California’s net metering laws are increasing the cost of electricity for non-solar users by shifting the cost of grid upkeep to a smaller and smaller pool of rate payers, while the use of the grid is shared by all users. The shift in cost has already reached $65 per year for normal utility customers and will continue to increase if California doesn’t reexamine the state’s net metering policy.
Why Am I Paying $65/year for Your Solar Panels?
700,000 California homes now have solar panels; what does this mean for everyone else’s rates?
“This is the future,” one of my neighbors recently told me, proudly showing off his rooftop solar panels, “Forget the old, inefficient utility.” The panels do look great, and, for a moment, I got caught up in my neighbor’s “green glow” of eco-righteousness. Should I be doing “my part” for climate?
But wait a second. I already am! As Severin Borenstein has been pointing out for years, a big part of the reason why rooftop solar is so popular in California is our electricity rates. And because of the way rates work, every time another neighbor installs solar, my rates go up. I’m tired of it. Why should they get all the “green glow”? Why should I be paying more for their rooftop solar, particularly given that grid-scale renewables are so much cheaper?
Almost 700,000 homes in California have installed solar, about 5% of all homes in California. Today I want to figure out what this means for the rest of us. No fancy econometrics, no complicated model. I just want to do a simple back-of-the-envelope calculation to try to figure out how big of a deal this is.
Utilities have a lot of Fixed Costs
It is helpful to take a step back and think about what it takes to deliver electricity. Utilities have lots of what economists call “fixed costs”. For example, utilities have to maintain all the transmission and distribution lines used to deliver power. These costs are fixed (not marginal) because they do not depend on how much electricity is consumed.
Who pays for these fixed costs? We all do. Every time you use electricity, you help pay for these fixed costs. There is a long history in the United States of regulators setting electricity prices equal to average costs. Economists have argued that it would be more efficient to set prices equal to marginal cost. But the truth is this didn’t matter much in the past, in part because people didn’t have much choice about whether or not to consume electricity.
Until now. Rooftop solar is an opportunity for consumers to radically reduce the amount of electricity they buy from the utility. In Hawaii there is a lot of talk of “grid defection”, but in 99.9%+ of cases solar homes continue to be connected to the grid. Solar homes use the grid just as much as other households, as they are always either importing or exporting electricity, it’s just that they consume much less grid-electricity.
What this means is that good people like my neighbor contribute much less to paying for utility fixed costs. The fixed costs haven’t gone away, but my neighbor now has a lower electricity bill so pays far less of them. This leaves the utility with a revenue shortfall, and it is forced to raise prices. So who pays for the fixed costs my neighbor used to pay? Everyone else.
A key subtlety here is “net metering”. Households who install rooftop solar pay only for the electricity they consume “on net” after solar generation. This is easy and simple, but also wrong. Implicitly, this means that they get compensated for their solar panels’ sales to the grid at the retail electricity rate. This is too high, significantly exceeding what the utility saves from not having to supply that electricity. Under an alternative rate structure, in which households were paid the wholesale rate, you would not have this “cost-shifting” away from solar households.
Ok, but how much cost shifting is actually happening? Outside California, Arizona, and Hawaii, probably not much. But California has a lot of solar, about half of all U.S. rooftop solar. How much have California electricity rates increased due to the 700,000 homes with solar?
This is tricky because we don’t actually know how much electricity is being produced by rooftop solar. Almost everyone is on net metering, so we only observe net consumption, not solar production. Fortunately, the California Energy Commission has poured over solar radiation information and other data and estimated that total annual generation from California behind-the-meter solar is 9,000 GWh. About two-thirds of this is residential, so about 6,000 GWh. To put this in some context, total annual residential electricity consumption in California is 90,000 GWh.
So how much “cost shifting” does this imply? The average residential electricity price in California is $0.185/kWh, while the average wholesale price is about $0.04/kWh. Accounting for electricity that is lost during delivery to the end customer adds about 9% more per kWh delivered. Thus, each time a California household produces a kWh, the utility experiences a revenue shortfall of about $0.14. Multiply this by total residential distributed solar generation, and you get $840 million annually. California utilities receive $15 billion annually in revenue from residential customers, so the total shortfall is about 5%.
This is a crude calculation, and it could undoubtedly be refined. For example, distributed solar proponents argue that local generation allows the utility to avoid distribution system upgrades, which would represent an additional benefit. These impacts have been found to be relatively small, but this continues to be an area of active research. On the other hand, I’ve also made an assumption that significantly decreases my estimate of cost shift. In particular, I’ve used the average residential retail price, but California customers actually pay increasing block rates so most solar customers face a marginal price well in excess of the average price.
The total revenue shortfall works out to about $0.01 per kWh, or $65/year for the average California household. This is more than I expected. And, I’d bet most Californians are not even aware that this cost shift is happening.
So why am I paying $65/year for other people to have solar? It doesn’t make sense. Sure, I’m concerned about climate change, but my $65/year could go a lot farther if it was used instead for grid-scale renewables. Moreover, this is almost certainly bad from an equity perspective, as we know that high-income households adopt solar much more often than other households. Rooftop solar isn’t getting rid of the utility. It’s just changing who pays for it.
Reat at: https://energyathaas.wordpress.com/2018/03/26/why-am-i-paying-65-year-for-your-solar-panels/
As solar panels begin to reach the end of their useful life, current recycling systems are not designed to handle the proper recycling of the panels. Without a proper plan for disposing of panels, old and damaged units could end up in landfills. Damaged panels can leach dangerous materials if disposed of in a landfill.
It’s time to plan for solar panel recycling in the United States
End-of-life panels might not need recycling for another 15 years, but that doesn’t mean we should ignore the growing issue today.
In 2017, the United States installed 10.6 GW of new solar energy. Using rough math (if every panel was 300 W), that’s 35.3 million new solar panels installed last year. In about 30 years, a wave of 35.3 million panels may reach the end of their lifespans, not counting the hundreds of millions of panels that flooded the U.S. market in the last decade that may need to be disposed of sooner.
What to do with this future solar waste has been bothering many in the industry, especially Sam Vanderhoof, owner of consulting firm Solar CowboyZ and former president of Schott Solar.
“I’ve been working in solar since 1976. I’ve been doing it a long time, and that’s part of my guilt. I’ve been involved with millions of solar panels going into the field, and now they’re getting old,” he said. “The industry seems to think—myself included—that there isn’t a problem yet. The reality is that there is a problem now, and it’s only going to get larger, rapidly expanding as the PV industry expanded 10 years ago.”
Solar panel disposal and recycling isn’t a huge issue right now in 2018 because there isn’t a big enough volume to cause concern. Solar panels are warrantied to perform more than 25 years, and once the warranty expires, panels will still produce energy, albeit not at their advertised peak. Solar installations in the United States didn’t really take off until 2010. Any influx of panels needing replaced today happens after freak weather events or other accidents.
But where are those damaged panels going now? With no dedicated national program or requirement to safely dispose of solar panels, some unfortunately find their way to landfills. If the system owner is green-minded and has the money, panels may get shipped to a recycling facility. Other industry players are warehousing damaged or old panels until a practical recycling program is established.
That’s why Vanderhoof and a few colleagues recently started a new recycling program in the United States—Recycle PV—modeled after Europe’s successful program. The program is still in its early stages, but Vanderhoof hopes his efforts will start a movement.
“Who is responsible for it? In the U.S., nobody is,” he said of solar panel recycling guidelines. “It is important for the industry to step up to address it. Solar is supposed to be renewable and clean energy, but there is this dirty side to it. There is a waste stream after time that hasn’t been addressed.”
Vanderhoof isn’t alone in these concerns. There are many U.S. players trying to get plans in place before safe panel disposal becomes a national issue. Determining guidelines now will make things easier when panels reach the end of their useful lives.
Economics vs. regulations
Cara Libby, senior technical leader of solar energy at the Electric Power Research Institute (EPRI), has been doing solar PV recycling research on behalf of the organization’s utility members. Libby said utilities asked for EPRI’s help understanding the feasibility of recycling in the United States since many own solar arrays approaching 20 years old. Libby and her research partners have been looking at various recycling technologies, whether modules should be classified as hazardous waste and how other countries have already approached recycling regulations.
“It’s still a little premature for dedicated PV recycling facilities [in the United States],” Libby said. “In the future, maybe around 2030, there will be a surge in PV waste volumes. Then we’ll have to start thinking about a better way to collect and recycle efficiently.”
EPRI found that most panel recycling in Europe through the Waste Electrical and Electronic Equipment (WEEE) Directive—which established rules for solar panel recycling in 2012—happens at glass recyclers. Panels are crushed or shredded and then glass and metals are separated. Other chemical and thermal processes may be used to recover high-value material like silver or copper.
System owners recycle their panels in Europe because they are required to. Panel recycling in an unregulated market (like the United States) will only work if there is value in the product. The International Renewable Energy Agency (IRENA) detailed solar panel compositions in a 2016 report and found that c-Si modules contained about 76% glass, 10% polymer (encapsulant and backsheet), 8% aluminum (mostly the frame), 5% silicon, 1% copper and less than 0.1% of silver, tin and lead. As new technologies are adopted, the percentage of glass is expected to increase while aluminum and polymers will decrease, most likely because of dual-glass bifacial designs and frameless models.
CIGS thin-film modules are composed of 89% glass, 7% aluminum and 4% polymers. The small percentages of semiconductors and other metals include copper, indium, gallium and selenium. CdTe thin-film is about 97% glass and 3% polymer, with other metals including nickel, zinc, tin and cadmium telluride.
There’s just not a large amount of money-making salvageable parts on any type of solar panel. That’s why regulations have made such a difference in Europe.
“In Europe, we’ve seen that when it’s mandated, it gets done,” Libby said. “Either it becomes economical or it gets mandated. But I’ve heard that it will have to be mandated because it won’t ever be economical.”
There’s nothing yet mandated at a national level, but there are a few states trying to get the required recycling ball moving. In July 2017, Washington became the first state to pass a solar stewardship bill (ESSB 5939), requiring manufacturers selling solar products into the state to have end-of-life recycling programs for their own products. Manufacturers that do not provide a recycling program or outline will not be able to sell solar modules into the state after Jan. 1, 2021. Regional takeback locations will be set up to accept solar panels at no cost to the system owner, and the state may charge manufacturers for the program. Final plans are still being decided.
Washington-based solar panel manufacturer Itek Energy assisted with the bill’s writing.
“Most of us here at the company feel strongly about being strong environmental stewards,” said Evan Bush, special programs coordinator at Itek. “It’s important to spearhead these efforts before there’s a big volume that will need to be disposed. With this in place, we’ll be more prepared.”
Itek’s modules are already in compliance with the new bill; the company uses a recycling partner in Idaho to take damaged panels and manufacturing scrap. Itek has been accepting back other brands of modules just to keep them out of landfills.
“There are reasons beyond just doing the right thing that should encourage others to [recycle panels],” Bush said. “Given the value of the component materials in modules, this shouldn’t be a burden to us or other participants.”
New York has a similar bill on the Senate calendar this year. Bill S2837A would require solar panel manufacturers to collect end-of-life panels for recycling. Critics argue that panel manufacturers should not bear the burden of recycling panels alone, although that is how the WEEE Directive works in Europe.
California SB 489 passed in 2015 and encourages safe disposition of old panels. California designates end-of-life solar panels as universal waste, a type of hazardous waste that is widely used in homes and businesses (like TVs or batteries). By California law, universal waste cannot be trashed or landfilled, but no guidelines are given on the proper way to recycle solar panels.
A U.S. recycling veteran
One U.S. company that has recycling figured out is CdTe thin-film module manufacturer First Solar. In 2005, the company made a commitment to extended producer responsibility. First Solar execs understood that in order for a renewable energy technology to truly be green, it was important to consider its end-of-life management. First Solar’s recycling program was established at the beginning of production to responsibly recycle manufacturing scrap, warranty returns and end-of-life panels. This environmental decision also had a financial perspective—tellurium doesn’t just grow on trees.
“There is a finite amount of tellurium,” said First Solar global recycling director Sukhwant Raju. “They wanted to make sure there was a way to recover the valuable stuff so it becomes sustainable growth for First Solar. It’s not just about being green, but how do we stay sustainable in the long term?”
First Solar recycling plants are attached to its manufacturing facilities—in Ohio, Malaysia and under construction in Vietnam. There’s also a stand-alone recycling plant in Germany.
“We have the capacity to recycle 2 million panels globally on an annual basis,” Raju said. “As more panels start reaching the end of their 25-year lifetimes, recycling will increase drastically.”
The company only recycles CdTe panels currently, even if the panels are not manufactured by First Solar (other CdTe panel manufacturers include Calyxo of Germany and Advanced Solar Power (ASP) of China). Raju said the company may develop techniques to handle crystalline silicon panels.
“We have a decade’s worth of experience in recycling, and we want to utilize that to broaden our efforts,” he said.
As with the decommissioning of other energy technologies, there’s still a financial obligation on behalf of the system owner. The company’s initial recycling program was pre-funded. When a First Solar panel was sold, a portion of that money went into a fund that could only be used for end-of-life recycling. In 2012, the company switched gears but continues to honor historical commitments under the prefunded module collection and recycling program.
“We realized we were not doing anyone any favors by charging customers 20 to 30 years in advance for end of life recycling,” Raju said. “The better approach was to do pay-as-you-go since it is more cost-efficient to finance PV recycling through later-year project cash flows instead of upfront funding. Now when we sell our panels, we offer a global recycling services agreement. Customers have the option to use our services when the panels get to the end of life stage. We’ll do the recycling, and they’ll pay the price at that time.”
This customer-funded recycling effort is dependent on system owners willing to pay the price to do the right thing. Raju thinks that as volume increases, recycling costs will come down and the greener option will be more attractive than just throwing panels away. First Solar is also taking steps to reduce recycling costs to ensure recycling becomes the preferred end-of-life management approach.
“Limited land availability and regulatory requirements will only increase the costs of landfilling,” he said. “Meanwhile, recycling costs will continue to go down. While customers may only be sending 100 panels today for recycling, by the time most of their panels get to end of life, our cost ratio will be way lower. They see the value in getting on the recycling bandwagon.
“But at the end of the day,” Raju continued, “there is nothing to force them, other than in places where there are regulations.”
The need for crystalline recycling
For c-Si modules needing recycling now in the United States, there are a few scattered options. Various glass and electronics recyclers have taken on solar panel recycling, but usually not on dedicated lines or on a grand scale. Industry advocacy group SEIA has begun organizing recycling efforts through its PV Recycling Working Group. SEIA will choose preferred recycling partners that offer benefits to SEIA members. ECS Refining and Cleanlites Recycling have recently been approved as SEIA recycling partners.
Cleanlites began in the early 1990s as a light bulb recycler, taking on other items like batteries and electronics, until it found a niche with “difficult to recycle” items. It has been catering to a solar crowd for the last few years and recycled 1.5 million lbs of solar panels last year (again, using rough math of 50 lbs per panel, that’s 30,000 panels).
“I saw the impending need for solar panel [recycling]. Those coming out of commission from now to the next 10 years is astronomical,” said Tim Kimmel, Cleanlites vice president.
Cleanlites uses optical, magnetic and hand sorting to separate aluminum, other metals and electronics from c-Si solar panels at its Cincinnati-based facility. The company is hesitant to accept other types of panels right now until it can determine safe processes. The leftover glass and silicon wafers (which may also have copper and silver mixed in) are sent to a smelter for further extraction. The process works for now, but it could be improved.
“We’re looking to put a new process line in that will be able to separate all the components and recover the silicon wafers and recycle the units 100%,” Kimmel said. “The goal is to avoid landfilling all these units, which is going to be a vast number here shortly.”
As solar panels are processed on the current lines, Cleanlites collects the scrap and sends 45,000-lb loads out at a time.
“At times, we get thousands of panels in a month, and on those times, we process twice a week, making the material and sending to the smelter on a consistent basis,” Kimmel said. “Other times, they come in slowly and we build them up until we are able to process a whole shipment.”
It costs money to send “solar scrap” to a smelter, and Cleanlites incorporates that cost and the cost of transportation into its recycling prices.
“There is a cost, so you have to weigh… do you want to be an environmentally sustainable company, or do you want to landfill thousands of pounds of material and have that show up?” Kimmel said. “The benefit of sending it to us, we’re able to receive it, ensure that the metals are recovered, and we recycle it. You’re not creating any waste or hazardous waste.”
A solar panel’s level of hazardous waste is up for debate. If panels are just old, there are usually no reasons to worry. EPRI research found the chance of chemical leaching grows if panels are damaged.
“We’ve conducted some toxicity testing on modules, and we have seen results showing that the presence of lead is higher than the threshold allowed by the TCLP (toxicity characteristic leaching procedure). There is a lot of variation between module types,” Libby said. “There is a potential for leaching of toxic materials such as lead in landfill environments. If modules are intact, it’s a low risk, but as soon as they’re broken or crushed, then the potential for leaching is increased.”
Recycling panels is the safest way to dispose of them, and SEIA and recycling centers are trying to make it easy to do the right thing.
Planning for future volume
There are clearly recycling options available now to U.S. solar owners, but their fragmented nature is what led Vanderhoof to form Recycle PV.
“There’s a little effort for sure, but it’s not concentrated. The information isn’t out there,” he said. “There’s not a good, simple flow of information and processes and procedures to deal with the waste stream.”
Recycle PV went straight to the pros, partnering with PV Cycle (the successful non-profit organization that offers waste management help to solar companies in Europe) and German panel refurbisher Rinovasolfor the U.S. market. Slightly damaged or underperforming panels can find a second life on the refurbished market. Rinovasol will take care of those, and PV Cycle sets up memberships to get recyclable panels to partner facilities. Thus far, Recycle PV has shipped two containers of panels to Germany for recycling, which is expensive but the only way to fully take advantage of the PV Cycle process right now.
The plan for Recycle PV is to get volumes large enough to build a dedicated solar recycling plant in the United States. Vanderhoof said once Recycle PV is processing 10,000 panels a month, a U.S. facility will make more sense.
“It’s not an outrageous goal,” he said. “Right now in Europe, they can recycle that much a day, but it’s been going on for a long time already.”
It’s a lofty goal for Vanderhoof and his partners to start a brand new operation, but he felt he had to do something.
“We’ve gone to a lot of waste management and EPA meetings. You look around the room and it’s all waste management people, not solar people,” he said. “Those guys are in there trying to work on the policies that affect all of us, and they’d like it to be a more expensive policy because they make more money off it. The solar guys aren’t as engaged as they could be.”
The most promising solution for the United States is if SEIA can successfully tap into the PV Cycle model and pick up recycling plants across the nation willing to invest in solar processing. If more states adopt Washington’s requirements to have all panels backed by recycling programs, national recycling plans might automatically form. A big solar name may be willing to forgo Washington sales, but it’d have a harder time losing out on California sales just because it doesn’t have a recycling plan in place.
Time is ticking. The United States has about 15 years before solar panel recycling becomes a major issue. Plenty of time to figure out the best course of action, but also plenty of time to procrastinate. Here’s hoping we set early deadlines.
After Sundurance Solar LLC went out of business, many of its customers were left with unfinished systems, or the wrong systems installed. What many homeowners believed was a smart investment for their homes turned into a major hassle. In some cases the installed equipment would have created a fire hazard had the panels been turned on. Without safeguards for consumers this type of situation will continue. We encourage all states to put consumer protections in place to stop this type of bad installation from happening in the future.
Solar panel company goes out of business, leaves customers with unfinished installs
Orlando-area woman informed what she paid for is not what was installed
Homeowners across Central Florida and across the state are having their solar panel systems checked after the solar panel company that installed them went out of business.
Some of those customers were left with unfinished installs and were stuck paying for equipment that didn’t even work.
Cyndie Chase, of Apopka, was one of those customers.
Chase said she put Solar panels on her home to increase the value of her home and to save money on her bill. She said she shopped around and picked a company called Sundurance Solar LLC to install the panels and get her switched over.
“I felt that they were reputable,” Chase said. “They offered good payment options, better than the other plan I was looking at.”
Chase said she signed the contract for the solar panels and was approved for the financing last summer. Since then, she has been making her monthly payments, but the solar system is still not connected.
She said she kept calling the company to come out and finish the job, and kept getting put off and then she learned Sundurance Solar LLC went out of business.
A quick internet search shows Sundurance has an “F” rating with the Better Business Bureau and a list of complaints and reviews before they closed up shop.
But Chase said she had no idea how bad things really were until the company stopped returning her calls.
Chase said she then called the finance company named on her contract to try to get results. She said they told her they would get another solar panel company to check on the status of the install and see what else needed to be done, but weeks went by with no action.
That’s when she called News 6.
Within a week of us calling, the finance company put Chase in touch with All American Solar LLC, of Orange City, to finish the job.
But what they discovered shocked Chase and them even more. Not only was it the wrong equipment, but it was poorly installed and if someone powered up the system, it could have caused a major fire hazard.
“The inverter wasn’t the right inverter that the homeowner purchased based of the agreement,” said Brandon Bing with All American Solar. “There’s been over 14 customers as of late that we are aware of as of right now. And if the list continues to compile, we are just trying to work diligently with the homeowners and come up with an amicable solution.”
Bing said they have been all over Florida fixing the mess Sundurance Solar LLC left behind. They warn all homeowners to do their homework before signing on the dotted line and said Sundurance definitely preyed on these customers.
All American Solar is working with Chase to get the correct equipment installed within the next 30 days.
“You know you have a lot of fly-by-night companies,” Bing said. “You have these outfits that are coming from different states — and then you have a lot of individuals that are just doing sleazy unethical sales tactics.
News 6 is continuing their investigation into the principals involved in Sundurance Solar LLC.
View original article at: https://www.clickorlando.com/news/solar-panel-company-goes-out-of-business-leaves-customers-with-unfinished-installs
Today, FBAE sent a letter to the South Carolina House of Representatives opposing HB 4421. This bill would have shifted the burden of grid maintenance from all consumers to non-solar users. This extra subsidy to solar users is an unfair shift in the cost of South Carolina’s electrical infrastructure. A copy of the letter is available here: FBAE – Oppose South Carolina HB4421
Kentucky Representative Jim Gooch writes in the Lexington Herald Leader about his plan to lower subsidies for solar users that are currently being paid for by all utility customers. Representative Gooch is a proponent of lowering Kentucky’s electricity rates for all customers. His plan would update the state’s Net Metering law to ensure all customers are paying for the upkeep of the grid.
If cost of solar has dropped so much, why are subsidies still needed?
As chairman of the Kentucky House of Representatives Energy and Natural Resources Committee for more than 19 years, I have seen both the highs and lows of energy policy in Kentucky.
I chaired the committee when coal production was at its all-time peak in Kentucky, and I fought the federal government as it tried to take down one of Kentucky’s signature industries. Electricity rates in Kentucky have increased by 30 to 40 percent over the past decade. Many of the factors driving those cost increases were outside the control of the General Assembly.
At every turn, I have kept as my core principle what is best for affordable energy for Kentuckians. I firmly believe that low-income Kentuckians should not pay any more on their electric bills, if it can be avoided.
This is why I’m sponsoring House Bill 227, a bill to modernize Kentucky’s outdated net metering law. The net metering “subsidy” or “mandate” is not a utility issue and it’s certainly not a partisan issue. It is a cost issue for all electric customers who choose not to install solar panels.
Kentucky is a cost-of-service, regulated utility state. The costs of Kentucky’s electric infrastructure are shared by all customers — as are the benefits. When one class of customers avoid paying the costs of the system, those costs must be paid by others to ensure around the clock reliable service.
Solar-produced energy is no more valuable than any other type of energy. For those who say otherwise, I would argue that coal-produced energy provide more benefits to Kentuckians.
For supporters of solar power and solar contractors, HB 227 would not affect larger scale private solar projects, which do not fall under Kentucky’s net metering law. It would not prevent those who choose to install private solar to do so for their own benefit and be fairly compensated. And the bill clearly grandfathers allcurrent net metered customers for 25 years, whether they sell their house or rent it.
That timeframe exceeds the life of all private net metered solar installations currently in Kentucky. Those systems already installed have been sold by contractors on the promise of paying off in 10 or 15 years. Another guaranteed 10 years of return absolutely will not hurt those customers’ investments.
HB 227 will not put solar contractors out of business. By rewarding net metered customers for their excess energy at a market price, it merely stretches out the time needed for a net metering customer to earn a return on their investment. Those who want to go solar can still choose solar and will still make a return.
Solar advocates are the first to point out that the costs of solar panels have come down 70 percent over the past decade. Who knows what the next decade will hold for them? As this market grows, other utility customers cannot afford to continue paying new net metered customers 300 percent of the market value of their electricity.
Net metering was always meant to help someone who wants solar panels to afford them. It was not meant to turn net metering customers into energy marketers, and it was not meant to enrich them with other customers’ money.
If the cost of solar is 70 percent less today than when we enacted this law, at what point do the subsidies end?
The executive director of the Harvard Electricity Policy Group, Ashley Brown, calls rooftop solar net metering and the returns they provide, ”Robin Hood in reverse” meaning it is “a wealth transfer from less affluent ratepayers to more affluent ones.”
Charles G. Snavely, secretary of the Kentucky Energy and Environment Cabinet, also supports the bill. “It is about not paying more for something than is necessary, yet also paying the solar generator customer for the equitable value of the excess solar produced,” he said.
Now is the time to address this inequity. We cannot delay this any further. We have a chance to head this off in Kentucky before it becomes an even bigger issue. Every year we don’t fix this structural problem with our electric rates, it gets harder and harder.
Every year we don’t address this issue, more and more grid reliability costs are pushed onto Kentuckians who can least afford it.
Rep. Jim Gooch, R-Providence, represents parts of Daviess and Hopkins Counties as well as all of McLean and Webster Counties.
Read original article at: http://www.kentucky.com/opinion/op-ed/article200855654.html
In January, Kentucky Energy and Natural Resources Committee Chairman Jim Gooch introduced a bill that would amend the compensation rate for solar users who sell the excess power they produce back to the utility companies. The 14-year-old system compensates solar users at the full retail price of the electricity, versus the wholesale price for these sales. This practice ultimately shifts costs to non-solar customers. While criticisms of net metering often center around the adverse effects on low-income individuals, evidence shows that the problem also extends to the majority of small businesses who don’t want or can’t afford solar. FBAE all business owners should fairly share in the fixed costs necessary to maintain the energy grid.
FBAE drafted a letter to the Kentucky Legislature, supporting Chairman Gooch’s legislation, H.B. 227. The bill will amend Kentucky’s net metering compensation system by paying producers at the wholesale rate instead of the full retail rate they currently enjoy. Additionally, the bill is not retroactive, and will not affect current users in the state.
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.
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.
“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.”