Saturday, April 25, 2015

Who will profit from more rooftop solar?

The surprising answer: Arizona Public Service. You know, the same company that fights tooth and nail to penalize homeowners wanting to reduce their rates via solar. The same company that gets involved in the state politics of the Arizona Public Service Commission ... oops, I meant the Arizona Corporation Commission. Here are a few snippets expanding on the theme from the blog.

The background on APS's history opposing solar

APS is an unlikely solar patron: In the summer of 2013, the Phoenix-area utility launched a campaign to weaken Arizona's net metering rule, which requires utilities to buy the extra solar power their customers generate and provides a major incentive for homeowners to install rooftop panels. A few months later, APS admitted giving cash to two nonprofits that ran an anti-solar ad blitz in the state. Early this year, the Arizona Center for Investigative Reporting revealed that a letter criticizing the solar industry's business practices, sent by members of Congress to federal regulators, was originally authored by an employee of APS. And a couple weeks ago, APS asked state regulators to let the company quadruple the fees it tacks on to the monthly bills of solar-equipped homeowners.

The current push by APS to enter competition with private solar companies

In December, the Arizona Corporation Commission gave a green light to APS to plunk down $28.5 million on 10 megawatts of solar panels, enough to cover about 2,000 of its customers' roofs. (Tucson Electric Power, another utility in the state, was also approved for a smaller but similar plan.) The idea is that APS will target specific rooftops it wants to make use of—in areas where the grid needs more support, for example, or west-facing roofs, which produce the most power in the late afternoon, when demand is the highest. APS would offer homeowners a $30 credit on their monthly bill, according to Jeff Guldner, an APS vice president for public policy.

Free market competition and clean energy: who could ask for more?

... Nick Culver, the lead US solar analyst for Bloomberg New Energy Finance, thinks the trend is gaining traction and predicts that more utilities like APS will jump into the rooftop solar market.

"It's all about control," he said. Utilities "can justify it [to their shareholders] by saying we're going to profit from this, rather than waiting for other solar companies to take all of the market."

But independent solar companies and some regulators are concerned that letting big utilities into the rooftop solar market will unfairly squeeze out competition, hurt innovation, and ultimately stick customers with higher costs. The result, they argue, will be that fewer households end up choosing solar power.

"The utilities are using their vast economic resources to encourage people to go with them," said Gabe Elsner, executive director of the Energy & Policy Institute, a clean energy think tank in Washington, DC. "What we're seeing is a monopoly trying to retain its monopoly."

The issues raised by the entry of utilities into the solar market is more complicated than big companies vs. little people, so do read the motherjones article for more depth.

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