As the cost of solar power drops, more consumers find that they hold the upper hand as utilities fight to maintain paying customers and the relevance of the grid.
By David Biello
Americans have begun to battle over sunshine. In sun-scorched Arizona a regulatory skirmish has broken out over arrays of blue-black silicon panels on rooftops, threatening the local utilities that have ruled electricity generation for a century or more. With some of the best access to sunshine on the planet, Arizona boasts the second-most solar power in the U.S.—more than 1,000 megawatts and counting. The state hosts vast photovoltaic arrays in the desert as well as the nation’s first commercial power plant with the technology to use sunshine at night—by storing daytime heat in molten salts.
In terms of infrastructure, such big solar fits as comfortably as a coal-fired power plant in the traditional electricity business model, which involves large plants transmitting electricity over a grid of conducting lines through transformers and into individual homes and businesses. The trouble, from an electric utility’s perspective, is the tens of thousands of Arizona’s total of three million or so homes that have installed small solar: photovoltaic panels made from wafers of semiconducting material, typically silicon, that use incoming sunlight to create an electric current. With these homes making their own electricity, utilities lose their most lucrative customers and confront a dwindling base over which to spread big infrastructure costs, like building new power plants or maintaining the grid. “The net-metered customer does not share equally in the overhead costs associated with the grid or other services provided by the utility, producing a very substantial ‘cross-subsidy’ funded by all other utility customers who must pay proportionately more,” wrote James Hughes, CEO of solar panel maker First Solar, in an op-ed in support of the utility Arizona Public Service Co. (APS) position this past June.
These homeowners have installed photovoltaic panels on their rooftops with the help of cash incentives and a state law that requires the local electricity provider—APS—to buy any excess power produced by an individual home. Such “net metering” programs allow homeowners to zero out monthly or even annual electric bills. That means APS gets nothing from these former customers, and their number is growing. More than 15 rooftop arrays go onto Arizona homes each day, according to the Phoenix-area utility, and the number of such solar independents grew from 4,770 in 2010 to 14,524 in 2012.
In response APS and other utility companies across the country have launched a propaganda war against an energy source that still accounts for less than one quarter of 1 percent of U.S. electricity. In Arizona that fight became very public in 2013, as APS took on such residential solar power in a television ad campaign and mailings. But the utility met resistance from a coalition of liberals and libertarians decrying monopoly or wanting to help cut greenhouse gas pollution. The red on the map that shows the amount of incoming sunshine available in most of Arizona might just as well stand for the bad blood spilled between solar homeowners and the local utilities.
It’s not just Arizona. More than 40 states allow property owners to sell excess energy generated by solar panels onto the electric grid, and many utilities must pay a premium for this resource. Utility companies warn that the lost revenue from solar-powered costumers will necessitate price increases for people without solar panels, because the electric grid and other critical infrastructure must still be maintained. That’s a sticking point for residents like Alicia Roll in Phoenix, who wrote in her complaint to the state: “I’m all for helping preserve the environment but there must be a fairer way of going about it all.”
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