As Solar Power Spreads, Diverse Users Fight Utility Attempts To Penalize It


Photovoltaic solar power field at Volkswagen plant in Chattanooga, Tennessee

Photovoltaic solar power field at Volkswagen plant in Chattanooga, Tennessee

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You'd be surprised how much a rooftop solar panel can make utility-company executives sweat.

Home solar installations are on the rise in the U.S., and that has electric utilities worried.

Now they have a new worry: A remarkably varied group of advocates and interest groups is fighting efforts by utility lobbyists to restrict, penalize, or boost the consumer cost of solar electricity.

DON'T MISS: Residential Solar Competitive With Electricity In 25 States Next Year: NRG CEO (Jun 2014)

Utilities have long operated on a traditional, century-old business model: They generate electricity at huge central power plants, and sell it to homes and businesses, distributed via a one-way electric grid.

Distributed solar panels disrupt that model, cutting utilities' revenue from customers getting power from the sun's rays--yet still saddling them with the costs of maintaining expensive infrastructure as a backup.

And like most established industries facing new competition, utilities aren't taking this perceived threat lying down.

Electric power plant outside Ithaca, New York

Electric power plant outside Ithaca, New York

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Utilities are waging a state-by-state campaign that started in legislatures and is now moving to public utility commissions, according to industry tactics laid out by The Washington Post.

Documents from the Edison Electric Institute trade group show that as far back as 2012, the industry was planning to limit or suppress solar power.

The first phase of the campaign involved pushing anti-solar bills through state legislatures.

ALSO SEE: Renewable Energy Won't Cause Electric Utility 'Death Spiral': Study

Most of these bills involved outlawing or increasing the cost of net metering--which allows homeowners to gain credit for the electricity their solar arrays feed back into the grid, effectively forcing utilities to "buy" that power.

Legislation pertaining to net metering has been introduced in nearly two dozen states since 2013.

In some instances, the bills were virtual copies of model legislation drafted by the American Legislative Exchange Council (ALEC)--a lobbying group associated with the Koch Brothers.

Two BNSF locomotives hauling coal trains meet near Wichita Falls, Texas

Two BNSF locomotives hauling coal trains meet near Wichita Falls, Texas

Enlarge Photo

However, this effort has largely failed--in some cases spectacularly.

Most of the bills considered so far have been rejected and vetoed. The drafters apparently expected widespread Republican support for these bills--but were disappointed.

It turned out that legislators pretty much across the board weren't all that keen on the government regulating how they got their electricity.

MORE: Will Solar Panels Destroy Electric Utilities' Business Model? Yes, They Say

As attempts to get legislation passed proved less than successful, lobbyists began to court public-utility commissions instead.

These state-level commissions set the rates and fees utilities can charge customers, and are typically made up of political appointees--insulating them from public opinion compared to legislators who must campaign for reelection.

Last month, an Arizona utility was given approval to institute a monthly surcharge of about $50 for net metering. Utility commissions in Wisconsin and New Mexico are considering similar measures.

BMW DesignworksUSA solar carport

BMW DesignworksUSA solar carport

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But whether those measures pass or fail, the solar industry will likely continue to grow. The price of photovoltaic cells has fallen 60 percent since 2010, bringing them into the reach of more consumers.

And while some state governments support anti-solar measures, others subsidize solar installations as a way to cut greenhouse-gas emissions.

Ironically, even the utilities stand to benefit somewhat from the current solar boom.

More solar-generating capacity helps balance utility grids during times of high demand, taking some strain off the existing infrastructure.

As utilities fight to protect their bottom lines, though, that may well not provide much consolation.

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