Oklahoma recently passed a bill that allows electric utilities to add a surcharge on the rates of homeowners with new photovoltaic (PV) systems. According to the utility folks, this is why:
“It levels the playing field where one customer was subsidizing another,” a spokesman for one utility told The Oklahoman. “This neither unfairly advantages or disadvantages a class of customers.”
Unsurprisingly, the solar industry and homeowners with PV systems are somewhat inclined to disagree, and I think I have to go with them on this one. In what sense are non-PV owners “subsidizing” those with solar systems? How is this not a disadvantage to solar system owners to tax their rates above what those who are not creating clean energy are using? What seems more likely to be going on here is that utilities are grappling with loss of customers to distributed renewable energy systems, and understandably, they don’t like it, and they are doing what they can to reduce the impacts to their profits.
As we create more distributed PV systems, I expect we will see more challenges like this one coming from utility companies, who are nervous about losing their customer base. According to this article, Arizona and Maine are also in the process of adding surcharges on to solar capacity. Is subsidizing traditional utilities and slowing the rate of return on solar to homeowners really the road we want to be going down? This is not particularly good clean energy policy. Unfortunately, not everyone can be a winner in the transition to cleaner forms of energy; but the last thing we should be doing is throwing road blocks in the form of financial disincentives in the way of consumers that are trying to do the right thing. If utilities want to continue to make a profit in a world waking up to the costs of carbon, they should be putting their efforts into investing in clean energy alternatives, so their customers don’t see the need to abandon them for cleaner forms of energy.
Worst of all, the American Legislative Exchange Council (ALEC), an extremely powerful corporate lobby group, is putting money and muscle behind these legislative efforts in order to tip the scale in favor of non-renewable energy industries that are among ALEC’s major constituents. Because of this, one of Oklahoma’s solar energy producers is actually traveling as I write this to Google, which is a member of ALEC, to tell them they are undermining their own clean energy policies by supporting an organization that shadow-writes this type of legislation. Google’s support of ALEC is particularly inconsistent given that Google recently announced a $250 million solar fund to finance rooftop solar systems. You can support his efforts to spread the word on ALEC’s dirty energy fight, and ask Google not to support these efforts, as I did just recently here.
There are states that are taking a much more positive approach towards solar energy incentives. As I recently wrote about in Action 114, Washington offers substantive residential production incentives in addition to the federal income tax credit to help the math work in favor of PV installation. And Vermont has extended substantive solar incentives to homeowners as well as commercial and industrial sites to help implement solar systems in that state. But with the substantial political and financial power that lies within ALEC and traditional energy utilities, I am quite sure that the structure of incentivizing vs delaying the growth of distributed solar is a fight that is going to have many fronts- keep your eyes peeled!
UPDATE: Steve went before Google’s Board on May 14, and very clearly articulated his case. You can see a video of his comments here. I know we are all looking forward to seeing how Google responds.