Bad actors in the solar industry are making it harder for residents of New Mexico to use solar power on their homes. The state’s Attorney General has filed 17 civil complaints against Vivint Solar including fraud, racketeering and unfair business practices. Cracking down on bad actors sends a message to the industry to clean up its act.
It’s time for solar to clean up its act
By Daniel Stevens / Executive Director, Campaign for Accountability
Wednesday, March 21st, 2018
Last week, New Mexico Attorney General Hector Balderas filed a 17-count civil complaint against Utah-based Vivint Solar. Included in the litany of charges against the company – which sells and leases rooftop solar panels in New Mexico and other states – were fraud, racketeering and unfair business practices.
Regrettably, irresponsible and even criminal actions by some in the rooftop solar industry could deter consumers from moving toward solar energy and away from fossil fuels as part of the effort to slow the pace of climate change.
As residents of the “Land of Enchantment” know, New Mexico has the good fortune to be one of the sunniest states in America. Consistent sunshine and favorable public policy are helping fuel the state’s huge boom in rooftop solar. Not only can solar power be good for the environment, but it can also boost New Mexico’s economy. According to The Solar Foundation’s recently released Solar Jobs Census, employment in New Mexico’s solar industry increased an incredible 48 percent in 2017. In short, the rooftop solar industry is doing well in New Mexico.
Nevertheless, as more door-to-door salesmen pitch rooftop solar, it is important for consumers to be aware of the risks. For more than a year now, my organization, Campaign for Accountability, has been documenting how some rooftop solar companies exploit vulnerable consumers. In December, we released a report detailing our analysis of thousands of complaints from across the country. We found that some rooftop solar companies have misled consumers about the true costs of installing solar panels, have poorly installed panels damaging homeowners’ roofs, and left many with long, expensive leases and higher monthly utility bills, rather than the reduced rates promised.
CfA’s research reveals that two of the worst offenders are SolarCity, now owned by the car company Tesla, and Vivint. Together, these two companies were the focus of more than half of all the rooftop solar complaints received by the Federal Trade Commission (FTC) between 2012 and 2016. The Better Business Bureau (BBB), which has not accredited Vivint, also has received hundreds of complaints against the companies.
Last year, New Mexico joined Florida, Nevada and California in requiring solar companies to disclose costs and other critical contract details to potential customers. This is an important step to limit some of the most predatory practices, but our investigation suggests more needs to be done to protect consumers.
AG Balderas’ findings mirror our own. For example, his complaint alleges that Vivint has bound New Mexico consumers into 20-year contracts that require them to purchase the electricity generated by their rooftop solar system at rates that increase by more than 72 percent over the course of the contract. And it’s not just a few bad actors. He found that Vivint’s sales model systematically requires salespeople to falsely tell customers that if they sell their homes, the company will remove the solar system at no cost and cancel the contract (they won’t), and to use high-pressure techniques to coerce customers into signing contracts without carefully reading them. Also troubling, he found Vivint’s actions sometimes cloud homeowners’ title, making it difficult for people to sell their homes.
The attorney general’s lawsuit should force rooftop solar companies operating in New Mexico to clean up their acts, but it remains to be seen whether other states will follow New Mexico’s lead.
Until the industry cleans up its act, government regulators must work to ensure that consumers are protected from the clearly shady business practices in which Vivint has engaged. The industry as a whole needs to self-police and rid itself of bad actors to ensure that consumers don’t lose faith and walk away from this important source of clean energy. After all, the proliferation of solar panels across New Mexico and the nation can protect the environment and create economic opportunity.
Campaign for Accountability is a government and business watchdog.
New Mexico Attorney General, Hector Balder has filed a 17-count civil complaint on Vivint Solar including allegations of unfair business practice, fraud, and racketeering. These allegations are not an uncommon trend among solar installers. Typically targeting elderly men and women using high-pressure sale techniques providing misleading information on monthly billing rates. Make Solar Safe will continue to provide updates regarding fraudulent solar companies in order to protect consumer safety.
New Mexico A.G. files fraud, racketeering suit against Vivint Solar
By Art Raymond
SALT LAKE CITY — Utah’s Vivint Solar is named in a 17-count civil complaint, filed Thursday by New Mexico Attorney General Hector Balderas, that includes allegations of unfair business practices, fraud and racketeering.
In a release, Balderas said an investigation conducted by his office uncovered evidence that Vivint’s actions in New Mexico have led to “hundreds of clouded titles” to residents’ homes, that the company employs “high-pressure sales techniques and procedures designed to mislead consumers” and binds customers into 20-year contracts under which rates increase “by over 72 percent” over the life of the agreement.
“I will fight to protect the rights of all New Mexico consumers and hold giant, out-of-state corporations accountable who abuse, mislead and employ dishonest practices to defraud our hardworking families,” Balderas said. “Every New Mexican deserves access to clean, affordable energy, and the development and expansion of rooftop solar should be encouraged by businesses that use the industry’s best practices to help consumers become more energy independent.”
In a statement issued Friday afternoon, Vivint Solar disputed characterizations made in Balderas’ press release.
“Much of the interest in this lawsuit has been driven by this press release that not only misrepresents Vivint Solar’s dealings with consumers in the state, but also does not accurately describe the attorney general’s own allegations in the disputed lawsuit,” the statem
ent read. “It was also issued before the lawsuit was filed, giving Vivint Solar little opportunity to respond.”
The statement goes on to say that the company intends to address all the issues in court, but sought to clarify how their contracts with customers, called purchase power agreements, actually work.
“To be clear, Vivint Solar does not, has not, will not and cannot ever jeopardize its customers’ home ownership,” the statement reads. “Vivint Solar does not take a lien on its customers’ homes under its purchase power agreements or solar system lease agreements. A (purchase power agreement) is commonly used throughout the residential solar industry as a means of providing consumers with access to clean, affordable energy with no upfront investment by the customer; in exchange, the customer agrees to pay for all energy produced by the solar energy system.”
In an op-ed published in December by The Hill, Daniel Stevens, executive director of the nonprofit watchdog group Campaign for Accountability, wrote that Vivint and Elon Musk-owned competitor SolarCity account for the majority of complaints filed about solar companies with the Federal Trade Commission.
“First among the companies receiving high numbers of customer complaints, two companies in particular stand out: Vivint and SolarCity,” Stevens wrote. “Complaints against these two — among the largest providers — constituted nearly 56 percent of all the complaints filed with the Federal Trade Commission about solar companies. Among other things, consumers reported being tricked into buying or leasing solar panels and ending up with increased, rather than lower, utility bills.”
In an interview Friday, Stevens said his organization has gathered solar company consumer complaint data from multiple states and has previously requested investigations, based on evidence of “false and misleading actions,” by the attorneys general of California, Florida, Oregon and Texas. Stevens said he was “not surprised” by the allegations leveled against Vivint Solar in Balderas’ filing.
“Our initial focus was just looking at contract-related issues,” Stevens said. “But what we found was the complaints were much more widespread.”
According to a spokesman for Balderas, the New Mexico Attorney General’s Office had received seven complaints since 2016 about Vivint Solar. He also noted some early complaints went through an informal resolution process under the state’s Consumer and Family Services Division.
Vivint Solar was founded as an offshoot of Vivint, now Vivint Smart Home, in 2011 and became a publicly traded company in 2014. Both companies have their roots in APX Alarm Systems, a company co-founded in 1999 by former BYU student Todd Pedersen.
Shares in Vivint Solar peaked at $15.85 per share in July 2015 but declined sharply in the year following, dropping as low as $2.24 a share in May 2016. On Friday, Vivint Solar stock closed at $3.25 a share for a market capitalization of about $373 million.
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Recent expansion of solar power users has increased utility bills for non-solar users, but Vermont is taking steps to stop these increases. Even with the expansion of solar in the state, utilities are still seeing increased costs to produce and distribute electricity to customers, but fewer customers are paying for the services, even though all users are benefitting from the service. The changes to net-metering by the legislature will help all energy users in Vermont.
Net-metering takes its toll on Vermont
The explosion of net-metered solar power in Vermont has sparked a lively debate in renewable energy circles, putting the future of solar under the microscope and pitting some renewable energy advocates and developers against the state’s Public Utility Commission and power companies.
Caught in the middle are Vermont ratepayers who, critics maintain, have subsidized the rapid expansion of net-metered customers, including some who generate so much excess solar power that they actually pay nothing for electricity.
“We have a broad ratepayer concern,” said Riley Allen, deputy commissioner of the Department of Public Service, speaking recently about a new rule, referred to as “Net-metering 2.0,” designed to make the rate structure more equitable.
The Public Utility Commission recently issued new net-metering rules for Vermont that has left some solar developers squawking — especially those putting up systems beyond the homeowner scale.
A look back
Net-metering has been around nationally since the late 1970s.
The premise is simple: A homeowner or business has solar panels installed, connects them to the grid, and any excess power generated by the panels is sold to a local utility at a fixed cost, offsetting the power the homeowner or business has used and lowering their monthly power bill or, in many cases, zeroing it out entirely.
And it has been successful in Vermont, creating a boom in solar projects over the last few years.
In terms of the number of permits issued, most of the net-metering program in Vermont is made up of small-scale systems under 15 kilowatts, which you see often on houses or in yards. By capacity, however, more than 80 percent of the net-metering program in Vermont is made up of the largest category of systems — those that generate between 150 and 500 kW, much like the rows of panels you see today in fields.
Next month, net-metering in Vermont turns 20.
What started originally as a small-scale effort to encourage homeowners and farms to produce at least some of their own electricity from a renewable source has become the yardstick by which Vermont now measures the health of its solar industry.
Technically, net-metering can be applied to several types of renewable energy generation: methane, hydro, wind or solar. In any case, a homeowner or business can have a system installed, tie it to the grid and the power generated will offset the power they’ve used.
But solar is by far the most utilized in Vermont.
Under state law, a homeowner’s utility has to pay a certain rate for the excess power that is fed back to the grid. Typically that rate, about 20 cents per kilowatt, was more than or close to the retail rate most Vermonters pay for power. Before its growth spurt over the last few years, net-metering was a boon to customers and utilities alike.
In fact, the energy generated by net-metered solar lowered the demand for power during peak loads, which reduced capacity and transmission charges. This was true for both the state and New England electric systems.
The unprecedented growth of solar projects and the net-metering program in the last few years — a pace unforeseen by legislators and regulators alike — has actually diminished the overall value solar provides to utilities and their customers.
“Statewide, the solar industry in Vermont has seen a pretty dramatic reduction in the amount of solar being permitted and installed, on the order of magnitude of 50 percent drop in 2017 compared to 2016,” said SunCommon’s James Moore. “The vast majority of that reduction came in those larger (150 to 500 kW) projects. There are many fewer of those happening in Vermont.”
But SunCommon, the largest Vermont-based solar company, has remained fairly insulated from any downturn. That is due in part to its size, but also to a clear focus on small projects of 15 kW or less.
“Our focus has been helping Vermonters and small businesses go solar,” said Moore.
“We employ more than 100 Vermonters here at SunCommon and all of those folks are focused on helping households and small businesses invest in our clean energy future and do their part to address climate change.”
Without Net Metering 2.0, Moore said he believes 2017 could have been an even bigger year for solar than 2016, but the Department of Public Service maintains that a balance needed to be struck.
“We believe in the sector and its part in our long-term renewable energy future, but we want to see it developed in a way that is sustainable, and can be well-absorbed into the system; not just from a grid integration standpoint, but also in fairness to other ratepayers that aren’t participating,” Allen said.
“While we hope to foster the development of a robust distributed-resource environment for independent developers, we are also mindful of the impact and implications for the broader base of ratepayers that are potentially impacted by the pace with which we pursue those ambitions,” Allen said.
Vermont depends on the largely natural gas-powered regional grid for roughly two-thirds of its power needs and by lowering the demand for power during peak load times, the costs associated with the regional grid were lower, as well.
But over the last several years, solar has penetrated the energy market so extensively that peak loads have shifted toward the end of the day, and in some instances, after dark, when solar panels are no longer converting sunlight into electricity and no longer helping power companies lower their costs.
But utilities are now paying premium retail rates for the ever-expanding net-metered solar being generated in Vermont, and they are not seeing the reduction in capacity, transmission and regional grid costs they once did.
Non-solar ratepayers have been feeling that upward rate pressure as a result. Green Mountain Power cited net-metering costs as one of the reasons for its 5 percent rate increase this year.
According to its 2016 report, the Public Service Board conservatively estimated that net-metered solar power costs Vermont ratepayers $21 million a year more than if that power was bought elsewhere. In fact, a larger solar project that doesn’t qualify for net-metering is actually cheaper per kilowatt than a net-metered project. A moderately sized solar plant under the standard-offer program would cost ratepayers 7 cents to 9 cents less per kilowatt hour generated.
“The net-metering program is intended to offer utility customers financial incentives to develop new, small-scale renewable energy resources,” the report explains. “Renewable energy acquired through the net-metering program costs more than alternative sources of renewable energy.”
That’s a costly gap, solar watchers caution.
“Therefore, the net-metering program has an important, but limited, role to play in realizing the state’s renewable energy goals,” the report goes on. “Large customers should not be permitted to leverage the incentives offered by the net-metering program to deploy fleets of net-metering systems to offset their own significant power costs at the expense of other rate payers.”
Need for change
That’s where Net-Metering 2.0 comes in.
Net-Metering 2.0 lowers the rates power companies will be required to pay for new net-metered customers by roughly one to two cents per kilowatt hour for smaller systems, and closer to three to five cents for larger systems. The rate is tied to a system’s size and siting.
It also tightens loopholes on charges that net-metered customers were not paying, making it more equitable.
Several charges on a power bill are not related to the number of kilowatt hours used by a customer on a monthly basis. For instance, there are charges for “customer service,” “energy efficiency” and an “electric assistance” charge. With the rapid development of net-metered solar projects in the state, utilities were seeing the pool of customers paying those charges dwindling.
The new net-metering rule redefines those excess monthly charges as “non-bypassable,” meaning net-metering credits can’t be used to pay for those line items on a power bill — closing a loophole and preventing that pool from shrinking further.
Critics argue the rule change followed heavy lobbying of the Legislature by utility companies unhappy at the loss of revenue from net-metering. It has also raised questions about the commitment of Gov. Phil Scott to renewable solar energy programs that help combat climate change, meet Vermont’s goal to be 90 percent carbon-free in energy use by 2050, and create high-paying jobs.
Entrepreneur companies — like All Earth Renewables — argue the rule change discourages new investment in the solar industry, with some prominent players planning to leave the state. That affects development of larger projects.
Public officials involved in the energy and utility sectors said the Legislature tried to strike a balance between the need for renewable energy and savings for consumers, versus the impact on power companies that have to maintain the transmission lines and earn a reasonable rate on their investment.
Allen noted that Green Mountain Power serves 77 percent of the Vermont electricity load and reports that it is 60 percent reliant on renewable energy and 90 percent carbon free. Two of the next three largest utilities, Washington Electric Cooperative and Burlington Electric Department, report that they are 100 percent renewable, he said.
As rooftop solar becomes more popular around the world, fires become increasingly more common. In Telina, a solar fire erupted from problems with the DC isolator switch. This has become such a problem that the county fire department has recalled DC isolators. Make Solar Safe approves of fire safety protocols for consumer safety.
Solar panel catches fire on Gladstone rooftop
By Andrew Thorpe and Matt taylor
FIREFIGHTERS have extinguished a fire on the roof of a two-storey Telina home after a solar panel ignited earlier this afternoon.
Two crews were sent to the Venus St home after a passer-by noticed flames coming from the roof shortly before 1.30pm and called emergency services.
Firefighters were able to extinguish the blaze shortly after setting up a command post outside the house.
The house was occupied at the time of the fire, but the people inside were on the downstairs level and were able to leave the building without being injured – though paramedics were available at the scene.
Venus St was briefly closed off by police as firefighters and Ergon Energy crews worked to disconnect power from the damaged solar panel.
QFES station officer Graham Smith said they were now waiting for a solar-qualified electrician to come out to the property and inspect the panel.
“He’ll most likely lift the roof-sheeting to make sure there’s no extension of fire in the roof,” he said.
Mr Smith said an isolator switch inside the solar panel appeared to have been the cause of the blaze.
“(Solar panel fires are) not a common problem, but there has been instances of some installations that have recalls associated with the DC current isolator switches, and it appears that the fire has started in one of these,” he said.
“If (members of the public) have a solar installation, particularly an older one, legislation now requires that they have an isolator – however there is a recall on some of the DC isolators and that information is available on the Electrical Safety Office’s website.
Mr Smith also praised the actions of those inside the house, who met on the street afterwards and informed firefighters everyone had left the building.
“It looked like (their evacuation plan) was well-practised,” he said.
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“The costs of net metering … are borne by all electric customers, whether or not they receive net metering credits. Consequently, there is a transfer of costs rooted in the net metering system.” Massachusetts energy regulators determined that the cost of net-metering increases the cost of electricity on all residents. This change marks a growing trend across the country to change harmful net-metering practices.
Massachusetts approves new demand charge for Eversource’s net metering customers
Demand charges are very controversial among renewables and clean energy advocates, and Massachusetts’ decision has set the stage for intense debate over rate design.
“Massachusetts needs to step up its game and embrace smarter electricity rates and more customer control,” Daniel Sosland, president of Acadia Center, said in a statement. He said eliminating optional residential time-of-use rates and approving demand charges shows the state “is moving backwards instead of forward.”
Eversource, however, argued it faces “displaced distribution revenues” of more than $8 million annually that should be collected from net-metered customers. The DPU agreed, saying “the companies have demonstrated a cost shift from net metering to non-net metering customers by identifying costs directly imposed by net metering facilities on the distribution system.”
“The costs of net metering … are borne by all electric customers, whether or not they receive net metering credits,” regulators concluded in their order. “Consequently, there is a transfer of costs rooted in the net metering system.”
The Acadia Center was critical of both the decision to eliminate optional time-of-use rates as well as the imposition of demand charges.
“Given the lack of sophisticated metering in Massachusetts, there is no way for consumers to know what time this peak occurred and what actions could be taken to manage these charges,” the group said. “As a result, consumers will be paying the highest possible rate for this charge without being provided the information needed to understand the cause of these costs.”
Acadia added that because an individual’s peak usage doesn’t necessarily align with the system’s overall peak, “consumers are not being provided incentives to reduce energy usage in a way that could benefit the whole electricity system.”
Demand charges typically bill consumers for the period of their highest usage — typically monthly. Normally found in the C&I sector, utilities have started proposed demand charges for residential customers, particularly solar. But most of those proposals were rejected, until now.
In November of last year, regulators decided the initial phase of the case, but that result did not please Eversource. The DPU’s approved a $12.3 million increase for NSTAR, about 78% lower than the utility requested. For WMECo, regulators approved a $24.1 million increase, about 30% lower than requested.
Following that decision, an Eversource spokeswoman said the utility was “disappointed with the deep cuts the DPU made to our rate request because we feel we provided sufficient and detailed documentation to support the total increase we requested.”
The order also included $45 million in investments in electric vehicle infrastructure, and authorized up to a $15 million investment to construct a 5 MW energy storage facility on Martha’s Vineyard, and up to $40 million to construct a 12 MW energy storage facility on Cape Cod.
Full post at: https://www.utilitydive.com/news/massachusetts-approves-new-demand-charge-for-eversources-net-metering-cust/514477/
Former Mayor and current Mayoral candidate Horace Feliu has come out against South Miami’s recent solar power mandate on new homes and certain expansions or additions to homes. “Government should not be mandating non-safety related initiatives to residents”
City of South Miami Mayoral Candidate Horace Feliu Goes on the Record about Mandated Solar Panels
Going green is a noble cause but not without its challenges. Just ask Horace Feliu who actually created the first Green Task Force in the City of South Miami in2009 when he was serving as Mayor. The role of the Green Task Force is to provide the South Miami City Commission with suggestions on integrating Green and LEED certified designs in both residential and commercial buildings. Their goal, which is still in effect, is to promote initiatives that would reduce the city’s carbon footprint.
Going green is getting more and more into focus as of late. Residents of the City of Miami just this month voted to tax themselves in order to create a half a billion-dollar bond that was specifically about curbing the effects of climate change. In a city that is as resistant to taxes as it is susceptible to that very climate change, that vote underscores the importance of municipalities putting a concentrated and strategic focus on evolving into greener cities.
The City of South Miami, however, has overstepped normal governmental authority boundaries by mandating that homeowners install solar panels when building new homes or when making improvements or additions to existing homes. Homeowners alone would have to bear the cost of installation, maintenance and increases in their homeowner’s insurance. Homeowners would also be exposed to what many consider to be government sponsored predatory lenders as a way to fund the addition of the solar panels.
“The role of government in ‘going green’ should be in informing residents of the latest advancements in efficiency and design so they are aware of options that would reduce the carbon footprint,” said Horace Feliu, former mayor and current mayoral candidate of City of South Miami. “Government should not be mandating non-safety related initiatives to residents but rather providing incentives and waiving fees to promote change. Building affordable homes is a concern since this new mandate will increase costs and keep many potential homeowners out of the market.”
The mandating of solar panels has been a hot topic issue with many South Miami residents. For many older residents the expected 25 years to break even on the investment is simply not worth the cost, especially given that the systems only have an expected life span of 30 years. Older homes, which are slated for demolition and reconstruction, have also lost the value of replacement with the mandated solar array.
Feliu has thrown his hat into the Mayoral Ring once again for this and several other reasons that have him concerned as a long time resident of the city. While he believes that the city of South Miami must reduce its carbon footprint, he believes in enabling not dictating to citizens with ways to go green.
“After 3 very successful terms as the Mayor of City of South Miami I think there is a ton of work that I began that I am looking forward to continuing in the correct manner, such as the green imitative,” said Feliu. “This is something that will be important not just for me and my children but for my grandchildren and my great grandchildren if handled correctly and judiciously.”
Solar energy is a particularly important tool for addressing the global climate challenge, while helping to meet a massive increase in future electricity demand, according to a comprehensive report released today by the MIT Energy Initiative.
But while solar costs have fallen dramatically in recent years, MIT researchers warned that continued rapid growth in solar is not an inevitability.
One of the recommendations included in the 332-page report is for the United States to move away from net metering policies for distributed solar — contrary to what many solar advocates would say.
“I think we’ve got to find a better way to do it, because I think net metering is going to result in a pushback against residential solar,” said Richard Schmalensee, economics professor at MIT’s Sloan School of Management, on the sidelines of the report launch in Washington, D.C.
“We’re not anti-residential, because some people love the thought of solar on their roof, and if you’re going to subsidize solar, there’s no reason not to subsidize them,” he added. “But there’s no reason to excessively subsidize them, or to subsidize them in a way, as net metering does, that’s going to produce a pushback.”
Net metering compensates distributed solar generators at the retail price for electricity they supply to the grid, rather than at the wholesale price received by grid-scale generators. This gives an extra incentive to distributed solar customers by reducing their contribution to covering distribution costs, while shifting those distribution costs onto utility customers who don’t have solar.
Because cost-shifting has become so controversial in certain states, Schmalensee said it’s in solar’s “best interest” to do away with retail pricing in net metering policies, and to treat utility- and residential-scale solar “more or less the same.”
Several other reports have come to a similar conclusion, such as a recent reportcommissioned by the Louisiana Public Service Commission that drew ire from solar advocates. However, several more studies (including in Nevada, Vermontand Mississippi) have found just the opposite: that distributed solar does not impose a significant net cost to ratepayers, and in many cases produces a net benefit to all ratepayers.
Some of the benefits listed in a 2013 study, commissioned by the Solar Energy Industries Association, were that distributed solar allows for reduced investments in transmission and distribution infrastructure and deferred investments in expensive and polluting conventional power plants, as well as providing an affordable way to meet state renewable energy mandates.
Schmalensee countered these claims. He acknowledged that distributed solar could save on transmission costs in some locations. But, in general, he found that distribution costs would go up because of the technical upgrades needed to accommodate two-way power flow.
Also, he said it’s true that distributed solar could reduce the need to build new, expensive thermal power plants, but so could utility-scale solar and energy efficiency. So there’s no justification for giving residential solar preferential treatment, he said.
On cost, the MIT study found that utility-scale solar is inherently less expensive than residential-scale, and is likely to remain less expensive despite foreseeable cost reductions in residential. Therefore, utility-owned projects are a more affordable pathway to meeting renewable energy requirements.
“Residential solar doesn’t have greater external benefits; it has greater external costs,” said Schmalensee.
But according to Ken Johnson, vice president of communications for the Solar Energy Industries Association, the MIT report paints an “incomplete and flawed picture of solar economics.” It largely ignores commercial and industrial rooftop solar, he said, which often have cost structures similar to those of utility-scale solar, but without some of the complexity of ground-mount systems.
“The cost differences between rooftop and utility-scale solar are based, in large part, on inflated soft costs,” Johnson added. “We’re working hard to change that. Through improved public policies, such as cutting red tape and streamlining permitting and interconnection processes, soft costs could be lowered dramatically in the future.”
Keep the ITC and get rid of the state RPS
While the MIT report took issue with incentives for residential solar in terms of the way most net metering policies are structured today, the authors called for continued government incentives for solar power overall.
Letting the federal Investment Tax Credit (ITC) expire at the end of 2016 would be “unwise,” because it could lead to a sharp drop in solar deployment, according to Schmalensee. But the ITC’s focus on subsidizing solar investments, as opposed to solar power generation, is misguided, he said.
And the ITC isn’t alone. There’s a long list of solar subsidies in the U.S., such as state tax credits and property tax exemptions, that need to be redesigned to reward solar output, in his view.
“If we’re about solar generation, we should subsidize solar generation,” said Schmalensee.
MIT economists also made a case for bringing state renewable energy standards under a unified national program, which they said would reduce costs by allowing for unrestricted interstate trading of renewable energy credits. This approach would also maximize the value of solar, by directing investments toward sunnier places.
Finally, in terms of the technical advances needed to realize increasing solar adoption, the report recommended that the federal government concentrate its research and development dollars in emerging thin-film technologies, rather than continue to support crystalline silicon technology (c-Si), which is currently dominating the the solar energy market.
Now that c-Si modules and their component cells and input materials have reached scale, there’s an incentive for the private sector to make the technology more competitive. As a result, there’s a weak case for continued government support in current c-Si technology, according to MIT.
Thin-film technologies — so long as they’re made from earth-abundant materials — have several advantages over c-Si systems: they’re lighter, have lower manufacturing complexity, and are capable of being installed in flexible formats. These attributes offer the promise of reduced balance-of-system costs, which today make up the majority of overall solar deployment costs. But to realize these savings, emerging thin-film technologies need to become much more mature.
“Therefore, to increase the contribution of solar energy to long-term climate change mitigation, we strongly recommend that a large fraction of federal resources available for solar research and development focus on environmentally benign, emerging thin-film technologies that are based on earth-abundant materials,” the authors concluded.
View original article here.
Net metering at retail rates forces non-solar customers to pay for the upkeep of the power grid. Is it fair for non-solar customers to be saddled with this massive cost while solar customers benefit? Utah recently decided to change its net metering policy to make it fair for both solar and non-solar customers.
Should you be forced to subsidize your neighbor’s solar panels?
Should Utahns who don’t want or cannot afford to install solar panels on their home be forced to pay for those who can? That’s the crux of the current net-metering debate in our state.
Net metering allows solar customers to sell excess electricity generated by their rooftop panels back to the utility companies.
A study last year found that solar customers, who rely on and use the electrical grid as much as traditional customers, are not paying their fair share for its use.
What’s more, under the current net-metering arrangement, Rocky Mountain Power, Utah’s electric utility company, pays three times more for energy generated by residential solar panels than it pays for energy generated by commercial solar farms.
As a result, solar customers essentially receive a $400 subsidy every year, which amounts to a $6.5 million cost to the utility company. If things don’t change, as more people install solar panels on their homes, that number could skyrocket to $78 million.
This is bad news for non-solar customers who will foot the bill when Rocky Mountain Power increases prices to cover these losses.
The situation is particularly urgent for low-income households that spend an ever-growing portion of their income on electricity and suffer greatly from higher energy prices. For the 198,000 Utah households that earn less than $30,000, 18 percent of their monthly budget is already swallowed up by energy costs.
What’s worse, a rate increase doesn’t just mean higher utility bills, it also means higher costs for everything else. Local grocery stores forced to pay higher energy rates to light their stores and refrigerate food will likely pass on that cost in the form of higher prices. For families struggling to make ends meet from one month to the next, increased electricity costs could be catastrophic.
And when you consider that more than 60 percent of the state’s 22,000 rooftop solar owners earn more than $100,000 per year, it’s easy to see that the current rate structure is a patently unfair transfer of wealth from less fortunate consumers who can’t afford solar panels to the more well-off Utahns who can.
To level the playing field for all Utahns and protect the more vulnerable in our community, Rocky Mountain Power submitted a request to the Utah Public Service Commission to create a fairer rate structure.
Of course, solar companies that care only about protecting their customers’ lucrative subsidy are attempting to block the correction.
They argue that many customers who choose solar to save money on their electric bills will be disinclined to do so if the new prices requested by Rocky Mountain Power go into effect. And they disingenuously claim that fixing the rate disparity is meant to stifle competition and will kill jobs and harm a “thriving” industry.
But they fail to recognize that cheaper energy prices make Utah a desirable locale for businesses. Utah enjoys some of the lowest energy prices in the country, close to 20 percent lower than the national average. A potential rate increase to cover the ballooning costs of net metering could jeopardize our state’s ability to attract and retain businesses and jobs across all industries.
Moreover, if the solar industry is propped up with forced subsidies from people who cannot afford the product or simply don’t want it, is it really thriving?
The Utah Public Service Commission must eliminate the unfair subsidy for rooftop solar users. For their part, instead of relying on an artificial boost, rooftop solar companies should strive to make products and services that are truly affordable.
Contrary to a number of fake news sites’s claims, solar panels can’t replace the electric grid following a hurricane. As the Palm Beach post published following Hurricane Irma’s hit on Florida,
“The vast majority of solar systems are what’s known as “grid-tied.” If the power goes out, the photo-voltaic system automatically disconnects. If the grid has no power, the solar system has no power, experts say.
Even if the sun is shining, the panels will not generate power.”
We’ve all seen the articles claiming that if only there were more rooftops with solar on them people could have power after a major storm causes power to go out. But it just isn’t true. And this isn’t because the utility companies are trying to punish solar customers, it’s for safety, as Alyssa Jean Schaefer from Southern Alliance for Clean Energy explained to the Post:
“The biggest reason for this shutdown is safety. As soon as possible after the grid goes down in a hurricane or tropical storm, power companies get to work trying to bring it back on, that means hundreds, or even thousands, of workers and emergency response teams are performing hands on work on power lines in affected areas. If residential solar panel systems are connected to the grid and generating power, this poses an electric shock risk to any worker. Incorrectly connected generators pose the same risk and come with warnings not to connect to the grid.”
The only way to have power from your solar panels without the main electric grid is if you have a system with battery backup. And battery storage doesn’t come cheap. According to Greentech Media, a 5.6 kW system with enough battery storage to provide resiliency during an outage would cost more than $45,000.
After Hurricane Irma: Why solar power can’t replace storm-damaged grid
Susan Salisbury – Palm Beach Post Staff Writer
Hurricane Irma knocked out electricity to millions of Floridians, as well as people in Georgia, Alabama and the Carolinas last week. At the outage peak on Sept. 11, 7.8 million utility customers were in the dark.
What about those with solar systems on their homes? Were they also without power?
Yes. The vast majority of solar systems are what’s known as “grid-tied.” If the power goes out, the photo-voltaic system automatically disconnects. If the grid has no power, the solar system has no power, experts say.
Even if the sun is shining, the panels will not generate power.
Alissa Jean Schafer, solar communications and policy manager at the Southern Alliance for Clean Energy, explained in a recent blog that the standard, grid-connected solar system cannot necessarily be counted on to replace the power grid if you are without power after a storm.
“If the grid goes down, your solar panels are ‘down’ as well, not providing any electricity to you. If you’re not sure what kind you have, they are probably connected to the grid,” Schafer wrote.
“The biggest reason for this shutdown is safety. As soon as possible after the grid goes down in a hurricane or tropical storm, power companies get to work trying to bring it back on, that means hundreds, or even thousands, of workers and emergency response teams are performing hands on work on power lines in affected areas. If residential solar panel systems are connected to the grid and generating power, this poses an electric shock risk to any worker. Incorrectly connected generators pose the same risk and come with warnings not to connect to the grid,” Schafer said.
If you have a rare off-grid system, complete with a battery back-up, then it would work, Schafer said.
Of course, even when the grid is working fine, solar systems only produce power when the sun is shining.
Net metering is a flawed system that transfers costs of grid upkeep to non-solar users. This transfer was outlined in the 2015 Department of Energy report on grid modernization. If distributed energy sources such as rooftop solar equipment. Solar rooftop power is paid a higher retail rate compared to utility-generated power including utility-scale solar power, which is compensated at a wholesale price. All rooftop solar users connected to the grid add to the upkeep cost of the gird, however solar users benefiting from net metering do not pay for their portion of the grid upkeep costs. For this reason, enhancement in technology and capital expenditures need to be calculated in costs associated with net metering polices. While solar costumers can be reimbursed for the power they supply to the grid, it is untenable to allow solar users to avoid paying their share of grid upkeep. Without updated net metering policies, continued reimbursement of solar power at the retail rate shifts the burden of maintaining the fixed cost on non-solar grid users.
Solar PV raises the cost of maintaining power quality and network costs. The select few who benefit financially from net-metering are solar companies and costumers. Households with solar panels tend to be higher income than household relying fully on the electrical grid. As the subsidies continue to make solar panels more appealing, the cost is going to disproportionately increase for lower-income households.
DOE And Net Metering: Issues To Consider
By Peter R. Hartley
The United States Department of Energy (DOE) started a Grid Modernization Initiative (GMI) in 2015. As part of this initiative it recently asked parties with a stake in how the electricity grid is managed and operated to comment on studies undertaken from 2012 to now as part of the GMI. The comments are due October 30, 2017. Following review of the studies and comments, DOE will prepare a report to Congress that was requested as part of the GMI.
An important part of the GMI involves examining how distributed energy resources are integrated into the grid. DOE specifically asked for comments on studies that assess the costs and benefits of net metering. This post discusses some of the critical issues involved in making those assessments.
In most electricity systems around the world, net metering has been the default method of accounting for generation supplied back to the electricity grid from rooftop solar panels. The issue arises because many households have rooftop PV that generates more electricity than the household uses in the middle of the day, when the sun is shining most strongly and residents are often absent from the house.
Net metering is the default method of paying for electricity supplied to the grid since traditional electricity meters run backwards when power flows through them in the opposite than usual direction. Hence, only the net amount of electricity that the household consumes over the billing period is measured and charged for.
Net metering is related to a more general issue, namely how should people with rooftop PV panels that never transmit electricity back into the grid be charged for the grid electricity that they consume. These questions are related because we can think of a household that reduces its grid purchases after installing rooftop PV as paying itself the retail price for the electricity that it self-generates. As the amount taken from the grid drops to zero and then turns negative, net metering means that all rooftop PV power, whether self-consumed or consumed by others, is paid at the retail rate. This contrasts with utility-generated power, including utility-scale solar power, which is compensated at the wholesale price.
At first thought, the notion that rooftop solar should be valued at the retail price seems self-evidently true. For example, a household growing its own tomatoes similarly saves spending the retail price to buy tomatoes at the supermarket. Farmers growing tomatoes commercially, like the owners of facilities supplying utility-generated power, receive a lower wholesale price. The difference between the wholesale and retail prices represents the costs of distribution, transportation, product lost to spoilage and so forth in getting the tomatoes from the farm to the consumer. A household growing its own tomatoes saves on all those costs in addition to the costs incurred by the commercial grower, so it is appropriate that the “shadow price” of their own tomatoes reflects all the saved costs, not just the costs of the commercial grower as represented by the wholesale price.
The main reason this analogy fails in the case of electricity is that the retail price of electricity currently does not truly reflect the marginal costs that are avoided when a household consumes slightly less of it. Many of the costs involved in providing electricity to a household are fixed independently of the amount consumed. In particular, the costs of maintaining an electricity network depend largely on factors such as the number of consumers on the network and the distances between them, their distance from the generators on the system, the spatial configuration of the connections, the local weather conditions and so forth and vary hardly at all with the amount of electricity that each consumer purchases. Also, the costs of accounting and costs of servicing customers depend on the number of customers and not at all on the amount of power they purchase. In the long run, the marginal costs include the fixed capital cost of adding to the network and replacing depreciated parts of the network. In the rate-regulated electricity distribution market, capital costs are included in the rates charged to users of electricity.
In an era when most customers purchased roughly similar amounts of electricity it did not matter that fixed costs were added as a margin above the marginal price. As solar PV allows consumers to buy less power, however, they contribute less to paying the fixed costs when those costs are part of the marginal charge for the electricity they buy when the sun is not shining. As more consumers start contributing less to fixed costs, the amount that needs to be covered by remaining households taking all their power from the grid increases. An increase in the margin then encourages more consumers to turn to self-generation, setting up an unstable feedback mechanism – a type of Ponzi scheme – that ultimately must fail to the detriment to those with and without solar panels.
In an era when households can self-generate, but not enough to move off the grid entirely, retail prices need to be restructured to reflect the structure of costs. To send the right signals to consumers, there needs to be a fixed charge that reflects the fixed costs of being connected to the network, and a marginal charge that reflects the marginal costs avoided when the consumer buys marginally less power.
The critical issue to be examined, therefore, is how much of the cost of electricity supply is fixed and how much is variable, dependent on the quantity of electricity purchased. A related issue is that the variable costs will not be constant over time. In particular, they will vary with the overall demand on the grid. As overall demand for grid-supplied power rises, it is generated by sources that have higher variable and lower fixed costs. As more people switch to rooftop solar, the demand on grid supply in the middle of sunny days will decline. This will in turn reduce the marginal cost of supply at those times. The variable charge should therefore also decline – implying of course that as more people install rooftop PV the savings they obtain from, or the excess power they sell back to, the network should decline.
Net metering raises a further issue. Under net metering a household supplying power to the grid is paid as if they are saving the system on allcosts incurred in delivering power to retail customers from utility generators – including the costs of that household’s own connection to the system. That is clearly not the case, for the household would not be able to sell any power without being connected to the system.
The situation is actually worse than this argument suggests, however, since the electricity grid was originally constructed to flow power from the high voltage part of the network to the low voltage part. In addition, devices were put in place to ensure that the frequency of oscillation of the AC power remained within tight tolerances, and the oscillation of voltage and current did not get out of phase with each other. Adding generation to the low voltage part of the network generally requires additional capital expenditure on network upgrades to handle the changed pattern of flow and the changed characteristics of net demand for power in that part of the system. Thus, electric users with solar panels are actually increasing the capital costs of the network and their network charges would ideally reflect these costs.
Furthermore, solar power, like wind power and run-of-river hydroelectricity, is not under the control of the engineers charged with maintaining grid stability and power quality. As the proportion of such uncontrollable sources increases, larger amounts of standby capacity need to be added to the system. This will also generally raise costs of generating assets that must swing up and down to back up those intermittent power sources.
In summary, far from saving on network costs and the costs of maintaining power quality, additional generation rooftop solar PV more than likely adds to those costs. This therefore is another critical issue to be researched. It could well be the case that the fixed “network charge” for households supplying power back to the grid should differ from the fixed “network charge” for households only taking power from the grid.
Lastly, there is also an equity issue in the net metering debate. To the extent that solar panels are subsidized directly via the tax system and under a net metering system, households with solar panels are on average characterized by higher income than households (renters and homeowners) relying solely on the grid for electricity. As the subsidies continue to encourage more solar panels, more and more network costs are forced on to those relying totally on network electricity. The result is growing cost inequality to the detriment of lower-income households. Distributing the network costs fairly to all of those connected to the network would help to reduce this inequitable cost allocation.