It is true that solar-system owners are being compensated at a higher rate than wholesale energy suppliers, but the energy is being consumed on site. This reduces the stress on the power lines during peak load and can reduce the need to upgrade or add capacity to the existing network.
Dec. 1, 2013 3:38 p.m. ET
In response to your Nov. 20 editorial “Arizona’s Solar Flare-Up”:
Rooftop solar power is never “export[ed] to the transmission grid.” The vast majority of power is consumed directly in the home and never touches the grid. The rest of the power goes to neighbors, using only the local distribution system. This saves utilities expensive transmission costs, which every calculation in the editorial ignores. Buying less power from utilities is good for everyone—except for monopolies that oppose competition.
Solar companies do not “pocket” net-metering savings. All net-metering credits go directly to homeowners.
While you defend the rights of the “poor,” even invoking food stamps in the name of class warfare, 57% of Arizona’s rooftop solar installations occur in areas that are at or below the state’s median income level.
Let’s be real about the phony cost-shift claims. Arizona Public Service’s initial proposal would have resulted only in APS pocketing more money. APS did not even suggest returning these solar taxes to nonsolar customers. Does that sound like a company concerned about costs shifts?
Regarding federal tax credits, we welcome a conversation on energy subsidies, which fossil and nuclear companies have received for decades. Given its crocodile tears about subsidies, surely APS will give up its blank-check bailout from U.S. taxpayers known as the Price-Anderson Act. This act requires taxpayers to bear the cost of large accidents at APS’s nuclear plant, which has one of the worst safety track records in the country.
We completely agree that the Arizona decision will deter other utilities. In state after state this year (Louisiana, Idaho, California and Arizona), policy makers have rejected attempts to change net metering. Instead, the states have said that if utilities don’t like rate structures, they should propose changes that apply to everyone, but not single out solar customers. The verdict of 2013 is that net metering is here to stay.
There are several reasons why net metering provides benefits not only to the solar-system owners but to their nonsolar neighbors as well. It is true that system owners are being compensated at a higher rate than wholesale energy suppliers, but the energy is being consumed on site. This reduces the stress on the power lines during peak load and can reduce the need to upgrade or add capacity to the existing network.
Spot energy prices change during the day as the load rises and falls. Solar power is being made during the most expensive hours when air conditioners are taxing the system.
It is true that third-party owners of solar systems take the subsidies that are available. Otherwise they could not offer these systems to homeowners for free while reducing their monthly energy costs. This is to give customers with little means the ability to participate in the savings.
Over time, the grid will only take so many solar projects before it creates technical issues for the utilities. I don’t know when saturation will occur, but it will happen and new solar installations will slack.
The real dodgers of the cost of electric service are those who use power during the peak time of day but pay the same rate as those who use power during the off-peak time. It is peak demand that drives the costs up for those fixed assets. Rates that hide the true costs of peak power to the entire rate class by averaging those on-peak costs with off-peak costs are designed precisely to allow utilities to keep building more fixed assets that are only utilized during the peak time of day. When utilities do provide price signals, the price of peak power is often quadruple the costs for off-peak power. Even electricity wholesale rates show this. Working the math shows that the rate dodge saves on-peak power users at least $1,000 in peak power charges annually.
Solar power generates energy during the peak time of day and so reduces the peak demand, meaning less fixed costs for all rate payers, not more. Net-metering proponents are only trying to level the playing field a little by at least giving customers who put solar on their roofs the same value for electricity that they pay during the rest of the day.
Thank you to the Wall Street Journal for publishing this letter. The original post can be found here. This news-worthy article shows how solar helps not only homeowners, but also local communities.