Deal between competitors means stability for many considering installing solar panels
(KUTV) Utah's solar industry is booming. But as we have been reporting now for several years, that boom has left power companies and consumers who want to install solar panels at odds.
At the center of the fight is, what else, money. The parties all seems to have a different opinion about what ‘their power’ is worth. The friction has led to a ton of uncertainty in the industry, like making it tough to answer whether or not installing solar panels on your roof will take a couple of years to pay off as opposed to a couple of lifetimes.
For example, as Get Gephardt reported in 2015, Dale Ellsworth was fighting with his power company, SESD.
Ellsworth has solar panels. On a cloudy day, when the panels don't create enough power, Ellsworth buys some off the power grid. On sunny days, when the panels create more power than Ellsworth needs, the power company buys the extra off him -- but SESD pays Ellsworth about 60% less than what he is forced to pay.
Is that fair?
Ellsworth says, no. The installation which he thought would pay for itself in about 18 years could take 80 years or more, he said.
But SESD says running a power company costs a lot more than just the cost of creating power. A power company has to maintain its power lines as well as pay employees, for example. Those costs are passed on to customers in every watt SESD, and other power companies, sells. When people with solar panels sell power back to the grid at a dollar-for-dollar price, power customers who don’t have solar panels are forced to pay more than their fair share to offset the company’s maintenance costs.
Ellsworth’s is just one example of a problem that afflicts the entire industry, both in Utah and across the country, says Dr. Laura Nelson, Utah Governor Herbert’s energy advisor.
But now, much of the fighting between power companies and solar customers in Utah has been settled. She helped strike a deal between several Utah solar industry players and power providers, including Utah’s largest power provider, Rocky Mountain Power.
In the deal, the solar advocates agree the power company can charge a higher rate, but the power company agreed to charge a modestly higher-rate.
The exact numbers still have to be worked out by Utah’s Public Service Commission, but Dr. Nelson predicts it will be only about 5-10 percent more.
She says this is a great example of groups on differing sides all giving a little bit to find a common ground, one that in this case will promote the "advancement of sustainable rooftop solar energy in Utah."
“I would say that the solar industry isn't entirely happy with the agreement. Advocates aren't entirely happy with the agreement. The utility may not be entirely happy with the agreement. But I think that everybody would agree that it's better than what might have been released otherwise,” she said.
Dr. Nelson says the agreement will provide “certainty” to all interest parties about how the industry will operate going forward.
Helping bridge the divide: A state study found that Dr. Nelson says, indeed, showed there is inequity when a person with solar panels is allowed to sell power back to the grid at the same rate at which he or she buys it from the power company - and it’s a cost that is deferred to other, non-solar customers.
“In this process, Rocky Mountain Power's guiding principle has been that rooftop solar customers should not be subsidized by our other customers,” said Cindy Crane, President and CEO of Rocky Mountain Power. “While no compromise is perfect, this settlement sets in motion a process to do just that. Subsidies will continue for a transition period until a new market-based solution is established that balances the interests of all customers, whether they choose to install solar panels or not.”
Ryan Evans, president of the Utah Solar Energy Association, says, “This compromise maintains solar as an affordable and secure investment, encourages self reliance and promotes choice in our energy market.”
“Throughout this process, the Utah Solar Energy Association had two clear priorities: to keep rooftop solar affordable for Utahns and preserve the 4,400 jobs the solar industry has created,” he said.
Not all customers will benefit from this compromise. For example SESD was not a part of the agreement, so their customers still only get paid about 40 cents on the dollar for energy he provide to the grid.
Still, Tuesday, a SESD spokesperson said the company is watching the deal closely to see how it works and could be open to entering a similar agreement down the road.