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How regulators and legislators make it harder for you to use solar power

Lucas Mearian | Feb. 25, 2015
Legislative efforts to squelch net metering abound

rooftop photovoltaic array
Workers install rooftop photovoltaic panels in Poughkeepsie, N.Y.  Credit: Creative Commons Lic. via Computerworld

When homeowners or businesses install solar panels, state laws ensure utility companies pay for unused power that is routed back into the power grid - a practice known as net metering.

Currently, 43 states and the District of Columbia have implemented net metering policies, some of which are more favorable than others, but all of which turn the power grid into a two-way street.

The cost of rooftop solar-powered electricity will be on par with prices for common fossil-fuel power generation in just two years, and the technology to produce it will only get cheaper, according to Deutsche Bank's leading solar industry analyst, Vishal Shah.

As Americans have warmed to solar power and its ability to reduce electrical bills, utilities are suffering revenue losses and have been seeking ways to recoup that money.

Utilities are leading efforts to reduce net metering benefits
Hawaiian Electric Co. Inc. this year asked the state's Public Utilities Commission to abolish its energy metering policy because customers with photovoltaic panels aren't paying their fair share of maintenance costs.

Indiana legislators are pushing bills to make it more costly for consumers there to go with solar by reducing tax credits awarded for it. Legislation, such as HB1320, introduced by Indiana state Rep. Eric Koch, a Republican, would compel fixed charges on customer bills and reduce tax credits. The bill comes as the solar industry is fighting to get on its feet in the Hoosier state.

Koch, has said the bill's purpose is "to promote and grow net metering." Democratic state Rep. Matt Pierce said the bill "would effectively end net metering" by eliminating the incentive to deploy solar power.

Other states, such as Arizona, California, Hawaii, Idaho, Ohio, New Mexico, Louisiana, and Wisconsin, are discussing or have passed revisions to their net metering policies that would included fixed monthly surcharges for residences and businesses that install solar to make it less competitive with conventional forms energy.

For example, the Arizona Corporation Commission (ACC) -- the state's public utilities authority -- voted to charge $0.70 per kilowatt to solar owners to help offset utility revenue losses associated with the growth of rooftop solar. After legislative pushback, the monthly surcharge was lowered to $7 for a 10KW residential solar system and roughly $5 for the more typical 7KW system.

Last year, the Kansas House Energy Committee passed an anti-net metering bill (HB 2458) that was pushed by two major utilities -- Westar Energy and Kansas City Power & Light.

The bill was eventually amended and was passed by the committee. If made into law, it would allow utilities to pay solar customers using net metering less than the retail rate of electricity. In turn, utilities could use the excess electricity that customers were turning back to them and sell it at the retail rate.


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