Skip to main content
Back to posts

How Utilities are HARMING the Solar Energy Revolution

Utilities can be harmful to the solar industryAs our nation continues to incorporate solar into our utility mix, utilities are beginning to see this as a threat to their business models and the traditional American energy paradigm. While some utility companies see the potential benefits abound from incorporating more solar into their energy resource mix, many are beginning to fight back.

Much of the debate surrounding the solar industry and its quickly growing popularity is focused on the issue of net-metering. When solar customers hook up to the grid, they are able to provide utility companies with electricity that otherwise wouldn’t be used to power their home – or at least this happens in states with net-metering programs.

Utility companies see this as a major threat. As more people continue to build distributed rooftop solar systems on their homes, people will begin paying less and less on their utility bills. The utility companies make a lot of money by incorporating grid infrastructure costs into customers utility bills, and if customers are building solar PV systems on their homes and paying little utility bills, the utility companies will have to put those costs elsewhere. Their argument is that these costs will be placed upon the non-solar owning customers who will in turn pay higher utility bills.

The Arizona Public Service Company (APS) is the utility company taking the most heat from solar enthusiasts in their attempt to stifle solar in the State of Arizona. Currently, Arizona has net-metering policies in place by which solar customers can supply the grid with excess electricity and ultimately pay less on their utility bill. In light of net-metering, APS has essentially waged a war against solar.

APS is attempting to remove the current benefits of solar such net-metering and installation subsidies. Of their many proposed options to the State of Arizona, one would put a tax on rooftop solar customers that would essentially remove any incentive to go solar.

Basically it comes down to the fact that APS has missed the bus on benefiting from solar by incorporating it into their business model and they are attempting to bring the whole system down with them.

Solar is a powerful asset for utilities and APS has failed to see this. Solar energy is an intermittent resource and because of this, cannot be used as a base load resource for electricity generation. There is a certain point where solar can only encompass X% of the utility mix (depending on the region) because the sun doesn’t shine all the time and solar also depends on day to day weather. Due to the nature of the sun, a grid entirely reliant on solar is an unsustainable grid to electricity customer. However, again because the nature of the sun, solar acts as the perfect resource for assisting with on and off peak power generation, allowing the utility companies to worry and spend less money on providing on-peak load demands.

Unfortunately, this scenario will not happen as APS attempts to harm solar.

A lot of the backlash on the solar rooftop revolution came from utilities after the Edison Electric Institute issued a report and statement calling distributed energy resources a “disruptive challenge” to investor-owned utility companies. In response, many companies targeted the subsidies, credits and incentives of solar, the way APS has. Their mission is to provide “proper customer price signals” to all utility customers.

Supporters and opponents have clearly dug in on both sides of the debate. The Vote Solar Initiative, said net energy metering will provide economic, public health and environmental benefits valued at more than $92 million a year to California utility customers. While utilities claim that net metering could cost as much as $1.3 billion a year to non-solar customers.

Per the Database of State Incentives for Renewables & Efficiency (DSIRE), 43 states plus Washington D.C. have net metering policies in place, with California and Arizona as the two largest solar markets in the country; and it is these two states that find themselves at the center of the heated battle. In a world with no clear path to 100% clean energy, these debates will undoubtedly shape the future of solar in America.

What do you think? Is there evidence to show that utilities are helping solar, or are they hindering the clean energy revolution?


For more interesting reads check out:

John is an MS candidate studying Climate Science and Solutions at Northern Arizona University.  During his time at NAU, John has worked on climate change communication and greenhouse gas inventory projects for the University and Flagstaff community.  Prior to his graduate education, he received his undergraduate degree in Environmental Geology from Murray State University.