Pennsylvania

Energy. Environment. Economy.

Solar advocates decry PUC decision on net metering

Tim Johnson poses for a portrait with solar panels on his roof  in Philadelphia, September, 2011.

Matt Rourke / AP Photo

Tim Johnson poses for a portrait with solar panels on his roof in Philadelphia, September, 2011.

Solar energy advocates say a recent decision by the Pennsylvania Public Utility Commission will stifle alternative energy growth in the state. But the PUC says the decision was a compromise between two conflicting state laws.

In Pennsylvania, anyone who puts solar panels on their rooftops can sell extra energy they don’t use back to utilities. This is referred to as “net metering,” because the owner can reap the net benefits of what they use versus what gets put back on the grid.

State law limits individual solar arrays to 50 kilowatts of generation. Utilities are required to buy back excess power at the retail price, which is what consumers pay for electricity. That retail price is higher than what the utilities typically pay on the wholesale market. Pennsylvania also has laws that require utilities to purchase power at the lowest available price, according to Nils Hagen-Fredriksen, spokesman for the PUC.

The Public Utility Commission ruled last week that going forward, residents interested in installing new rooftop solar panels could be limited by the building’s historical usage. Utilities pushed for this change, saying that the higher retail price earned by residential solar producers gets passed down to consumers. They asked the PUC to limit the size of rooftop solar to 110 percent of a facility’s historical usage. But the PUC says they struck a compromise at 200 percent, or the statutory 50 kilowatts, whichever is lower.

“So coming to some form of balance between the desire to promote more renewable energy, but at the same time, to prevent the consumers of Pennsylvania from paying artificially inflated prices for power, the commission reached a compromise,” said Hagen-Frederiksen.

Solar advocates worry this will prevent new installations, and make it harder to reap the upfront investment costs paid by homeowners.

Kurt Limbach has solar panels on several of his properties. He says he doesn’t buy the PUC’s argument.

“This isn’t about an analysis of how it hurts other players,” said Limbach. “It’s just their way to knock solar off the roofs of Pennsylvanians so the fossil fuel people can keep polluting and having money shoveled their way.”

Limbach says he invested $100,000 to install solar panels on his barn in Westmoreland County, which earns him about $500 a year in energy sold back to the grid. Limbach’s current installations will not be affected by the new net metering rules.

PennEnvironment’s David Masur says the PUC overstepped its authority with the rule making.

“[This will] stifle everyday people and keep us addicted to dirty fossil fuels,” said Masur. “I don’t see any compromise. I just see something the utility companies love. They want to keep people on their systems and that’s not good for people who want to produce their own clean energy.”

Masur says there’s a backlash against solar happening all over the country. Nevada recently decided to phase out its state solar credits, while California regulators debated, but in the end agreed to continue that state’s net metering.

“The traditional energy suppliers feel threatened because green energy has gotten a toe hold,” he said.

Comments

  • paulroden

    Limiting the amount and rate, roof top solar producers can sell back to the electric grid is just an attempt by the dirty, greedy fossil fuel, nuclear power and centralized, for profit electric utilities to stifle renewable energy. I thought they all believed in the unregulated, “invisible hand of the free-market?” Imagine millions of homeowners, businesses and municipal government buildings all producing electricity. The grid would be more resilient and more decentralized. We would have to have a combination of pumped hydroelectric storage, iron-chromium flux batteries, wind farms,hydrogen extraction and storage for for fuel cells and other battery storage for cloudy and windless days. We have the technology and the plan to transition to 100% renewable energy now. Go to thesolutionsproject.org/ All we lack is the political will because the greedy, dirty fossil fuel industry has bought all of our elected leaders, from both parties in state and Federal government. We will not “starve and freeze in the dark” nor “wreck our economy” by transitioning to renewable energy. Just look at Germany. If they can do it, we can do it.

    • http://gofundme.com/h61i24 gulagPittsburgh

      I agree totally. Of course, the corporate argument is hypocrisy, as usual by the fossil fuel polluters. As a country, not just PA, we should be promoting and subsidizing solar power and other forms of renewable power at every opportunity, and to the fullest amount and price possible. Especially in sunny climes, there should be solar panels on every rooftop. Think how many jobs would be created to build, install, and maintain the panels, while cutting greenhouse gases. WIN WIN WIN.

    • bill

      If the utility company paid to build out and maintain the grid distribution system, shouldn’t they be compensated for allowing solar or wind power to ride their wires? I have an electric car. Should I be allowed to ride the Turnpike for free? May be a bad metaphor but you get the point.

      • rn

        Utility didn’t pay to build out the grid; they passed the cost on to you and me to pay. By law, they make their money on the capital invested in the grid (which is why they always want to build more), but it’s my capital.

        • bill

          They passed those capital costs along to ratepayers. If you go solar or wind at home you are no longer a ratepayer. Furthermore, the commercial solar and wind power generators never paid rates but now get to use the grid highway for free. That’s the issue at hand here. If solar and wind ever replace fossil, who maintains the fossil built lines?

      • Paul Rizzo

        Same story different state

        Socialize the cost and privatize the profits

        • bill

          But there are no “profits” in a business sense. The homeowners gets cheaper electricity.

    • bill

      Sure, it works for Germany at $28.68 cents/kwh. We pay around $7 cents/kwh.

  • Paul Rizzo

    Utilities do get all they are doing is forcing people to get batteries which makes them even more independent? Talk about fools. Utilities fail to mention that they take that solar energy made for free by Bob and sell it to his neighbor Jim for the full price.

    They leave out that the energy does not even have to be transmitted very far so they actually reap a profit. PUC’s are shockingly stupid when it comes to very simple stuff like this. It is very sad. Go look at campaign contributions to those PUC’s or who they hang out with on the golf course and you will find out the real story.

    Anyways what will happen is people will install batteries and all that power from solar the energy companies are getting will go bye bye.

    • bill

      Campaign contributions? PUC Commissioners don’t run or campaign for the positions. They are appointed.

    • Randell Jesup

      Batteries are very expensive compared to the grid – and almost by definition, anyone who’s over 200% of “historical” wouldn’t have much use for excess power storage (presuming this is on a yearly basis – and batteries for storing more than a night’s (or at most a couple of cloudy day’s) power would be insanely expensive. Perhaps needed if you are truly way off the grid, but not economical (or close) elsewise.

      I think they’d do more overall good forcing utilities to buy more “green” energy; the market for those collapsed as solar prices went down and industrial-scale operations fought to supply them – including from neighboring states. Those could make solar economical for a much wider range of homeowners, even with a 200% cap (even with a 100% cap). I don’t need to make a profit selling power to the utility; I’d be happy even breaking even given how much electric I use due to an old, leaky house with ~80 windows; many large, and (reasonably modern) heatpumps (+ woodstove) for heating.

      A higher output would bring in some cash — but also would require a large outlay of capital.

  • sowhat

    The only way to truly “stick it” to the utilities is to go completely off grid. I sure hope the battery technology is good enough in the next 10 years to do so.
    The utilities may be winning battles. But they will ultimately lose the war.
    If utilities were smart, they would invest in clean energy and have people sign up to use the grid powered by clean energy.

    • bill

      There are utilities offering “green power”. It costs about a third more. Needless to say they’re not doing great business.

      • sowhat

        I have it where I live. I am 100% on it. (You can choose what percentage to use.). It costs me a whopping $4 more per month. Yes….four dollars.

        But I guess most people want their one extra Starbucks coffee per month than to try and make a better future.

        • bill

          I don’t know your power consumption numbers but the average PA residence uses about 1000kwh/month. A 24 month fixed rate can be found at 6 cents/kwh for a bill of $60.00. A similar green offering is 9 cents/kwh for a bill of $90.00. For most, $30.00 extra a month is cause for rejection of green power.
          I’m not for or against, only pointing out the economics.

          • sowhat

            Mine is about 400 kwh/month but I also made a point to put in high efficiency lighting and central AC, new windows, etc.

            My utility charges an extra 1 cent/kwh.

            People can also choose how much of a percentage of their bill would use the green energy option. Anywhere from 0 to 100% or by “blocks” of energy for a fixed cost regardless of amount used. I can see where $30 may be prohibitive for many. But they could choose even just $5.00 per month to help show an interest. And perhaps the costs would come down over time.

          • bill

            An extra penny per kwh would be cool but not every utility offers that. Also, so many people got burned by choosing the variable rates (one month teasers) that they shy away from the choice market altogether. I guess my whole point is that it’s coming, just not tomorrow as some seem to think is possible.

          • sowhat

            Utilities are going to continue to do what they do…unless they are pressured by the public.

    • btc909

      But that won’t be enough profit to cover the pensions, heath care, and excessive number of useless employees.

  • hmontaigne

    Sure, this attack on solar is one of ALEC’s goals. Check it out. If it’s for the common people, they’re against it. Fortunately some big corporations have dropped their membership in ALEC. Let’s hope the attrition continues.

  • btc909

    These lazy bastards don’t want to spend the money to upgrade the transformers. Existing transformers were not intended to receive large amounts of electricity. Plus less use equals less profits.

  • Frank

    This is a perfect legit compromise, it keeps the balance and encouages self consumption.

    I’d like some real world examples of what 200% looks like, but it seems reasonable to me in exchange for getting full retail as payment.

  • Bill Apostolacus

    Just wait until they feel the effect of the no cost solar options that are current being offered in the PECO service area by companies like Vivint Solar. It has changed the electric landscape in NJ, NY, MA, MD, CA, HI, And AZ.

  • Randell Jesup

    I think they’d do more overall good forcing utilities to buy more
    “green” energy; the market for those credits collapsed as solar prices went down
    and industrial-scale operations fought to supply them – including from
    neighboring states. Those could make solar economical for a much wider
    range of homeowners, even with a 200% cap (even with a 100% cap). I
    don’t need to make a profit selling power to the utility; I’d be happy
    even breaking even given how much electric I use due to an old, leaky
    house with ~80 windows; many large, and (reasonably modern) heatpumps (+
    woodstove) for heating.

    A higher output would bring in some cash — but also would require a large outlay of capital. Right now, with the credits basically worthless last I checked, the payback period is almost infinite

About StateImpact

StateImpact seeks to inform and engage local communities with broadcast and online news focused on how state government decisions affect your lives.
Learn More »

Economy
Education