Another chapter has been written in residential solar’s most-read book: Utilities vs. Distributed Generation. This time the setting is Idaho, current day, as Idaho Power Company has proposed to state regulators a measure to decrease the rate that solar owners receive for their excess solar generation by 50%.
This is one of the two most common ways that utilities attempt to undermine residential solar, with the other being via monthly fixed charges, like a “grid access charge” or whatever the utility in charge choses, they’re all essentially the same mechanism.
In this instance, Idaho Power is arguing that “the standard rate paid has failed to properly recover the costs incurred to serve customers with on-site generation,” which is the most common reasoning when utilities chose the “decrease net metering’s value” avenue of attacking residential solar.
This methodology is one that has been repeatedly disproven, including in an analysis by Brookings Institution in 2016, which found that, in most instances, net metering is in fact a net benefit to ratepayers. Now, in the spirit of fairness, the cost shift argument is not always an illogical one. Lawrence Berkeley National Lab has found that there actually is a cost-shift when solar penetration levels rise to around 10% of total annual power on the system.
The reality is that solar currently serves less than 3.6% of demand in Idaho Power’s energy mix.
If approved, this proposal could prove to be a death blow for the already weak residential solar industry in Idaho. To date, the state has a total of 448 MW installed solar capacity, 52 of which come from residential solar units.
This is not the first attempt to rid itself of the ‘burden’ of net metering that Idaho Power has made this year alone. In April, the utility asked the Idaho Public Service Commission (IPUC) for permission to rid itself of Schedule 84, the net metering provision it created under orders from IPUC. Before that, in 2017, Idaho Power used the same cost-shift argument when presenting before regulators an application to get rid of net metering.
What’s most interesting is that these attacks on net metering are coming from a utility which was the second utility in the United State to announce a goal to transition to 100% clean energy by 2045. However, as utilities have been quick to find out, there are plenty of ways to increase the penetration of ‘clean’ generation sources without those sources including residential solar. Utilities are also free to define what ‘clean’ generation means to them, with sone including nuclear energy and natural gas in that designation.
Idaho Power is not clean in terms of what types of generation it does consider ‘clean,’ but hydroelectric is most definitely included. As the first graphic above shows, hydropower supplies nearly half the power on the utility’s system, with wind, solar, biomass, geothermal and all other renewable resources combining for just over 19% of the power mix.
The fate of the relatively weak Idaho residential solar market could be hanging in the balance of this application before our very eyes. This could be the end, or just another turn in the game of net metering cat-and-mouse between Idaho Power and state regulators.