A Placemaking Journal

Household Solar Popularity Builds, As Does Utility Industry Discomfort

Kaid-BenfieldA couple of weeks ago, my wife Sharon and I were out for a long neighborhood walk. This is not unusual for us, but on this particular day we took a route we hadn’t walked in quite some time. I was pleased to notice that one of the traditional, colonial-style houses we encountered was sporting solar panels on its roof. And then we noticed another. And another. And yet more, so many that we lost count. Not every house, certainly, but enough in this particular section of northwest D.C. to make a strong impression.

I don’t think those panels were there the last time we walked the route, and it made me wonder whether there has been some leadership in the neighborhood, or perhaps a push by a local installer, one of which, Solar Solution, had a sign in front of one of the homes, making me think at least that particular installation was quite new.

But that wasn’t all. On another walk in a different part of the neighborhood, coming home from the gym, I took a shortcut through an alley and noticed yet another array of panels in the rear of one of the homes. I may be slow to catch on, but eventually I know a trend when I see one.

In fact, “US solar power grew by 6.2 gigawatts in 2014, a 30 percent increase over the previous year and representing nearly $18 billion in new investment,” according to data released last month by the Solar Energy Industries Association and GTM Research, reported by Daniel Cusick for ClimateWire and reprinted in Scientific American. A similar amount of growth is projected for 2015, adds Cusick, because of “falling costs for solar panels and modules, business model innovation that allows for more flexibility in ownership, favorable political and regulatory environments, and increased access to low-cost capital.” Solar accounted for nearly a third of the nation’s new generating capacity in 2014, more than either coal or wind (though less than natural gas).

The trend is definitely on the upswing. The nation’s market in photovoltaic panels has grown fourfold since 2009, even discounting concentrated solar facilities. “Residential PV continues to be the fastest-growing market segment in the US solar sector, riding three consecutive years of 50 percent or higher annual growth,” according to Cusick.

For example, Peter Murtha and his family reside in Silver Spring, Maryland, just north of the D.C. border. Murtha blogged about his experience with solar panels on the Washington Post website, recounting the benefits to a homeowner:

Being tied to the grid means that you in essence “sell” the power you produce to the utility — which is great when you are producing more power than you are using. It also permits you to generate renewable energy credits but means that in a power outage, you are “down” with everyone else on the block. Having a solar array also means having a special “smart meter” (supplied at no extra charge by the utility) which measures the amount of power you are producing and the amount your home is consuming, with the “net usage” reflected on the meter.

During times of year like the early fall, when you don’t need heat or air conditioning, on a sunny day the electrical meter runs backward, as your generation is greater than your demand!

Nearly half of Murtha’s electricity needs are met by the onsite solar generation, and he estimates that his entire net investment (after government tax credits and grants are considered) of around $24,000 will be recouped in about 10 years after his system went online in 2012. Murtha also estimates that, because the technology and installation have become more affordable, a consumer could probably buy a comparable system for 25 percent less today than he paid in 2012.

Public incentives for household solar installations include a 30-percent federal tax credit (due to expire at the end of 2016, unless extended), state credits and incentives (which vary but in Murtha’s case included a taxable $1,000 clean energy grant from Maryland) and tradable solar renewable energy credits available in states that require a certain portion of their overall energy portfolio to consist of renewables.

In addition, some consumers are choosing to lease rather than purchase their rooftop solar arrays, saving upfront costs in exchange for a long-term rental contract priced to still allow significant monthly and annual savings to the homeowners.

So this is all good news, right? Major reductions in carbon pollution, substantial monetary savings for consumers, and even a burgeoning industry employing well over 100,000 workers and growing at over 10 times the rate of the overall U.S. economy, according to the Solar Energy Industries Association. There’s something in it for the utilities, too, since reduced strain on the national electric grid means fewer blackouts and less need to invest in expensive power plants. Even the Christian Coalition of America has voiced strong support for continued incentives that favor solar.

Unfortunately, it seems that whenever there is progress, there’s opposition. Some fossil-fuel-based utilities are getting uptight about losing market share, according to an article written by Joby Warrick and published in the Washington Post. Determined to slow the growth of solar, the companies have persuaded authorities in Arizona and Wisconsin to slap a monthly surcharge on consumers for the practice of “net metering” described by Peter Murtha. They are targeting additional states, and Warrick reports that “in some states, industry officials have enlisted the help of minority groups in arguing that solar panels hurt the poor by driving up electricity rates for everyone else.”

That claim is vigorously disputed by analysts independent of the utilities, as well as by Denise Fairchild, the president and CEO of Emerald Cities Collaborative, a national nonprofit organization dedicated to climate-resilience strategies that produce environmental, economic and equity outcomes. Fairchild writes in Governing that, in fact, “the utility industry’s efforts to turn back the clean-energy revolution would block low-income communities from realizing the benefits.” The last thing minority communities of color need, argues Fairchild, is something that makes the shift to cleaner and more efficient technologies less affordable:

Net metering surcharges are also akin to restrictive covenants, which legally prohibited certain races from the benefits of living in American suburbs, locking African-Americans and other ethnic groups into urban ghettos. Surcharges similarly lock the poor and people of color out of the emerging clean-energy future, including not only cleaner, cheaper and newer energy options but also the “green” jobs that these new industries are creating.

Finally, imposing surcharges or eliminating net metering would solidify and accelerate wealth disparities. Net-metering policies generate wealth by turning property owners and communities into energy producers, offering a rare opportunity for residents of low-income communities to build personal wealth. Surcharges will only block poor families from owning their own energy assets.

The case in favor of charging customers even when they are not using utility-generated electricity seems to boil down to this: Because net-metering customers still must connect to the grid, some utilities argue, those customers should pay for the costs of maintaining the grid. I suppose that’s fair to a point, but the larger point is that it is grossly discriminatory and unfair — as well as counter to the public interest in reduced dependence on fossil fuels — to slap a special surcharge only on those customers who are using the grid the least.

The truth is that renewables such as solar represent the future. And so, importantly, does overall efficiency in electricity consumption, as we have already seen with advances in lighting, appliance and building technology. Utilities and their regulators should be looking forward, not backward, to find ways to invest in progress — and make money doing so — rather than trying desperately to cling to yesterday’s business model, which is based on encouraging more and more consumption of polluting sources of energy. (Last year there was at least one encouraging sign that some enlightened industry leaders are, in fact, interested in forward-looking partnerships.)

Nonetheless, Warrick’s article notes:

Legislation to make net metering illegal or more costly has been introduced in nearly two dozen state houses since 2013. Some of the proposals were virtual copies of model legislation drafted two years ago by the American Legislative Exchange Council, or ALEC, a nonprofit organization with financial ties to billionaire industrialists Charles and David Koch.

Most of the bills have failed — even in conservative states such as Utah and Indiana — which is one reason that in many states the utilities are now shifting their advocacy to the friendlier terrain of public utilities commissions.

Originally featured on the Huffington Post. Reprinted here with Kaid’s permission. Move your cursor over the images for credit information.

Kaid Benfield

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