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.