Join
Search

Why Are Electric Companies Standing on Their Own Ignorance to Block Solar Savings? Because the Regulator Lets Them.

Bookmark and Share

Whether the electric utilities like it or not, more people are using solar energy for electricity than ever before. And they are saving money at the same time. A federal rulemaking about streamlining the process for connecting small solar energy supplies to the grid reveals the real issues: Solar is causing competition and utilities are slowing the policies that can lower consumer costs.

Blunt Resistance to PolicyUCS is countering utility industry arguments that solar panel hook-ups should not be streamlined. The arguments are maddening. The utilities trade group, Edison Electric Institute, and one of the largest utilities, Southern California Edison are saying:

  1. Despite Southern California Edison’s award-winning installation of over $1.7 billion new “smart” meters, they are not able to collect customers’ minimum use (only maximum use). Finding the actual minimum use during the daylight hours is a better screen for judging the amount of solar that can be quickly added to a section of the grid than a rule of thumb applied to an estimate, which is the present practice.
  2. When Southern California Edison sought permission to install the smart meters, and charge consumers for the cost, they said that they would have the tools to organize the data for such tasks. While the meters themselves may not recognize day from night, there are some tried and true techniques to indicate the movement of the sun, ranging from the sundial to the digital clock. As this is a database problem, perhaps a “look-up table” with sunrise and sunset times can be added to the programs to serve this need.
  3. Utilities are contradicting themselves. On their websites, utilities with smart meters are promoting the ease of access to relevant data, and how the meters can support the adoption of renewable energy.

What some utility companies (and people) don’t know about the sun

By keeping the generator connection process simple, home and business owners and solar installers completed 90,000 solar panel installations last year in the U.S. The home or business with solar panels is still connected to the electricity grid, and we should all acknowledge that these customers still need the grid to obtain electricity at night. Designs for solar off-grid electricity are much more expensive.

Solar panels on the roof means less energy is purchased from the electric company, and people seem to like that. With the innovation of customers buying electricity from solar companies (known as “Solar PPAs,” which are present in many states as the map below indicates), would-be solar customers don’t have to put money down to put solar up.

States allowing energy sales from rooftop solar

States allowing energy sales from rooftop solar

UCS is supporting the spread of solar in a rulemaking at the Federal Energy Regulatory Commission that is seeking to streamline the process for small generators that install solar photovoltaic (PV) panels on the rooftops of homes and businesses.

  1. The Commission should complete the reforms in the notice of proposed rulemaking.
  2. UCS supports using the actual data instead of relying on estimates and rules of thumb. The Commission should order data collection and should reject utility arguments about inability to obtain minimum load data where new meters have been installed.
  3. Utilities must recognize the benefits on the grid of solar, including voltage support. The Commission should direct utilities on voltage support to maintain just and reasonable rates.
  4. The state utility regulatory commissions must fix the utility companies’ incentive to sell more electricity. A new revenue model is required to pay for the grid with less electricity sold. UCS supports making a fair assessment of the benefits of solar and energy efficiency, and of the costs to keep wires connecting our communities to the power grid.

If this sounds like the utilities are being obstructionist, consider how the utility industry got this stage. The democratic process at the federal and state levels has created several pro-solar policies. Federal tax credits for solar are significant. These were included in energy legislation signed by George W. Bush after the elected Congress came together in 2008 on energy and tax policy. The majority of states’ legislatures created Renewable Energy Standards that promote new renewable generation, many with solar-specific targets.

Not all electric utilities have opposed these choices made by our democracy.  The utilities numbered 3 and 7 of the top 10 in the recently released ranking of U.S. electric utilities building their own solar are not-for-profit. See the listing utilities ranked by solar Watts-per-Customer. These tend to be small utilities that have to pay the larger utilities for their use of the big company’s transmission. Ohio put three municipally-owned utilities on this list of leaders, with transmission savings as a driver. (There is no need to pay for long-distance delivery when the solar energy is produced and used locally.)

For all the fun here, this is deadly serious. The utilities are actively seeking to reverse the policies adopted by the democratic process by feigning ignorance, and hiding their business interest behind the claims of maintaining reliability. Elsewhere they are saying renewables and conservation efforts are causing a death spiral.

Whack-a-mole or adapt to new realities

The sun will rise over the utility industry. They are in for a long, hot stretch. As customers select new technology that meets their own goals and aspirations, such as using less electricity and getting their supply from solar, the utility industry won’t be able to wish away the day of reckoning.

If the state regulators fail to address the utilities incentives and behaviors that seek to deny customer participation in market, they will enable the utilities to play Whack-a-Mole with each new innovation and energy-saving effort.

Posted in: Energy Tags: , , , , , , ,

About the author: Michael Jacobs is a senior energy analyst with expertise in electricity markets, transmission and renewables integration work. See Mike's full bio.

Support from UCS members make work like this possible. Will you join us? Help UCS advance independent science for a healthy environment and a safer world.

Comments are closed. Comments are automatically closed after two weeks.

6 Responses

  1. Jim Case says:

    In our experience, another aspect of the resistance to rooftop solar generation by the large investor-owned electric companies is their insistence, and their persistence, in building extremely high voltage, inefficient power lines through existing communities regardless of its impact, under the banner of renewable energy. A good example of this is the Tehachapi Renewable Transmission Project, a 173-mile high-voltage line designed to bring electricity from wind energy from the Tehachapi mountains to the greater Los Angeles area. This is a critical part of the business model that leads these large utilties to resist the efforts of the small and medium size solar firms to use net metering to sell their services.

    Our community-based non-profit organization, Hope for the Hills (hopeforthehills.org) has waged a struggle for the past several years to mitigate the impact of this line, which Southern California Edison is building through the City of Chino Hills, 30 miles east of central Los Angeles. Chino Hills is a quiet residential community of families, churches, and schools, with many parks and playgrounds, all potentially impacted by these high-voltage lines. Construction on this transmission project through Chino Hills includes 200 ft. tall 500 kv. towers as close to 40 ft. from over 1000 homes near a narrow 150 ft. right-of-way. Work on this segment of the project was suspended by the California Public Utility Commission in November 2011. The CPUC ordered SCE to present alternatives to the overhead lines, and is expected to rule in July 2013 on proposals to underground these lines through the residential community. Recently, the Division of Ratepayers Advocates of the CPUC (http://www.dra.ca.gov/general.aspx?id=2307) concluded that new information called into question the need for the line in our city, and added that a smaller transmission line, or no line at all, might be preferable to the originally approved plan.

    It is clear that SCE has resisted every opportunity to work with the City of Chino Hills to underground these lines. Undergrounding would set a precedent that would make it more difficult to construct high-voltage transmission structures in the future, without considering the impact on local communities, in order to move electricity produced from its rural large-scale solar and wind energy projects to residential, urban communities. This business model is threatened by the rooftop solar projects supported by net metering, just as it is threatened by being held responsible for the impact of its transmission infrastructure on the residential communities surrounding these projects. It is interesting that Edison officials recently disclosed that this line would also carry conventional energy. We have, in fact, talked to solar contractors at an SCE event who complained that SCE had made it very difficult for them to be successful in their efforts to promote rooftop solar installations.

    Thanks for your great work on this issue.

    Jim Case
    casej99@gmail.com

    • Mike Jacobs says:

      Jim- You are right that the rise of rooftop solar over the utility business model requires more discussion, and reforms to re-direct the priorities of the utility industry. The struggle you describe has been repeated elsewhere, as well. There will be local impacts from the transmission lines for windy regions, but there are wider-spread environmental benefits from the replacement of fossil fuel power plants. There is no doubt that we need to sort this out, as there is great synergy between wind and solar in California. The wind output rises late in the day and carries the load through the night.
      Your comments, and the efforts you have made in your community are exactly what we ALL need. The involvement of citizens in making energy choices, and acting in their own community is the driver for small solar, and big policy. Thank you.

  2. Dale Lee says:

    The geoengineering that is going on blocks up to 20% of the sun in some areas, which cuts the output of solar panels significantly. You might take a look at the following videos.

    http://www.whyintheworldaretheyspraying.com/

    http://www.whatintheworldaretheyspraying.info/
    you can watch What In The World Are They Spraying at
    https://www.youtube.com/watch?v=jf0khstYDLA

    and the soon to be coming part 3
    http://www.whointheworldisspraying.com/

    Contact me if you would like more information.

    Thanks
    Dale Lee

    • Mike Jacobs says:

      Dale- Climate change is a major threat, and straightforward, no regrets solutions are the only ones that makes sense. Conversion of our energy industries to rely on renewable energy, and investment in our homes in businesses for energy efficiency are wise, job-creating means to reverse the trend of carbon emissions that excessively warm the earth. Geoengineering is a disturbing idea.

  3. Joe Holtzman says:

    This is a very good summary of what is taking place in the industry. Though the utilities spew out their PR on renewables their business model does not support it. I found that when I installed my home solar unit Southern California Edison dragged their feet in the permitting of the systems turn on. I have heard of case after case o f this stalling by SCE.

    I worked to get a green ordinance into my city by not charging building permit fees. It is my understanding that this has encouraged solar to the chagrin of the two electric utilities.

    • Mike Jacobs says:

      Joe- Thank you for your comments, and your efforts to move your municipal permit process in this direction. This is a time of change, and there are many practices that need to be reformed. I am particularly excited about this type of democratic, citizen-based activity. Because solar, and other small generator and efficiency options, are inherently de-centralized we see thousands and thousands of decisions made by people to change their energy practices. When the state utility regulators confront the problem of business model incentives, we will have really changed the way this energy system works.