The October 2022 issue of IEEE Spectrum is here!

Close bar

Rooftop Solar Faces Growing Opposition from Utilities

It's a measure of how strong PV is coming on that some utilities are feeling threatened

2 min read
Rooftop Solar Faces Growing Opposition from Utilities

Although solar energy is still a midget among U.S. energy sources, its rapid growth from a small base is beginning to make some of the big players nervous. Regulated utilities in a number of states—Arizona, California, Colorado, Idaho and Louisiana—have started to complain about the various benefits for photovoltaics (PV), says Mac Gunther, in a article appearing on Yale's environment360 website. Gunther, a contributing editor at Fortune, describes the position of PV in the U.S. energy mix as "puny" or "a mere blip," inasmuch as it accounted for barely one-tenth of 1 percent of U.S. electricity last year. (Coal delivered 37 percent and natural gas 30 percent.) Yet rooftop PV installations jumped nearly 50 percent last year, enough to make some incumbents seriously nervous.

Critics of solar incentives object to the whole panoply of state and Federal subsidies favoring PV, but they particularly object to aspects of "net metering," the requirement that utilities allow distributed generators like owners of rootfop arrays to sell electricity back into the grid. The subject of net metering is a complicated one. In the United Kingdom, which to a great extent inspired the injection of free-market principles into electric power systems, net metering is not generally allowed or encouraged. There, the industry has persuaded regulators that with net metering, distributed generators become, in effect, free riders—they benefit from selling into the grid without bearing their fair share of paying for its maintenance. In the extreme case, a household that always produced excess energy and never bought power from the local utility might pay nothing to support the grid.

In the United States, net metering was required by 2005 Federal energy legislation, but details of implementation vary drastically from state to state. A key issue is whether utilities are required to pay customers selling solar electricity into the grid at wholesale or retail electricity rates. As Rick Tempchin, executive director for retail energy services at the Edison Electric Institute in Washington, D.C. has put it, “Paying credits at the full retail rate costs the utility money because that cost will be higher than the cost that the utility actually avoids by purchasing the distributed generation power. For example, in centralized markets, a utility can buy all of its power needs at the wholesale rate. This rate will always be less than the full retail rate it would have to pay to buy the same power from a customer.”

In some ways, the debate over net metering is rather closely analogous to arguments that have raged in U.S. education policy over school vouchers and, more recently, charter schools. There too, critics complain that allowing parents to take their children out of public schools at public expense results in less revenue for maintenance of school infrastructure. As in the education debates, political libertarians, including some Tea Party members, tend to support net metering because it permits and encourages individuals to produce their own power. In Arizona, where the debate is unusually heated, no doubt because PV is closest to commericial competitiveness there, net metering advocates have hired Barry Goldwater Jr, the son of the late arch-conservative Arizona senator, to promote their cause. The pro-coal, anti-environmentalist Koch brothers, on the other hand, have put money into Arizona to support a website that opposes net metering.

Photo: Andy Cross/The Denver Post/Getty Images

The Conversation (0)
This photograph shows a car with the words “We Drive Solar” on the door, connected to a charging station. A windmill can be seen in the background.

The Dutch city of Utrecht is embracing vehicle-to-grid technology, an example of which is shown here—an EV connected to a bidirectional charger. The historic Rijn en Zon windmill provides a fitting background for this scene.

We Drive Solar

Hundreds of charging stations for electric vehicles dot Utrecht’s urban landscape in the Netherlands like little electric mushrooms. Unlike those you may have grown accustomed to seeing, many of these stations don’t just charge electric cars—they can also send power from vehicle batteries to the local utility grid for use by homes and businesses.

Debates over the feasibility and value of such vehicle-to-grid technology go back decades. Those arguments are not yet settled. But big automakers like Volkswagen, Nissan, and Hyundai have moved to produce the kinds of cars that can use such bidirectional chargers—alongside similar vehicle-to-home technology, whereby your car can power your house, say, during a blackout, as promoted by Ford with its new F-150 Lightning. Given the rapid uptake of electric vehicles, many people are thinking hard about how to make the best use of all that rolling battery power.

Keep Reading ↓Show less