Big
utilities enter market for small rooftop solar
By RAY
HENRY and SUSAN MONTOYA
ASSOCIATED PRESS
SEPTEMBER 29,
2015
ALBUQUERQUE, N.M. (AP) — Traditional power companies are
getting into small-scale solar energy and competing for space on your rooftop.
The emerging competition comes as utilities and smaller solar
installers fight over the future of the U.S. energy system. While the market
for residential solar power remains a financial drop in the bucket for a big
utility, the installation of solar panels overall grew by more than 50 percent
in 2014 and is on track for another record-breaking year at time when the
traditional utility business is pretty flat.
"The whole theory is you need to serve your customer or
someone will serve them for you," said Raiford Smith, a vice president at
CPS Energy in San Antonio, Texas, where 3,000 customers are interested in
getting utility-owned rooftop panels. "I think the entire market is in a
race for rooftop."
These moves may have a range of effects for customers. The
utilities experimenting in Arizona, Georgia, Michigan and Texas could make
solar more affordable for average consumers by energizing competition and
driving down prices. Some utility programs may be beneficial to people who
cannot afford big up-front investments, get affordable loans or find existing
solar leases too cumbersome.
Smaller solar companies fear the incumbents will use their power
to drive competitors from the market. After all, every time an installer puts
solar panels on a home, a utility company sells less power and makes less
money.
These experimental programs are one part of a bigger, yearslong
battle between the solar industry and utilities. Since 2013, legislation to
limit rooftop solar has been introduced in nearly two dozen states.
Some utilities like NV Energy in Nevada and PNM in New Mexico have
debated charging solar customers special fees since they still buy electricity
from the traditional utility system but end up paying less money to support
common infrastructure. Even small fees could have big consequences since the
financial decision to install solar panels can be a close call for many
consumers.
Solar panels remain pricey, at least upfront.
For example, Gregg Dufort said he wanted to install panels on his
Phoenix home but couldn't justify spending $25,000 on an investment that he
estimated would pay off in 20 years or more. He considered leasing solar
panels, but found the multi-year leases would be difficult to end if he
eventually sold or rented the property.
Instead, he became the first customer this year to lease part of
his roof to Arizona Public Service Co., which installed all the equipment at
its own cost. APS pays Dufort $360 in annual credits on his power bills.
Arizona regulators capped the pilot program at 1,500 homes. So far, several
dozen homes have been outfitted. Installations on another 500 homes are ongoing
or will soon start.
"Somebody had to figure out a way to do it because we had
this huge untapped energy source out here," Dufort said. "And the
prohibitive part of it is the cost."
APS' manager of renewable energy, Marc Romito, said the utility
will use the program to test new equipment, batteries and distribution systems.
Critics accuse APS of rigging the system by undervaluing the solar
energy, which lowers prices and makes it difficult for rivals to compete. APS
generally faces less risk than competitors since regulators grant the monopoly
guaranteed profits on all investments, including solar panels.
Southern Co. subsidiary Georgia Power started in July helping
customers interested in solar energy analyze their electricity usage. A utility
website refers customers to multiple installers, including one run by an
unregulated wing of Georgia Power itself.
Regulators will be watching to see if Georgia Power uses the
advantages of its monopoly electric business — for example, customer databases,
advertising budgets or staff — to subsidize its commercial solar venture. So
far, no formal complaints have been filed.
In Michigan, Consumers Energy is asking that it get paid a
referral fee anytime it successfully connects a customer with a solar
installer. It's also offering financing for solar projects through a bank that
specializes in home-improvement loans.
Bradley Klein, an attorney for the Environmental Law and Policy
Center, said there should be a way for Consumers Energy customers to share
their electrical usage data with any solar installer, not just those selected
to participate in Consumer's program.
"As these
markets are opening. We want to make sure there's full and fair competition and
there's not an unequal playing field," he said.
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