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June 23, 2014S0lar USA
The fight between residential solar home owners and utilities is getting more intense and spread over more and more USA states every day. Utilities are fighting net metering tooth and nail in almost all states such as Wisconsin, Arizona, Utah etc. Utilities want the owners of solar panels to pay for using the transmission grid, while solar home owners want utilities to provide this service free as solar panels are expensive and help the environment. Net metering concept has been around for a while without utilities bothering about it too much, since solar array installation used to cost too much for it to be an option for home owners. But with the costs of solar panels plummeting and the federal government giving a 30% tax subsidy, a lot of house owners are putting up solar panels on their roofs.
This is disrupting and endangering the whole electricity utility model which depends on the sale of electricity. They get a fixed return on investment for the power plants and distribution grids that they invest in. But this model may not work as more and more customers opt to produce the electricity on their own. Some states such as Arizona have put $5 monthly fees, while Utah has imposed a $4.25 monthly fees. The solar energy helps defray costs by producing power during the peak demand hours of the day in the noon period. This helps reduce investments in peak power plants. They also say that they are helping the country meet its environment and global warming goals, as solar power plants are emission free compared to the gas and coal power plants which supply more than 65% of the country’s electricity.
We see more and more friction between customers and utilities as court cases multiply. But we ultimately see the utilities will lose as solar power costs reduce year by year, while fossil fuels are getting more and more expensive. Also the Obama administration is thinking of putting in stringent emission standards for power plants, which will make it expensive to run them. Climate change is working against the utilities and now investment banks such as Barclays are advising investors to stay away from utilities.