Rooftop solar debate
While Xcel is breaking new ground buying from centralized solar farms in Colorado, the company is less interested in buying solar-generated electricity from residential rooftops.
Xcel currently pays Colorado customers 10.5 cents per kilowatt-hour for feeding surplus solar power back into the grid but has proposed to slash the payment by more than half to 4.6 cents per kilowatt-hour.
Why? Xcel spokesperson Mark Stutz calls the difference of 5.9 cents a “hidden subsidy” paid by customers without rooftop solar to support those who do.
“If you put a 10-kilowatt system on your house, your system benefit to the utility, in our opinion, is about 4.6 cents,” says Stutz. He says the proposal doesn’t eliminate the 5.9-cent difference, just pushes to call it what it is. “We need to recognize there is a hidden incentive. The other side doesn’t want this to be recognized as an incentive.”
Adds Stutz: “We support solar. We’re just trying to support the right kind of solar – which is large, centralized solar. That’s where our customers get the most bang for the buck.”
Net metering isn’t an issue in Colorado alone, as many states are seeing similar pushes against net metering for distributed solar generation.
The so-called “bill mill” that is the American Legislative Exchange Council, or ALEC, has pushed legislation in more than 15 states that would dampen renewable mandates, and now has fired a new policy salvo against net metering. (Stutz says Xcel is not an ALEC member, but hedged on an outright denial that ALEC is financially supporting the company’s proposal to reduce net metering in Colorado.)
Critics argue the organization is fighting for the interests of a few fossil-fuel producers and utilities, rather than public good.
Arizona Public Service recently added a monthly fee to customers with rooftop solar of 70 cents per kilowatt-hour, which was substantially lower than the original proposal. Solar companies in Arizona accused the utility of trying to “tax the sun.”
A study commissioned by the San Francisco-based Vote Solar Initiative, a solar industry trade group, tabs the benefit to Xcel from net metering at $13 million in Colorado.
“That’s just the cost (Xcel) avoids when people deliver power back to the grid,” says Annie Lappé, solar policy director at the nonprofit’s Colorado office in Boulder.
Lappé calls Xcel’s study pegging the value of each kilowatt-hour at 4.6 cents “incomplete and flawed.”
“Our perspective is that net metering is a fair policy,” she says. “Xcel has put forward a study we feel significantly undervalues solar power.”
Lappé also quibbles with the notion that centralized utility-scale solar is more efficient than distributed rooftop solar. “We support the development of both utility-scale solar and rooftop solar. We disagree with the claim that utility-scale solar is much less expensive than rooftop solar,” she says.
“We’ve been involved in net-metering fights across the country,” she adds. Third-party studies “show net metering is fair compensation” and some commercial facilities with rooftop panels “should actually be getting more credit for it.”