. Despite some lofty talk from both sides about our energy future and customer fairness, it really came down to cutting a dollars-and-cents deal that neither discards rooftop solar nor puts it on a pedestal.
Mainly, this deal kicked the can down the road. The PSC, Rocky Mountain and other stakeholders will now undertake a study of costs and benefits that they will deliver in 2020. When that comes out, we’ll be right back fighting this fight again, although perhaps we’ll know more about our future energy mix by then. (The technology to watch is batteries. If solar energy can be captured economically and used later, then people can start thinking about getting off Rocky Mountain’s grid.)
So Gov. Gary Herbert is overselling when he says, “Utah will soon become the first state in the nation to preserve the vital role of our emerging solar industry as it becomes sustainable, without subsidies, in our diversifying energy market.”
Actually, this deal just continues for at least 18 more years the price that existing “net meterers” get for their excess power. That was crucial for the rooftop solar companies who sold their customers multi-year deals based on that price. And new net meterers get close to that price, too, at least until 2020, when we’ll hash this out again and perhaps continue the price. (To clarify, Rocky Mountain only reduces solar customers’ bills if they produce excess power. It doesn’t pay them for that power. If the solar customers produce more power than they consume over an entire year, those customers pay nothing for power, and their excess power goes to reduce power bills for low-income customers.)
So is that current price a “subsidy”? It’s about three times what Rocky Mountain pays to buy power elsewhere, although the solar folks can argue legitimately that their excess power can be delivered to their neighbors far cheaper than the juice coming from big power sources hundreds of miles away.
We’re back to more studying because the parties still can’t seem to crunch the numbers in a way that both sides respect. As a result, we still haven’t answered question of whether the power company’s rate structure unwisely holds back solar development, or whether it makes non-solar customers subsidize the solar folks. The preferred structure does neither of those things.
In the meantime, this deal is probably closer to that sweet spot than Rocky Mountain’s original offer, which would have put the rooftop solar industry in a tailspin. Now, that industry has at least bought time.
We wish all parties well in their study. If the results are not widely accepted, it will be three years wasted.