The Sierra Club isn’t a fan of Tucson Electric Power’s proposal to do away with the state’s metering rules for solar energy—something that tells TEP to buy back, at full retail price, any excess energy that a solar customer did not use.
The utility company filed a request with the Arizona Corporation Commission a couple of days ago, arguing the changes would make monthly rates more equal for all residential customers—most solar rooftops are connected to the communal electrical grid, and TEP says the rooftop solar customers are not paying their share for maintaining the grid and other services.
TEP wants to reduce that buy-back rate by about half, according to Tucson Sierra Club organizer Dan Millis.
What TEP said about the proposal on Wednesday:
Users of rooftop solar power systems rely just as heavily on TEP’s electrical system as other customers — more heavily, even, since TEP must manage their systems’ intermittent output. But they pay far less for TEP service under current rates, due in part to net metering rules that allow them to exchange excess solar energy for free, on-demand utility power.
TEP is proposing instead to purchase excess solar output from new rooftop systems at the same price it pays for energy from large local solar arrays. The resulting bill credits would allow customers to reduce their electric bills by going solar, even as they pay the same price as other customers for the energy they use from TEP.
However, Millis said the solar industry’s approximately $34 million in net benefit to Arizona Public Service electricity customers alone outweighs the difference in rates. Also, he pointed out to a new report by The Solar Foundation that says Arizona created more than 600 new jobs in the solar energy realm. The state is third in the country in total number of solar jobs. A good thing. So, changing the net metering rules means one of the main incentives that push people to go solar would disappear. Millis calls it the backbone of rooftop solar, without the metering, “you don’t get credit for the surplus energy you produced.” If the proposal to lower that buy-back rate solidifies, getting panels will not be as good a deal in people’s minds.
What TEP had to say about that:
The impact of this solar subsidy was minimal in 2008, when the ACC approved current net metering rules. At that time, fewer than 600 TEP residential customers had rooftop solar systems and large subsidies were necessary to help customers justify the purchase of photovoltaic (PV) arrays that cost more than $8 per watt of system capacity.
PV system prices have fallen steadily since then to less than $3 per watt, driving annual increases in the installation of both customer-owned and leased PV systems. About 7,900 of TEP’s residential customers now have solar power systems, and more than 600 customers have applied already this year to connect new PV arrays to TEP’s grid.
Without changes to TEP’s rates or net metering plan, the continuation of such growth would force significant rate increases to offset increasing subsidies to users of rooftop solar systems.
“We’re exceeding our renewable energy goals, but that won’t mean much if we’re forced to compromise the affordability of our community’s electric service,” David G. Hutchens, TEP’s president and chief executive officer, said. “Our proposed net metering plan would promote both sustainable power and a sustainable electric grid.”
When the current net metering rates were established by the Corporation Commission in 2008, solar was less common, and the technology was new and needed to be developed. Now that it is more popular and affordable, “we can achieve our renewable energy goals and preserve significant bill savings for solar power users without creating unmanageable cost burdens for our other customers,” Hutchens said in a press release.
From a Sierra Club press release:
TEP’s proposal would do away with net metering for new solar customers, pulling the rug out from under the solar industry and stifling local clean energy job growth while the utility maintains a stake in out-of-state coal-fired power plants like the San Juan Generating Station.
And Millis issued this statement:
“We need TEP to put Tucson first. Rooftop solar is creating thousands of local jobs here in Arizona, saving Tucson residents and homeowners money, and providing enormous benefits to ratepayers throughout Tucson and the state. With enormous clean energy potential, we should be doing all we can to protect energy freedom and choice for Arizonans. Instead, utilities like Tucson Electric Power are holding us back by fighting local clean energy and locking our community into dirty, out-of-state coal plants like the San Juan Generating Station. TEP should invest in clean energy here at home, not fight affordable energy solutions and send more of our money out of state to fund its dirty, expensive coal plant. Our community deserves better.”
Right now, a residential solar customer saves a little more than $100 a month, if the proposals are approved, that figure would go down to $80, according to TEP.
If the Corporation Commission agrees with the changes, customers who already have solar, or get solar arrays before June 1, would not be affected.
The two are in another bid right now, involving several business and environmental groups urging TEP to pull support for the San Juan Generating Station in New Mexico.
An update from the Sierra Club:
Regulators in New Mexico will soon decide on a plan brought forth by Public Service Company of New Mexico (PNM) to extend the utility’s commitment to the San Juan Generating Station and continue burning coal for years to come. TEP owns half of one of the units of the coal-fired power plant outside Farmington, New Mexico – a unit that still requires the installation of pollution controls. TEP remains invested in San Juan, despite unforeseen cost increases and questions around plant reliability that put TEP customers at serious financial risk.
This article appears in Mar 26 – Apr 1, 2015.
“Also, he pointed out to a new report by The Solar Foundation that says Arizona created more than 600 new jobs in the solar energy realm.”
I’m sure they are a totally unbiased source. But this is about fairness in the rate structure, not a jobs program.
“So, changing the net metering rules means one of the main incentives that push people to go solar would disappear. Millis calls it the backbone of rooftop solar, without the metering, “you don’t get credit for the surplus energy you produced.” If the proposal to lower that buy-back rate solidifies, getting panels will not be as good a deal in people’s minds.”
Of course you get credit for the energy you produce. Stop lying. He even says in his next sentence, “lower that buy-back rate”; that’s different from eliminating the rate. And so what if it’s not such a good deal? Why should the rest of the ratepayers, or the taxpayers, be buying electricity for someone else?
If something needs an “incentive” (i.e. someone else’s money) to be viable, then it isn’t viable.
And just in case someone thinks this a big bad corporation (TEP or in my case Trico) trying to squash a “green” start-up industry, look at the financials of a company such as Solar City. You may find another big corporation, with a number of divisions including a “green” finance company.
The Sierra Club should go hug a tree.
TEP is responding to a threat not only to their executives’ bonuses, but to their whole cash flow structure. If more people put in solar, they’ll use less of TEP’s power, no matter how it is generated. Using less power means lower bills, which means lower revenues, which means lower bonuses. Executives hate lower bonuses.
Say, Wes, did you know Trico is a co-op? They aren’t going to squash much of anything, especially since they buy most of their power from TEP. How do I know? I have Trico, too.
TEP please keep the existing buy back program. If more people convert to roof top solar, TEP will burns less coal and oil to run its steam generators thus saving money. The power line infrastructure already exist. Wheres’ the beef? Rooftop solar energy saves TEP money.
Keep energy companies on very, very short leashes and investigate everything they do.
Ldonyo opines: “Say, Wes, did you know Trico is a co-op? They aren’t going to squash much of anything, especially since they buy most of their power from TEP. How do I know? I have Trico, too.”
Of course I know it. From your comment, “I have Trico too”, it appears that you realize that I am a member. Do you think that I’m so dumb that I do not know that it’s a co-op?
Ldonyo opines: “TEP is responding to a threat not only to their executives’ bonuses, but to their whole cash flow structure. If more people put in solar, they’ll use less of TEP’s power, no matter how it is generated. Using less power means lower bills, which means lower revenues, which means lower bonuses. Executives hate lower bonuses.”
What threat? They buy power, they send it over the grid to people who buy it for a higher price. The Corporation Commission tariffs guarantee them a profit. It’s pretty simple. They are just balking (rightfully so) at having to pay an effectively higher price for power generated in a distributed system. TEP (UES) is a publicly-owned company with stock and bond holders who expect and deserve a reward (ROE) for the risk they take in owning or loaning money to the company.
“Keep energy companies on very, very short leashes and investigate everything they do.”
Especially the fly-by-night snake o—sorry—solar energy companies.
Who didn’t see this coming? As panel size shrinks to 20% of the current size you’re stuck with those big ugly panels on your roof. Green jobs? Yeah right. Taking them down.
Feelgood ignorance still feel good?
It is clean, non-polluting energy vs. corporate profits, not to mention an alternative source of (again, clean) energy in case the big coal burning plant gets shut down. It’s smart. It’s a real back-up in case of a big emergency that works. And, if you haven’t noticed, all the big power companies around the world are installing acres and acres and acres of their own panels – so they can increase profits. That’s why they want to shut down any/all regular folks who want to do the right thing. Anyone with a brain does not see ugly – unless they have a vested interest or are shut out by the corporations. Keep incentives strong.
Sigh, so much misinformation, fuzzy thinking and gullibility to refute and so little time.
JL Curry writes:
“It is clean, non-polluting energy vs. corporate profits, not to mention an alternative source of (again, clean) energy in case the big coal burning plant gets shut down.” Quite the run-on, disjointed sentence but I’ll try to address it. First of all, there is embedded energy in the mining of materials, production, transportation and installation of solar panels. Unless the energy used to produce the panels came from other solar panels, then it came from hydro, nuclear or fossil fuel. If it did come from solar panels, then how were those panels produced? Furthermore, despite the claim, this isn’t an x versus y contest. The people making solar panels are corporations and are also in business to make a profit. The only reason coal-fired plants would be shut down is the Obama regime’s hatred of coal-fired power plants. There is abundant coal.
“It’s smart.” An opinion not shared by many who have facts at their disposal
“It’s a real back-up in case of a big emergency that works.” Another badly written sentence both in syntax and logic.
“And, if you haven’t noticed, all the big power companies around the world are installing acres and acres and acres of their own panels – so they can increase profits.” Actually, they are mandated by dim-bulb (pardon the pun) regulators to do so. If logic and free markets prevailed, all of our power would be generated by nuclear plants.
(As an aside, the Palo Verde nuclear power plant occupies about 4,000 acres and annually generates 29,200 GWh (2.92 *10^13). Using TEP’s own numbers for its 300 acre FRV Picture Rocks solar plant, 41,000 MWh (4.1* 10^10), Palo Verde generates about 700 times as much energy. Extrapolating the numbers, it would take over 210 square miles of solar panels to equal the output of Palo Verde. For reference, the area of the City of Tucson is about 227 square miles.)
“That’s why they want to shut down any/all regular folks who want to do the right thing.” More editorializing, who decides what the “right thing” is?
“Anyone with a brain does not see ugly – unless they have a vested interest or are shut out by the corporations.” It’s hard to refute this when neither of us knows what you’re talking about.
“Keep incentives strong.” I’m at a loss to know what this means.
Interesting, Wes. You sound like a shill for the power companies. I think it is easy to comprehend. I am in favor of more rooftop solar installations for the reasons I stated: it’s clean, it’s affordable and it could be a backup to our civil defenses – at least as long as the sun can shine. And if you are still “at a loss” and think that unregulated, coal-burning, union busting, trickle down capitalism will control prices and protect the air we all breathe, then I think you are just wrong.
No, sorry, not a shill for power companies. I’m actually a 70-year resident of Pima County and a retired engineer. Thus I’m interested in facts and data, not wishful thinking and hyperbole (“unregulated, coal-burning, union busting, trickle down capitalism”). Out of personal interest I started studying solar energy in the 1970s when I took a course at U of A in the subject.
I’ve owned two houses that solar hot water systems installed when I bought them and I’ve removed then both because they were not economically viable. Maintenance costs far exceeded the value of energy collected. Time has proven me correct as no one installs these systems anymore unless one of the unscrupulous companies can still find suckers. Current technology is to use a PV system to generate the power to heat water electrically. This is an “off-the-grid” use of PV. But just like the directly heated system, once your water is hot, the remaining available energy goes nowhere.
I’ve examined the cost-benefit ratio of a PV system and, for me anyway at the time of analysis, it didn’t make sense. Another analysis today might come up with a different answer. Regardless, I would not be so myopic to believe that the power company would continue to pay me more for electricity than they can buy it for somewhere else or to believe that government subsidies would continue forever.
For those people whining about the big bad power companies wanting to equalize the cost of distributed (roof-top) generation to conventionally produced energy, there is an answer. Go off the grid.
As technology improves in both PV systems and battery design and costs come down for both, the cutting edge is battery storage.
The concept of a “regulated monopoly” is outmoded at best. Especially when the regulators are indebted to the companies they regulate for campaign contributions. Since we say we are capitalists and believe in competition we should follow the lead of Germany where electric power is now deregulated and consumers have the choice of several electricity providers, that they can switch to whenever they want. This could be part of the reason that a country that gets less than 10% of the sunlight that we do has a much higher rate of home solar power.
Wes, you are pretty old (as are many of us) but still wrong. You sound angry about a free and intelligent choice in the market. Photovoltaics are now viable (even with Arizona heat and AC) and no longer cost an extraordinary amount. Those old fashioned hot water units and snakelike tubes on rooves are not. The companies that make power are obviously in the know, and you can drive past Davis-Monthan on Golf Links to see what I mean by energy independence. Their argument about the grid use has merit; batteries for good AC are a cumbersome environmental nightmare. But strangling the current residential trend smacks of corporatism without cooperation or forward thinking. I am thankful for the opportunity to have a beautifully efficient solar system. And the incentives I mentioned are still the books – for now – any reputable CPA knows. So don’t just cherry pick your “facts” and restrict freedom of choice. (out)
Being anti-solar in the southwest is incredibly short-sighted. Not only do we have more sun than anywhere else, we have more to lose from climate change.
This isn’t about money today, the percent of energy from solar is still too low to be more than a rounding error on TEP’s balance sheet. It’s about crushing alternative energy in its infancy so TEP’s cash flow is secure and industry management and stockholders can cash out their investments before retirement.
Industry groups have been meeting and this is their strategy for crushing solar. APS tried it first, now TEP is doing the same thing. It’s not a coincidence, it’s a strategy.
Google “power companies hate solar”
I feel compelled to respond to the first comment in this thread: “If something needs an “incentive” (i.e. someone else’s money) to be viable, then it isn’t viable.”
Certainly you realize that the taxpayers have been subsidizing the oil and gas industry along with the nuclear industry for almost as long as they have been in existence. If we were to level the playing field, there would be little question of solar’s viability.
Wow, some people on here are testy. I believe (perhaps I’m being presumptuous) that I’m being called “anti-solar” by one guy and “angry” and “against free choice” among I’m sure, other prejoratives, by another guy. Rather than actually reading what I wrote, people are reading what they think I wrote and going off from there.
In the interest of me getting bored with this and wanting to move along, this will be a two for one reply.
I don’t believe that I’ve ever said anything to deserve the label, “anti-solar.” Anti me paying higher taxes so you can get a subsidy for your solar system, I’m guilty. Anti belief in Pollyanna ideas about “free” energy, I’m guilty. Anti the idea that big corporate energy suppliers are
bad” while believing that big corporations who build solar systems and run finance companies to swindle their customers are “good”, guilty again. So yes, I’m anti a lot of things, but I’m not guilty of being “anti-solar.”
I’m also anti-anthropogenic climate change. Is the climate changing? Sure, always has, always will. I’m bemused by the statement that we in the southwest have more sun than anywhere else (a commonly accepted, however wrong statement) and also have more to lose by having more of it due to climate change. All of the things that worry warts worry about, melting ice caps, sweaty polar bears, etc. seem to indicate more sunshine, not less. So which is it?
And please, please, please don’t ever use a government program (DMAFB solar installation) as a an example of thoughtfulness and a justification for a free market decision where cost-benefit ratios are important. By its very nature, a government program is the antithesis of a rational decision. When you can print all the money you need, or steal it from someone else, you have no worries about costs.
I have to ask, what does, “smacks of corporatism without cooperation or forward thinking. ” actually mean? I think it means, “I believe that I’m so much smarter than you because you’re not a ‘forward-thinker’ like me and I can bamboozle you with big words.” Or something like that.
That’s a terrible way to treat a guy who helped you buy (via those incentives you mention) that “beautifully efficient solar system.”
I’m all in favor of “freedom of choice.” But what of my freedom to chose to *not* pay higher taxes and utility rates to support your subsidized solar system? I don’t have that freedom because other people decided that they know better than me how my money should be spent.
Pretty ironic; you spending my money to buy your solar system while at once decrying those nasty, greedy corporate executives who are crapping on the little guy. Pot, meet Kettle.
ps. I’m, as I has been established earlier, a Trico Co-Op owner/customer. This is not one of those nasty corporations that are trying to squeeze out distributed systems. That said, the co-op is also going to the Corporation Commission with a request to equalize rates, just like the big guys.
You cannot deny Climate Change at this point in the game. Unless you failed math in grade school and put your bibles over the Scientific Method.
The millions of solar panels are reflecting the sun’s heat into the atmosphere and causing advanced global warming. There is no denying it.
“The millions of solar panels are reflecting the sun’s heat into the atmosphere and causing advanced global warming. There is no denying it.”
Heh, heh.
Somewhere in this thread, someone said something like, “environmental nightmare”, with respect to battery storage. I have two, two-word responses to this: 1) Elon Musk, 2) Tesla Battery.
That said, those readers who believe that government(s) will protect you from big, nasty corporations by regulating them to death should note that Florida and Texas have made it illegal to live “off-the-grid.”
“That said, those readers who believe that government(s) will protect you from big, nasty corporations by regulating them to death should note that Florida and Texas have made it illegal to live “off-the-grid.””
Sorry, that got away from me while I was still researching this. Seems to be an exaggeration.