Mark Chediak, Christopher Martin and Ken Wells, Bloomberg
December 31, 2013 | 24 Comments
State regulators, after two days of often contentious debate, voted to allow the state’s largest utility to charge customers about $4.90 a month for solar connections after Dec. 31 — less than 10 percent of what it was asking for.
Don Brandt, chief executive officer of APS and its parent company Pinnacle West Capital Corp., panned the deal, saying that while it nods to the impact that net metering is having on utility operations and revenues, it “falls well short of protecting the interests of the 1 million residential customers who do not have solar panels.”
Lyndon Rive, CEO of SolarCity Corp., said it was “crazy for a utility to charge for services they didn’t deliver.
‘‘Why not tax energy efficient homes, or small homes that consume less than average?’’ said Rive, whose company is the nation’s second-largest rooftop solar installer. ‘‘APS just doesn’t want to lose control.”
The battle is far from over.
On the island of Oahu, HECO is “working really hard” to find a solution to oversaturated circuits caused by the rapid solar rollout, CEO Richard Rosenblum said. The utility’s engineering studies on solar are expected to be done by March, he said.
“We see ourselves as a trailblazer,” said Rosenblum. And one of the problems of being a trailblazer is sometimes the trail is not clear.’’
Rosenblum pointed to planned HECO grid investments in smart meters and other communications devices he said that will help it speed up and smooth out the embrace of solar going forward.
Representative Cynthia Thielen, a Republican state legislator who has publicly pushed for the utility to liberalize its solar policies, is more than skeptical.
“This is a company with a drenched-in-oil mentality,” said Thielen, who has served in the legislature since 1990. “They’ve fought from day one on renewables. I look at the company as ultimately becoming obsolete unless it changes its practices.”
What’s mind-boggling to many of the stewards of America’s 3,200 utilities is how fast solar has mutated from a fringe power source to a technology being peddled today at outlets like IKEA Group and Home Depot Inc.
Sure, environmental groups like the Sierra Club are aboard. But solar is also being embraced by middle-class home owners like the Walkers, Republican legislators like Thielen and corporations like Wal-Mart Stores Inc., which expects 1,000 of its approximately 4,500 stores to be solar powered by 2020.
A pro-solar group in Georgia consisting of Sierra Club members and Tea Party founders calls itself the Green Tea Coalition.
The fuss might seem overheated based on current numbers -- solar power provides less than 1 percent of the nation’s energy needs. Yet it’s the rapid escalation of solar and the exponential long-term projections for its rollout that caused Fitch Ratings Ltd. in July of this year to warn that the solar juggernaut is “casting a shadow on U.S. utility rate design.”
Moreover, solar’s potential is coming as escalating fossil fuel prices make it competitive — even without subsidies — with conventional electricity.
That’s already occurred “at a domestic level in many countries” with some U.S. states like Hawaii and California already at or near parity and others to follow soon, according to an Aug. 8 research report by Citigroup Inc. Parity will only escalate as fossil fuels get more expensive and solar gets cheaper.
“This dynamic is not being fully appreciated in the power sector,” according to the report, written by a group of analysts including Shahriar Pourreza and Ryan Levine. “Not only does solar steal share of new electricity demand, it parasitically steals demand from previously installed generation, and does at the most valuable ‘peak’ part of the demand curve.”
As for solar’s ultimate potential, California alone could produce 76,000 megawatts of solar power -- more than the state’s total installed capacity in 2012 -- if it deployed all the rooftop solar it has room for, according to data from the Solar Energy Industries Association, a trade group.
All of which makes the fights being played out in Hawaii and Arizona pivotal -- they are certain to set the stage and tone for future battles in other states. And given what’s happened, those future fights may be messy.
Money poured in to Arizona in the weeks leading up to the November vote by state regulators on the proposed monthly solar charge. APS and its backers spent $3.7 million on an ad campaign while solar advocates mustered $350,000. Lobbyists, hired-gun activists and pollsters all waded into the fray, with ads that took on the appearance of a negative electoral campaign.
A utility-supporting group ran a 30-second television ad comparing California solar companies helping to fund the pro- solar campaign to Solyndra LLC, the Obama-backed solar-panel maker that went bust after defaulting on a $535 million federal stimulus loan guarantee.