It’s time to combat utility opposition to solar – Policy

October 27, 2022

There are many examples of massive utilities utilizing their monopoly standing and wealth – the latter derived from income assured by state governments across the US – to attempt to block buyer entry to self-generation expertise.

For starters, in 2020 PG&E [Pacific Gas and Electric Company], SDG&E [San Diego Gas & Electric], and Southern California Edison between them pushed by a median $900 per yr tax on customers of photo voltaic and on power storage techniques. In making this proposal, the investor-owned utilities (IOUs) explicitly contemplated the necessity to tax self-consumption, together with non-exporting battery techniques, just because the patron would buy much less of the IOUs’ product.

If the IOUs didn’t maintain a monopoly over California’s electrical energy market, in the event that they weren’t assured a revenue by California regulators which amounted to greater than $48 billion in 2021, they’d haven’t any standing in demanding a tax on customers who use much less electrical energy. The thought is preposterous. However these three investor-owned utilities management 80% of California’s electrical energy market and, because of this, have undue affect over power coverage. They use their wealth and standing to affect policymakers, hiring PR corporations to push out faux math and false messages round fairness and ratepayer safety, they usually usually work to dam and sort out competitors within the market.

California isn’t alone on this dynamic. There different examples of monopoly utilities abusing their energy and standing all through the nation. A 2021 report, Blocking Rooftop Photo voltaic, by J David Lippeatt, Adrian Pforzheimer, Bryn Huxley-Reicher, and Bronte Payne of sustainability analysis physique the Frontier Group and the analysis and coverage heart of nonprofit Setting California, particulars greater than a dozen examples.

The report factors out how FP&L [Florida Power & Light], Duke Power, and Tampa Electrical Co used their energy within the state to dam pro-solar insurance policies that will allow customers to go photo voltaic. The utilities directed greater than $43 million to state-level political events, candidates and committees, together with the governor, over the 2014 to 2016 election cycles.

In one other instance, regarding a utility lively in 16 US states, Lippeatt et al write about how, in 2020, Dominion proposed a set of solar-only charges and costs designed to penalize photo voltaic customers, totaling $750 per yr.

After all, it’s not simply within the US that legacy energy corporations reap the benefits of their monopoly standing to hurt consumer-controlled era assets. In Australia, there was a proposal to cost photo voltaic customers for power exports whereas on the identical time not levying such a charge on different era assets.

California photo voltaic corporations are struggling underneath the uncertainty of state coverage making. The “NEM-3” continuing to change the state’s internet metering coverage was launched in August of 2020 – greater than two years in the past. Inventory costs have plummeted for publicly traded corporations because of the uncertainty. The state’s small, family-run companies – which make up 80% of the market – are being hit with an increasing number of purple tape whereas bracing for the damaging impacts of a yet-to-come NEM resolution.

Final December, the California Public Utilities Fee proposed a NEM-3 verdict that was almost as unhealthy as what was proposed by the utilities. It included an enormous month-to-month tax for photo voltaic households and a dramatic slashing of the credit score photo voltaic households get for energy they export to the grid. The proposal confronted a widespread public backlash and was instantly placed on maintain however a brand new resolution has but to be launched almost a yr later.

If California finally ends up with dramatic in a single day modifications to NEM, small photo voltaic corporations may merely exit of enterprise or go away the state as a result of the price of doing enterprise would go up simply as the worth of photo voltaic and power storage would fall. These PV companies, which quantity within the hundreds and make use of the vast majority of photo voltaic employees, have been dwelling with the coverage uncertainty for 2 years now. Simply how they fare within the months forward is as much as California governor Gavin Newsom and the insurance policies his administration adopts within the subsequent few weeks and months.

Client dilemma

On the finish of the day, nevertheless, it’s the shopper who loses probably the most. The California power shopper is paying extraordinarily excessive costs for electrical energy that’s more and more unreliable. When the California shopper makes an attempt to unravel this drawback by self-generation, they’re threatened with taxes and penalties. Nowhere is that this extra starkly illustrated than within the instance of a working class household dwelling in California’s Central Valley, the place summertime temperatures generally prime 105 F and air-con hundreds are excessive and costly. With the decline in photo voltaic pricing, these households are going photo voltaic in giant numbers, driving the expansion of recent adoption previously three years. The utilities’ proposed penalties and taxes would hit these customers the toughest as they’re the least capable of shoulder successful on the economics of going photo voltaic.

A utilitarian future?

Finally, the rise of consumer-based clear power applied sciences akin to photo voltaic and storage techniques doesn’t essentially imply the tip of the monopoly utility. Somebody must construct and preserve the roadways for electrons to journey on and the capability of the grid will develop as we electrify transportation. Nonetheless, we are able to cut back the quantity of grid growth with the construct out of distributed era, which might save everybody cash. The state’s monopoly utilities may not make as a lot cash underneath a high-electrification future with extra native era however they are going to nonetheless be very worthwhile. There isn’t a demise spiral for the California electrical utility.

The important thing to balancing all of the pursuits is to have a powerful watchdog company impartial of utility affect and held accountable by the customers it serves. To realize this, we should have an knowledgeable and engaged populace that has actual power choices and aggressive markets to maintain costs down. This has at all times been the balancing act in America. Time will inform whether or not California stays the incubator of innovation and shopper selection or if it falls again into the arms of the monopoly-utility previous to the detriment of photo voltaic business and shopper alike.

Bernadette Del Chiaro is government director of the California Photo voltaic & Storage Affiliation enterprise group. She is going to reasonable a chat on abuse of monopoly positions by utilities on the Empower 2022 digital summit organized by photo voltaic software program firm Aurora Photo voltaic on Nov 1-2.