Are Utilities Actually Subsidizing Rooftop Solar Users?
Counter to some utility claims that solar owners don’t pay their fair share, a new report says solar panels on homes, schools and businesses often provide more benefits than they receive through programs like net energy metering (NEM). The report, released by the Environment America Research & Policy Center, says solar panels provide pollution-free energy that delivers far-reaching benefits to the environment and the electric grid.
“Solar power’s rewards are far greater than its costs,” says Bret Fanshaw, Environment America’s solar program coordinator and report co-author. “We should be encouraging even more solar, not penalizing it.”
Environment America says the report, Shining Rewards: The Value of Rooftop Solar Power for Consumers and Society (2016 edition), comes as policymakers around the U.S. consider proposals from utilities to undermine successful solar energy programs, including NEM.
“Today, the vast majority of our electricity comes from sources like gas and coal that are pushing us toward the brink of catastrophic climate change,” says Gideon Weissman of Frontier Group and a report co-author. “Our analysis shows that the people and businesses who invest in rooftop solar aren’t just guiding us away from the cliff – they’re also providing benefits to society and to their fellow ratepayers.”
As the study explains, NEM programs credit solar panel owners when they generate more power than they use, providing electricity for other customers. Utilities then credit solar panel owners a fixed rate – often the retail price of electricity – for providing excess power to the grid, similar to rollover minutes on a cell phone plan. The report says these arrangements have helped solar energy skyrocket, but in recent years, utilities have increasingly attacked them as unjustified “subsidies,” including in Nevada, where utility NV Energy urged regulators to end the state’s retail-rate NEM program.
Environment America claims that its report, an examination of studies from around the country, tells a different story – that the dollar and cents value of solar is often higher than the credit utilities provide to customers. Of the 16 studies reviewed, 12 found that the value of solar energy was higher than the average local residential retail electricity rate. The median value of solar power across all 16 studies was around 16 cents per unit compared with the nation’s average retail electricity rate of about 13 cents per unit.
In other words, the report says, utilities were likely underpaying solar panel owners, not subsidizing them.
“Rooftop solar users are givers, not takers, when it comes to the value they provide to society and the electric system,” says Fanshaw. “In many cases, it appears that solar programs are a bargain for utilities, not a burden.”
According to the report, all 16 studies found that solar panel users offered the electric system net benefits. “There’s so much to gain by going big on solar, but so much to lose if some utilities get their way,” adds Fanshaw. “Let’s make sure we take full advantage of all the benefits by allowing solar to continue to grow in all our states.”
Paris Agreement Enters Force ‘Years Ahead Of Schedule’
The Paris Agreement officially entered into force on Nov. 4, much earlier than anyone had anticipated.
At last year’s COP21 in Paris, more than 190 countries came together to adopt the global climate deal, which the White House called “the most ambitious climate change agreement in history.” The main aim of the Paris Agreement is to keep a global average temperature rise this century well below 2°C and to drive efforts to limit the temperature increase even further to 1.5°C above pre-industrial levels.
Although the U.S., China, India and other nations ratified the agreement earlier, it wasn’t until the European Union voted to formally join the agreement in October that nations representing more than 55% of the world’s global warming pollution had ratified the deal – crossing the minimum threshold for the agreement to enter into force.
“The Paris Agreement’s ambitious and essential goals are now a live reality for every government. From today, ever-increasing climate action becomes an accepted responsibility and a central part of the sustainable development plans of all countries,” says Patricia Espinosa, executive secretary of the United Nations Framework Convention on Climate Change, in a press release.
Michael Brune, executive director of the Sierra Club, which noted that the agreement is coming into force “years ahead of schedule,” says in a statement, “Following years of dedicated activism, months of historic progress and unprecedented global cooperation, the Paris Agreement has finally jumped off of the pages and into reality. With its official entry into force, the path forward couldn’t be clearer. Now is the time for leaders to build on and fulfill their commitments and accelerate the world’s transition to an economy powered by clean, renewable energy.”
During a press conference in October, President Barack Obama had said the Paris Agreement “gives us the best possible shot to save the one planet we’ve got.”
Mayor Unveils Low-Income Solar Initiative
Newton, Mass., Mayor Setti Warren has announced the start of the city’s Community Solar Share Initiative, a pilot project designed to share the benefits of solar power with low-income Newton residents.
According to a press release, over 1,000 low-income households will save on their energy bills by receiving a free share of the credits generated by the city’s solar carport project, which at press time, is under construction at 70 Elliot St. Expected to generate about 660,000 kWh/year, the solar project will also reduce the city’s carbon footprint by increasing the amount of clean, renewable energy in the community.
In announcing the program, Warren said, “Eleven percent of Newton schoolchildren are living below the poverty line. One in eight Newton households are trying to live on less than $25,000 per year. We need to do what we can to level the playing field. Solar power is a great deal for those that can afford it. Newton has found a creative way to share the benefits of solar energy, providing low-income residents with modest, yet measurable, savings on their energy bills. And we are reducing carbon emissions and helping the environment in the process.”
The mayor praised utility company Eversource and Action for Boston Community Development (ABCD), a regional anti-poverty service agency, for working closely with Newton to bring this pilot project from conception to fruition. Any Newton resident or household that is already receiving the electric discount rate from Eversource is automatically eligible for a free share of the net-metering credits.
To preserve the privacy of the recipients, ABCD will mail a letter from the mayor to all eligible residents, who can decide to participate in or opt out of the program. By participating, residents agree to allow ABCD to share their electric account numbers with Newton.
John J. Drew, president and CEO of ABCD, says, “This is truly a landmark program to help those who are in the greatest need.”
“This pilot is a perfect example of how creative thinking and collaboration between public and private entities can reap innovative results,” adds Marc Lucas, community relations representative at Eversource. “We are excited to partner with the City of Newton and ABCD on this important initiative that will help our customers, as well as the environment.”
