No free lunch from utilities dooms solar panel sales
One of the Obama administration’s climate goals is for 30 percent of America’s electricity to be generated using solar energy by 2050. That is likely to include the installation of solar panels on the roofs of millions of American homes in the coming decades.
But as falling solar panel prices and concerns about the climate spur a rush to install rooftop solar in many states,
some utilities have begun charging a variety of complicated fees that are leading to a chilling effect on the home solar power markets in those regions.
Though most utilities have not imposed rooftop fees, some that are considering them or have already imposed the fees have seen a stark drop in the number of homeowners applying to install solar panels,
especially in Oklahoma and parts of Arizona.
The Salt River Project, a regional utility in Arizona, imposed a
new rate structure on “self generation” customers earlier this year as a way to recoup
some of the costs generated when customers sell power back to SRP. In the year immediately prior to implementing the fees,
SRP received an average of 600 new rooftop solar applications per month. Today,
it receives 25 applications per month, SRP spokesman Scott Harelson said.
The utility’s decision to implement demand and power distribution charges spurred one of the country’s largest rooftop solar panel installers,
Solar City, to
relocate 85 of its 800 Arizona workers out of state. The company also
filed suit, calling SRP’s charges “anti-competitive.”
“
New rooftop solar applications in SRP territory plummeted roughly 95 percent after SRP announced its terms for new solar customers,” Solar City spokesman Nate Watters said. “We seek to get those fees removed and look forward to showing that utilities cannot exploit their monopoly power to try to eliminate competition from rooftop solar.”
Just this year,
at least five states from Florida to Arizona have implemented or are considering a
variety of new fees for homes with solar panels connected to the grid.
Arizona Public Service Co., for example, is considering increasing its existing monthly charge of
70 cents per kilowatt of installed rooftop photovoltaic capacity
to $3 per kilowatt. UniSource Energy Services, also in Arizona, is
considering a monthly charge of between $6 and $10 per kilowatt. A proposal by
New Mexico’s largest utility would charge $6 per kilowatt.
The
average size of a rooftop solar array is 5 kilowatts.
In Oklahoma, Gov. Mary Fallin signed a bill into
law last year after lawmakers worried that rooftop solar customers were not paying their share of the cost for the utility to maintain the power lines.
Oklahoma Gas and Electric has fewer than 300 rooftop solar customers among the 750,000 it serves.
Since the law took effect, that number has not been growing.
“Inquiries have chilled dramatically,”
Steve Wilke, founder of rooftop solar installer Delta Energy and Design in Norman, Okla., said. “People just think that there’s no way solar can work for me now. It’s an uphill battle for us.”
Some of the fees and other charges are complicated, and it can be difficult for people interested in installing solar panels to understand the costs.
http://www.scientificamerican.com/article/new-fees-may-weaken-demand-for-rooftop-solar/
Too bad, that green power does not look so appealing without that free lunch.
