Photos by Katie Putz courtesy of RENEW Wisconsin
Solar energy is one of the brightest things going—a booming business sector spawning solid jobs, providing homeowners with local energy options, and saving the earth all at the same time.
At least that’s what people thought.
Early this year you couldn’t get much more bullish than solar, with people reporting a more than 66 percent increase in residential photovoltaic installations in 2015, enabled by a precipitous drop in the cost of technology, and projecting “staggering” growth in 2016. The federal investment tax credit, which provides up to a 30 percent subsidy on all solar projects, was extended to 2019 with some funding through 2022. Solar development even outdid the growth of natural gas, accounting for over 29 percent of new electric generating capacity installed in the United States in 2015. And solar means jobs too, employing over 209,000 workers, mainly for solar installation companies—more than currently work in oil and gas extraction.
A closer look reveals a cloudier picture, however. In Nevada, Arizona, and Florida, people are in the streets protesting new fees on their residential solar arrays. Like a bad case of sunburn, there’s a rash of lawsuits in courts around the country as consumers, solar industry representatives, utilities, and public service commissioners hash out what solar electricity will cost, and who can build, and profit from, renewable projects.
New Kid on the Grid
Why resist something that makes such good sense for the future of the planet?
Solar energy is a new kid on a block that has a long established old boy network—or grid to be more accurate. Distributed sources of energy like residential roof-top solar are introducing big changes to one of our country's most stalwart institutions: the energy utility. The only way out appears to require a lot of hands on deck—in the streets, public meetings, and courthouses—to change the rules.
There is also a lot of money at stake.
President Obama has even taken public note, describing such efforts against solar as “not progress.”
"It's one thing if you're consistent in being free market," he said at a meeting last fall on clean energy in Nevada. "It's another thing when you're free market until it's solar that's working and people want to buy and suddenly you're not for it anymore. That's a problem."
State level legislation to make solar more costly for consumers was introduced in nearly two dozen states between 2013 and early 2015. Some of the proposals were virtual copies of model legislation drafted by the American Legislative Exchange Council.
Angry solar customers from across the political spectrum have organized, accusing utility companies of serving narrow, for-profit interests, and pointing to close connections between state politics, the commissions that run utilities, and lobbying campaigns against solar. The people who sit on the commissions overseeing utility companies are elected in a handful of states but most often appointed by governors in the state.
In Nevada more than 15,000 homeowners who had invested in solar rooftop arrays, had a nasty surprise when the Nevada Public Utilities Commission, an “investor-owned utility,” changed the rules. In January the utility levied high fees and also gutted metering payments so that customers will no longer be paid for feeding the system during peak times.
“Net metering” credits solar owners for the electricity they add to the grid. If a rooftop solar array generates more electricity than the home uses, for example, the meter will run backwards to provide credit for when the home's electricity use is more than the solar array can provide—at night, for example. Any “surplus” solar electricity serves nearby customers’ loads.
One argument utilities make—and it’s an argument pushed by ALEC—is that solar users are “free-riders,” paying less into a grid that utilities still have to build and maintain. It’s true that traditional power is key for providing a steady energy supply, especially during peak times and when renewables aren’t delivering like on dark, windless days (electricity storage remains the Achilles heel of energy supply). But this free-rider argument is routinely challenged by solar advocates, who say that utilities misrepresent the numbers, pointing out, among other things, that solar installations can forestall expensive new infrastructure that may not have to be built.
Net metering, along with the savings in energy costs, is vital to the math used by individual homeowners to venture onto solar territory. Even then, solar panels are a serious investment, taking ten to twenty years to be paid for. Some states, including New York, New Mexico, and California are leaving net metering programs in place. Angry consumers in Arizona and Nevada have responded to the fees and rate changes by taking their utilities to court.
The role of fossil fuel interests in blocking solar doesn’t explain all of the resistance, however. There’s something else going on, and it involves the core mission of utilities. In a nutshell, utilities are in the business of energy distribution, and have invested in a forehead-smacking amount of infrastructure to guarantee an uninterrupted supply. And they bank on being able to sell a certain amount of electricity to customers. Distributed solar, especially individual rooftop arrays and community projects where energy is produced in lots of different places, challenge both the business model and the technical infrastructure of the traditional centralized electric utility. The complexity of merging different systems and moving toward an “energy democracy,” or at least a more flexible system is a real head-scratcher.
Utilities are strange beasts, protected from market forces and very regulated, but still subject to political winds and also beholden to investors. Most of us get our electricity from an investor-owned utility, or IOU. Electricity has been deregulated in many states, with varying degrees of success. Regulations on utilities mean, for example, they aren’t supposed to accrue profits over a certain rate, and they have to bring all rate changes before a public commission. (They have been known to abuse that power.)
Although there are over 2,000 publicly owned utilities compared to 189 IOUs in the United States (and 877 electrical cooperatives), IOUs serve some 68 percent of electrical customers in the U.S. (Publicly owned utilities serve 14 percent and co-ops 13 percent). And these businesses make a decent return for investors, including a number of retirees who like the typical reliability of utility investments.
“The utility industry is over 125 years old,” explains Charlie Higley who directed the Citizens’ Utility Board, a nonprofit consumer advocacy group in Wisconsin, for ten years. “They are heavily regulated one way or the other by different agencies, but they are also really independent. They often side with the business lobby, for example, but businesses are also electricity customers, too. So sometimes they are at odds.”
Grist blogger David Roberts points out that utility resistance to solar is a necessary outcome of the very restricted electricity market utilities operate in, and their obligations to maximize profits. He suggests, and it makes a lot of sense, that those of us interested in changing utilities change the people on public utility commissions who make the rules utilities live by. In most states (all but eleven) the public utilities commissioner is appointed by the governor.
But even in states with governors hostile to renewables, solar is making headway. And speaking of governors unfriendly to solar...
Even in Wisconsin
There’s perhaps no better indication of solar’s inevitability than the state of Wisconsin, which has been called a “black hole” and “rotten” by renewable advocates, because of its opposition to renewables. Due in part to Republican Governor Scott Walker’s efforts to thwart the new industry, growth here has been glacial.
In the last few years, wind power development in five nearby states grew 45 percent compared to only 3 percent in Wisconsin. One of the state’s largest utilities, We Energies, halted its renewable energy development program in 2011 and the state pulled back on it’s efficiency-oriented “Focus on Energy” program.
But even in Wisconsin, the scene is slowly brightening. We Energies recently lost a battle over its efforts to levy significant charges on private Wisconsin solar. The state’s Public Service Commission just approved the first solar project approved in Dane County, and it’s a community solar project for Madison Gas & Electric (a utility whose greenwash in the past has been described as “endless.”) The energy from the project will be shared by about 250 homes. Dairyland power, Alliant, and Xcel Energy are also planning some 15 new solar installations in the western part of the state, representing 21 megawatts of power.
So, with incentives still rolling in from the federal level, and net metering remaining in place in many states, more and more people are likely to put solar on their roofs or otherwise connect with it. And that means a bigger constituency willing to make phone calls, write letters, and take to the streets to make solar work.
Despite all the turmoil, solar is here to stay. In fact, the turmoil is a sign of progress in a sector that practically defines inertia.
“There is an evolution going on in the way we generate electricity,” observes Tyler Huebner, executive director of the advocacy and research group Renew Wisconsin. “It’s not unlike the shift from large mainframe computers to the handheld personal smartphones we have today. I think the energy trajectory will be similar—perhaps more slowly because of the infrastructure involved—but it will happen.”
“The ongoing question, and this is what political battles are about,” he clarifies, “is what is the role for the utilities and what do customers get to do? How open are we going to allow this market to be?”
Huebner envisions an energy production system much closer to end consumers. He sees more rooftop solar and battery storage in use by businesses and homeowners, facilitated by smart metering and other kinds of new technologies. “And utilities will be invested in all different kinds of energy,” he adds.
When you consider the dark money interfering with utility investments, tunnel vision on the part of utility commissioners, and state legislatures with a bad case of climate denial, solar has had a lot of clouds to shine through. Despite all the resistance, the appeal of a jobs-creating, climate-friendly, low-water, cost-saving energy source that promotes local self-sufficiency has created a grassroots constituency robust enough to push back against big money. Between big installations in the desert southwest, tens of thousands of solar panels dotting rooftops in sunbelt cities, and new community solar projects in midwestern states, solar is blooming. That growth is pushing the whole country toward a new way of doing business in energy.
Mrill Ingram writes on the environment, and is online media editor for The Progressive.