Solar Industry Responds to Attempted Crackdown by Utilities

As the penetration of distributed solar generation increases, the debate on utility policies and impacts is intensifying, concluded the authors of a new report, Ratemaking, Solar Value and Solar Net Energy Metering– A Primer, from the Solar Electric Power Association (SEPA). “Utilities in some regions have observed distributed solar adoption at rates not previously forecast and are now seeing significant amounts of grid-tied solar on their systems.”

The utility industry is starting to think about these disruptive changes. As a recent report from the Edison Electric Institute concluded, “disruptive forces, if not actively addressed, threaten the viability of old-line exposed industries.”

In the past, according to the EEI study, regulators managed rates to protect utilities. With the proliferation of distributed solar, it predicted, there will be pressure from utilities “to undo these cross subsidies.”

And that is happening, according to the SEPA primer. Utilities have recently proposed that solar customers pay network-use charges such as access fees, solar riders, or standby charges, to make up for reduced revenues.

Ratepayer and solar advocates have also weighed in. The challenge in finding an equitable alternative to NEM is in accurately assessing the benefits of solar to the system and the costs to non-solar owning ratepayers, according to SEPA. Both “quick fixes” and “targeted innovations” have been proposed.

There have also been efforts this year to undo net metering in Louisiana, Idaho and South Carolina. NEM cost-benefit studies and cost-of-service studies are being done in Arizona, California, Colorado, Michigan, Ohio, New York, Texas, Vermont and other states.

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