Advocates worry Rocky Mountain Power rate change could ‘kill the solar industry here in Utah’
Renewable energy consultants reported to the Summit County Council last week that they surpassed county-set goals for outreach and community involvement in energy programs, but the update came against a backdrop of regulatory changes that threaten the economics underpinning the area’s solar industry.
One of the consultants told the council a Rocky Mountain Power proposed rate change for excess solar power could “kill the solar industry here in Utah,” while a local solar installer said in an interview the proposal sounded like the death knell for residential solar in the area.
At issue is a proposal from the utility to pay rooftop solar owners 83% less than it does now for the excess power their solar arrays create. An advocacy group and a solar installer said that rate would make rooftop solar no longer a sound financial decision for homeowners.
Rocky Mountain Power spokesperson Spencer Hall said the move reflects the actual cost of producing solar energy, which has come down significantly in recent years because of advancements in technology and hardware.
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“It goes both ways. Since it’s so cost-effective for everyone (now), that’s the appropriate rate that should be given to people,” Hall said. He added that most people aren’t putting solar power systems on their roofs for how much money they’ll make off the excess energy, but rather to offset their energy consumption.
He took issue with the assertion that the rate change would mean the end for the area’s solar installers.
“It’s certainly not true (that the rate would kill the area’s solar industry),” Hall said.
Rocky Mountain Power has proposed to pay 1.53 cents per kilowatt hour for excess energy from future rooftop solar systems, rather than the 9.2 cents it pays now.
The Utah Public Service Commission is not scheduled to rule on the proposal until after a series of hearings this fall. A Utah Clean Energy representative said the advocacy group will file a counter-proposal with the commission in time for a March 3 deadline.
Summit County adopted a goal to reduce greenhouse emissions countywide 80% by 2050 compared to 2014 levels. It contracted with Utah Clean Energy as part of that endeavor, and representatives Jeff Bousson and Ryan Anderson told the council Wednesday of their work on the six goals that were determined at the outset of the contract by the county’s sustainability program manager.
The projects included informing municipal governments of a community renewable energy program, conducting public outreach for endeavors like replacing lightbulbs with more energy efficient ones and administering a bulk-purchasing community solar energy program.
The outreach effort for the community renewable energy program was unexpectedly fruitful, Bousson has said, with five Summit County municipalities joining the statewide initiative.
Anderson told the council that 225 people filled out a survey indicating interest in the bulk-purchasing program, and that 45 contracts had been signed to install a system. The deadline has been extended until May 1, Anderson said, in part because the solar contractor has been in talks with several homeowners who would like to have a new roof installed before the work is done.
Anderson said there is even more incentive to have solar installed before this fall, as that’s when the proposed net metering rates would take effect. Those who have systems installed before October would be grandfathered into the utility’s previous rate, Anderson said.
The bulk-purchasing program offers discounts of 20%-30% from market-rate solar power systems, Anderson said. The discount is achieved because the installers bid on the ability to install all of the contracts that come through the program and lower their prices to outcompete other companies that bid for the work.
Additionally, a 30% federal tax credit for solar installations expired on Dec. 31, according to the U.S. Department of Energy. It stepped down to 26% for systems installed this year, and will be reduced to 22% for those installed in 2022. It will be zeroed out after that unless Congress votes to extend it.
Kirk Jennings is an estimator for On Top Solar Electric, a local roofing and solar installation firm. He said many customers in the area who wanted solar power have gotten it and that installation orders have slowed to a trickle.
Many homeowners were told that the utility’s solar export credit would help make installing a $25,000 solar system on their roof pencil out, he said. Now, it appears that option might be reduced.
“The math just doesn’t add up for a lot of homeowners, especially if they don’t have cash and have to finance it,” he said. “That (rate change is) going to be the nail in the coffin for solar.”
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The Summit County Council is eyeing a $9 million pool of money to aid local nonprofits and small businesses, but tax revenue is restricted in how it can be used.