Solar Interests, Utilities, State Regulators Join to Pursue Clean Energy

Even with the degree of uncertainty in the future promotion of renewable energy by the federal government, sparks of clean energy growth are continuously appearing in states across the country. Political, business and consumer leaders are working together at the state level to move their constituencies away from the archaic status quo pushed by legacy energy interests that have yet to embrace the new energy future and are driven by what some jokingly call “100-year business plans.”

Forward-thinking policy makers are recognizing that clean energy in this country has moved well beyond the tipping point, and it is fast becoming the chosen means to meet our nation’s future energy needs. In 2016, the addition of new wind, solar, biomass and geothermal power-generating capacity was nearly twice as much as that brought online by the construction of power plants fueled by natural gas and coal.

Reinforcing the move to clean energy are the economic benefits derived from renewables. An analysis of 2017 DOE jobs data shows that across the energy sector, the clean energy industry employs far more American workers than the fossil fuel industry, by a margin of more than 2.5 to 1; and they outnumber all jobs in coal and natural gas by 5 to 1.

We also saw in February that investments in clean energy continue to surge. sPower, a leading independent power producer that owns and/or operates more than 150 utility and distributed electrical generation systems across the United States and the UK, was sold to AES, one of the world’s leading power companies, for $1.6 billion, making it one of the biggest deals in green energy history.

The progress toward a cleaner energy future is manifesting itself on a number of fronts, but among the more visible policy arenas are states where regulators, legislators, the solar industry and even many utility leaders are making efforts to better accommodate the growing reach of distributed solar generation, mostly in the form of residential rooftop systems.

Net metering – the practice of homeowners selling the excess electricity they generate from their solar panels back to the utility – has been the source of testy debates before state public utility commissions, as well as sparked some lawsuits. Some utilities have argued that customers with solar systems are not paying their fair share of the fixed costs of infrastructure maintenance and other grid support services, thereby increasing the financial burden on non-solar ratepayers. Solar interests say residential installations actually provide a net benefit by reducing the need to construct or purchase more power sources, cutting electricity prices for all by reducing peak demand on the grid, as well as improving air quality and public health through avoided fossil fuel emissions and associated social costs.

Those debates continue in some states. The legislature in Indiana, a state powered largely by coal, is considering a bill that would phase out net metering compensation, and Missouri lawmakers have legislation pending that would allow utilities to impose a stiff monthly fee on solar customers. Furthermore, the Arkansas Public Service Commission will soon consider replacing traditional net metering with a rate structure that reduces the value of private sector investments in clean energy. Each are considerable threats to solar users and any additional growth of solar in the two states.

However, there are other examples that are better reflective of the growing collaboration among regulators, utilities and solar advocates in states across the country – from New York to Colorado to California – including recent developments in Nevada and Arizona.

In Nevada, the Public Utilities Commission (PUC) is giving some 8,000 customers with applications for rooftop solar systems until July 1st to opt into net metering rates. Considering that 17 months ago, the PUC voted to end net metering, the latest announcement by the state represents a major solar-development turnaround. That PUC vote in December 2015 prompted a national controversy, as well as the loss of jobs in Nevada and the replacement of two PUC members. But last September, the commission voted to restore net metering to existing solar customers, and later, the PUC, NV Energy, SolarCity, Sunrun and other installers reached an agreement to allow the customers with active applications to opt into the net metering rate.

Last year regulators in Arizona voted to end net metering, but the course on solar remuneration has changed just in the last month. With the help of regulatory staff, the state’s principal utility, in collaboration with solar energy, consumer and environmental interests, filed with the Arizona Corporation Commission a proposed settlement on net metering that could end more than five years of acrid debate. The settlement calls for the rate of compensation paid to rooftop solar customers to drop slightly from retail rates, and will grandfather for the next 20 years existing solar customers and applicants who file before a decision is reached. Owners of new solar systems would see the compensation rate gradually drop.

The kind of collaborative work being done by regulators, solar interests and customers in Nevada, Arizona and other states is producing opportunities for renewable energy growth, and demonstrates the strong willingness of the players to cooperate over tough issues. We commend these interests at the state and local levels for doing the hard work necessary to keep the nation moving toward a clean energy future.

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