Do solar consumers create a cost-shift to non-solar users?

Share

By Andrew Sendy, CEO of SolarReviews.com
If a state’s has net-metering programs that compensate its customers for the excess electricity their solar array produces and exports back to the grid—and there’s a good chance they do, given that 43 states and the District of Columbia currently have them—you will often hear utilities make an argument when they decide they want to dismantle them.
 
Specifically, they try to label the customer, as a solar consumer, a mooch that lives off their fellow hard-working ratepayers. Their argument goes something like this:
 
Solar consumers produce their own solar power on-site, meaning that they are not using their distribution and transmission systems (aka “the grid”). Therefore, the argument goes, they are not paying their fair share of upkeep of the grid. And since they aren’t paying for it, someone else obviously has to—and so they claim those costs shift to non-solar customers.
 
[To see if a state has net metering, check out SolarReview’s guide by clicking here.]
 
But is that really true? That’s what this article will explore.
 
Is It A Really Complicated Question?
 
Turns out, it really isn’t. Sixteen state-level studies, according to the Solar Energy Industries Association, have disproven the cost-shift argument. And the definitive national study, done by the well-respected solar research laboratory, the Lawrence Berkeley National Lab, has found an even more specific repudiation of the utilities’ argument.
 
Berkeley found that most states—all but three, in fact—have a negligible solar power cost shift at all. Why? Because most states have solar penetration levels far below 10%. Until you hit that level of penetration (i.e., the total amount of solar electricity capacity installed), there’s no cost shift at all.
 
Perhaps even more surprisingly, even at penetration levels of 10% or higher, the “shift” is only 5/1,000 of a cent per kilowatt-hour. Ultimately, even at high rates of solar penetration, the effects on the bills of non-solar consumers are infinitesimal.
 
“If the goal is to keep prices low, there are other pieces of the puzzle that affect rates far more than net metering,”  Galen L. Barbose, a research scientist at Lawrence Berkeley National Laboratory (LBNL) noted –echoing a study by LBNL which put this in context. “Carbon pricing, operating outdated plants—those are the issues utilities and regulators should be focused on.”
 
Furthermore, the argument doesn’t take into account the benefits of having more solar on the grid brings, including peak-shaving (the easing of grid strain during periods of high electricity use), utilities’ avoided costs (the more solar on the grid, the fewer expensive traditional power plants they have to build) and, naturally, the environmental benefits.
 
One study in Maine, in fact, showed that solar consumers would actually save other ratepayers $750 million over 20 years.
 
Clearly, solar consumers aren’t a problem. So what on Earth is really going on?
 
So Why Do Utilities Make This Argument?
Herein lies the crucial question: If the “cost-shift” argument is so blatantly false, why do utilities keep making it? And how can solar consumers fight it?
 
As been discussed elsewhere, it’s one of the oddest industry relationships we’ve ever encountered. After all, solar does need utility support from time to time, and utility customers want solar. At the same time, however, that symbiotic relationship is constantly being challenged by the competing economic models. The more customer-sited solar there is, the fewer customers are feeding the utilities’ coffers and keeping their investors’ dividends high.
 
Given this (friendly?) competition/rivalry, it’s no wonder the utilities still make the argument, is it? It’s a way to split solar users from non-solar users in a way that allows them to keep their monopoly, centralized electricity distribution model in place (the old divide and conquer model used with such success in the old British Empire).
 
And with the overall number of solar consumers still relatively small in most utilities’ customer base, it’s hard to debunk this myth that comes back from the dead as often as Chucky the Killer Doll. In fact, not even most solar consumers know this argument is a myth.
 
But, armed with knowledge (and a handy link to the Berkeley study), customers can make sure their utility is never again able to use this argument to dismantle the most-effective incentive to encourage solar adoption.
 
And consumers can stop feeling guilty. They are not only not mooching off their neighbors, but they’re improving the grid and its reliability for everyone.

The views and opinions expressed in this article are the author’s own, and do not necessarily reflect those held by pv magazine.