Americans are installing rooftop solar power systems at an unprecedented rate thanks to plunging panel prices and growing concerns about climate change. But not everyone can partake in the boom. In many states, unfavorable rules still make it too hard or expensive for homeowners and companies to go solar, stunting clean-energy growth in even the sunniest neighborhoods.
Solar advocates say the utilities are largely to blame for the mismatch in policies. Giant electricity companies see privately owned rooftop systems as a threat to their bottom lines, and they’re fighting through regulation and legislation to maintain market share, solar groups argue. Utilities say their only interest is ensuring electricity remains affordable and reliable for all of their customers, regardless of the power source.
The policy battles are intensifying as solar adoption climbs. Nearly 200,000 homes and businesses added rooftop or on-site solar installations in 2014, bringing the total count to more than 600,000 nationwide, according to the Solar Energy Industries Association and GTM Research. The market for solar photovoltaics is now worth more than $13 billion, up from just $3 billion six years ago.
The latest front in the solar fight is unfolding over “grid access fees,” which solar users must pay to the utility in exchange for hooking their systems to the main electric grid. “We’ve seen major increased interest by utilities” in this area, said Katie Ottenweller, who leads the Southern Environmental Law Center’s solar initiative in Atlanta. “We really see this as utilities effectively penalizing customers for buying less of the utility’s product.”
Arizona Public Service Co. (APS), the main utility in Arizona, last week asked state regulators to allow the company to raise monthly rooftop solar fees from about $5 to about $21. PNM, the largest electricity provider in New Mexico, has proposed a monthly fee of around $30. In Alabama and Virginia, utility customers already are paying similar amounts.
The utilities say the fees are a matter of fairness. Solar panel owners still depend on the grid to light their homes when the sun isn’t shining, and yet they’re not necessarily paying for that access. “If you don’t use the grid, you shouldn’t have to pay for it. But if you do, you should pay your fair share. And today, virtually everyone uses the grid,” Marc Romito, APS’ manager for renewable energy, said in a statement about the utility’s proposed fee hike.
Power companies also are pushing to limit “net metering” programs. Under these policies, solar users sell their excess electricity to the utility for a set fee, which allows customers to dramatically reduce their utility bills. In coal-rich West Virginia, Gov. Earl Ray Tomblin last month passed a bill to revise the state’s net metering rules, a move critics say will discourage future investment in rooftop solar power. Policymakers in Arizona, Florida and Washington also are considering capping the number or size of systems that can participate in net metering plans.
Solar advocates say the push to raise grid access fees or water down incentive programs ignores the economic benefits that rooftop systems supply to the grid. For instance, solar panels generate the most power in the middle of the day, when overall electricity demand is highest. By supplying more power to the system, solar systems take pressure off the grid and reduce the need for utilities to build additional power plants. In Maine, the value of solar power is estimated to be 33 cents per kilowatt-hour, in terms of avoided transmission and fuel costs and reduced greenhouse gas benefits, according to a recent study by clean energy group Acadia Center. A similar report on Connecticut valued solar power at 20 cents per kilowatt-hour in the state.
“It means when someone decides to use their own money to buy a solar system and put it on their roof to power their energy usage, that provides value not just for them but for their neighbors as well,” said Adam Browning, executive director of Vote Solar, an advocacy group in Oakland, California. Despite the benefits, “We’re seeing across the country a reaction of utilities to try to put up roadblocks and barriers to people generating their own power.”
A new report by the Florida Center for Investigative Reporting (FCIR) found evidence of such pushback in Florida, which is lagging other sun-soaked states in solar power development. Former legislators suggested that the political heft of large utilities has prevented policymakers from adopting rules that would encourage residents to install rooftop solar systems.
In Florida, as in other states, utilities hold a monopoly on supplying power under existing laws. Floridians can purchase their own arrays -- which cost between $15,000 and $30,000 -- but they can’t take advantage of the third-party lease programs that have exploded in states like California and New Jersey. Under those programs, companies such as SolarCity Corp. and SunEdison Inc. can install panels for free and sell the clean power to the homeowner at a rate lower than what utilities charge. They’re an attractive way for people to go solar without shelling out tens of thousands of dollars.
Solar proponents in Florida are proposing to change the state’s constitution to allow third-party solar sales in the state, and a ballot initiative may appear in the 2016 elections. But utilities are sure to fight the plan, including by making campaign donations to Florida state legislators. The state’s four largest power companies -- Duke Energy, Gulf Power, Florida Power & Light and Tampa Electric -- have together made $12 million in campaign donations since 2010, according to the FCIR report.
“We in Florida are stuck in the Stone Age,” state Rep. Dwight Dudley, a Democrat from St. Petersburg who supports the solar industry, told FCIR. He cited the utility campaign donations as a reason pro-solar bills have struggled in Florida.
A pro-solar bill in North Carolina already is facing resistance from Duke Energy after state Rep. John Szoka, a Republican, proposed the measure last week. The bill would allow third-party companies to lease panels and sell solar power in the state, which is prohibited under the state's existing monopoly laws. Duke says it’s not opposed to rooftop solar power -- it just wants a measure that covers reforms of the entire industry, and not only a single policy.
“What we’d like to see instead is a more collaborative and comprehensive approach on solar issues in North Carolina,” said Randy Wheeless, a spokesman for the Charlotte-based energy giant. “Dealing with one at a time is not as productive as getting them all on the table.”
He pointed to the solar policy recently approved in South Carolina, which will allow residents for the first time to lease solar panels from third parties, to sell solar power back to the utility under net metering and to avoid grid access fees, at least until the end of 2020, when the plan will be revisited. The state’s plan won’t allow private solar companies to sell power back to the grid, however, which is what policymakers are seeking in North Carolina. Wheeless also applauded a solar bill in Georgia, which cleared the state legislature last week and is headed for Gov. Nathan Deal's desk. The plan also enables customers to access third-party financing and earned the backing of free-market conservative groups opposed to the state's utility monopoly.
Wheeless said Duke will propose its own solar plan to North Carolina’s General Assembly, though the utility hasn’t yet determined when it will submit the report. In the meantime, the utility is expanding its own solar power portfolio, which now includes around 550 megawatts of large-scale projects. “We’ve been very busy with solar,” he said.