The battle between solar advocates and the utility industry over solar fees came to a head recently in Utah. The crux of the issue is that utilities no longer make as much money off customers who go solar. As more customers go solar, their argument is that the fixed costs of maintaining the grid gets shared among a decreasing number of non-solar customers, increasing costs for everyone else. In response, the utilities tried to charge a $4.65 monthly fee to customers who had gone solar. Currently, Arizona and Georgia have such fees.
Fortunately for solar owners in Utah, the Utah Public Service Commission rejected the bid to levy this additional fee on solar owners. This is a big win for the solar industry in Utah, but this battle is one that is being waged in every state making the transition to solar in the U.S. It is a huge threat to the business model of the utility industry, particularly as solar becomes more mainstream.
Solar advocates argue that the fees ignore the benefits of having more customers with solar systems including the fact that solar generates at peak demand when costs are highest for the utilities. It allows the utilities to avoid the fixed costs of turning on additional generating facilities to meet peaks in demand by leveling off that demand during mid-day hours when air conditioning units are at full tilt and energy consuming factories and businesses are maxing out their usage.
Though Rocky Mountain Power presented a case of the lost revenue from solar customers, it seems the utility was unable to convince the Utah PSC that the lost revenue outweighed the cost savings and other benefits of bringing on more solar customers. Much of the early analysis that was presented was focused on lost revenue, but solar advocates have argued that energy efficiency programs do the same.
Either way, the utility industry is grappling with some major changes ahead in the near future as the current model needs to adapt to a world where the majority of customers are using cheaper, cleaner solar energy, combined with energy efficiency measures that are reducing the demand for their traditional, dirty energy services. While many are resisting this change, there are some promising signs that utilities are adapting, most notably in California where many utilities are funding the solar leasing programs run by firms like Clean Power Finanace, SunRun and SolarCity.