Utilities Want Solar Panel Users To Pay More

Every time people install a solar system, it means the need for more power distribution is reduced and the need for more electricity generation by utility companies is reduced. But utilities contend that customers without solar panels are subsidizing those who have them — by paying more for the power generating stations, transmission lines and distribution wires that both groups use. They want regulators to change that pricing structure so people with solar panels pay more.

This is clearly point of view and point of investment.  The utilities want to maintain the return on their investment and so does the solar panel investor. 

Solar advocates say every home that installs solar panels provides a savings for utility companies, and ultimately society: Fewer generating stations must be built, fewer distribution lines must be strung.

Forty-thhree (43) states have adopted net energy metering, but the basic arrangement works like this:

Homeowners install solar panels on their roofs. On sunny days, particularly at midday, those panels can generate more electricity than the home needs. The excess automatically spills back onto the electric grid and is distributed to nearby homes, causing the solar home’s electricity meter to spin counterclockwise. The electricity generator is credited for providing the power and pays less overall than a traditional utility customer.

But at night, on cloudy days and at times of high demand, that customer still needs power from the utility company, which must provide it instantaneously, as it does for other homes. That electricity flows from the only place it can: the company’s generating stations. And it arrives over the giant network of transmission and distribution lines that utility customers pay to build, maintain and expand.

Southern California Edison, for example, serves customers over a 50,000-square-mile area.
Utility officials contend that their solar customers enjoy the benefits of that network, whenever they need it. But they pay less to build and maintain it, shifting costs onto other ratepayers. Of course, the ratepayer did invest in his own infrastructure in order to provide electricity for his or her own use.

Pacific Gas and Electric, the northern California utility, counts 85,000 solar energy users among its 5 million electricity customers. Arizona Public Service, which has 18,000 rooftop solar systems among its 1.1 million electricity customers, estimates that solar homes each shift about $1,000 in costs annually to other ratepayers.

The number of homes with rooftop solar systems in the United States has grown to about 270,000, according to the SEIA. More than 80,000 solar systems were added last year. Homeowners are now able to lease panels from solar installation companies for 20 years.

The spread of such “distributed generation,” while limited now, holds enormous potential to upend the century-old system under which monopoly utilities provide power to everyone, in exchange for a rate of return guaranteed by regulators.

One possible alternative is to charge solar customers for the right to have the utility’s services available whenever they need it. That “standby charge” went into effect two years ago in Virginia, where just 833 of Dominion Virginia Power's 2.3 million customers take part in net metering and only five produce enough power to pay the charge.

“If you have a solar panel on your house and it’s cloudy for a week and it produces no electricity, those utility assets have to be paid for.  Of course, that customer is paying for it when he uses it. (Wash Post, 6/9/2013)