Utah Net Metering Changes: Why Solar Companies will Still Thrive
The last and greatest of a free market’s purposes is to deliver the right solutions to those who demand them. Therefore, as nonrenewable energy resources become increasingly scarce and susceptible to higher prices, the solar industry and residential solar prospects should remain undaunted by Utah’s minor changes in solar incentives. Contrary to uninformed opinion, Utah solar companies have reason to rejoice. So do those considering going solar in the state of Utah, despite the recent changes to net metering.
The State Public Service Commission has only slightly reduced the rate at which Rocky Mountain Power credits Utah homeowners with solar arrays for the excess energy sent back to the grid from their homes.
Yes, net metering is now gone, but the savings of going solar have not been erased; they’ve merely been reprocessed, and, as mentioned above, only slightly reduced.
Today, there is still what equates to a nearly 10 cents per kilowatt-hour credit for residential rooftop solar users, and this rate of return will last until at least 2020. Additionally, Utah solar customers will receive a credit for excess power they send to the grid at 90 percent or more.
Utah citizens grandfathered in to the existing rate framework prior to November 15, 2017 will still receive 100 percent, 1:1 credit for any power sent back to the grid until the end of 2035.
The Environmental Powers That Be Will Always Back Better Utah Solar Policy
In order to instrument a greater tax credit for prospective and existing solar users in the future, Utah-based environmental advocates and organizations have joined forces to instrument an overwhelming body of research-based evidence for the value of Utah solar companies.
For instance, HEAL Utah, one of Utah’s foremost environmental advocacy groups, plans to find new ways of measuring the positive impact that solar power has on the state of Utah.
This environmental entity and others like it have an impressive track record for enthroning solar solutions in the Beehive State, and will likely provide solar panelists (no pun intended) at important solar hearings with an overwhelming amount of evidence justifying residential solar in the state of Utah, therein increasing the solar surplus credit Utah homeowners with solar arrays can expect to earn.
And, although we compete with one another, Utah solar companies share one unifying goal: to make solar energy a viable solution for Utah homeowners and in Rocky Mountain Power’s greater service territory.
In this respect, net metering plans in 2018 are not all bad—they clarify public understanding and safeguard Utah solar advocates against claims that may be construed as misleading by solar companies not communicating clearly with their prospects and the general public.
Once all parties involved have an understanding of the solar market’s territory, a greater step toward even more sustainable rooftop solar for Utah homeowners will not just be made possible, but more worthwhile than ever.
In contending with a new legislative framework adding new contours to the energy industry across the Intermountain West, Utah solar companies like us want to be objective in explaining the realities of solar solutions to prospective buyers. However, this objectivity is not bad news to those interested in going solar.
There are still benefits to going solar in Utah, and there will be for the foreseeable future; these benefits also extend beyond financial incentives.
However, in clarifying the recent net metering agreements, we also want to detail what net metering changes mean for Utah residents in 2018.
Although the solar industry is becoming more complex in the Intermountain West, the benefits of solar panels for Utah homeowners remain undaunted by minor setbacks, and as traditional energy methods become scarcer and will only be made available at higher prices, rooftop solar may become an even stronger savings method for Utah homeowners in the long run.
Essentially, no net metering changes or alterations to the industry’s economic infrastructure will change the realities of nonrenewable energy resources, which are positioned to skyrocket in the near future.
As a Utah-based solar company, we don’t want Utah citizens’ confusion to keep them from partaking in the numerous environmental, lifestyle and energy consumption benefits that solar-powered homes bring to the Beehive State.
One thing that may put solar prospects at ease is the understanding that solar power isn’t a negative for Rocky Mountain Power; Utah homeowners with rooftop solar can deliver excess power to those nearby at a far more efficient rate than electrical currents sent from over 200 miles away, and Rocky Mountain Power won’t turn a blind eye to this fact as it strives to serve its customer base.
A Review of the Current Net Metering Agreement from the Utah Solar Energy Association
Utah solar companies want solar and energy in general to remain affordable for all interested parties and to preserve the strong solar economy in the state of Utah, which currently employs over 5,000 citizens in its solar industry.
Additionally, and perhaps even more importantly, we want Utah consumers to have a choice about the way they consume energy, and be educated on the various components of their available options.
Here are the major components of the net metering agreement as it was outlined by the Utah Solar Energy Association.
Export Credit Proceedings
This is a fancy term for Rocky Mountain Power giving the solar industry another fair shake as it ascends upward.
The export credit proceedings served (and will serve) to determine the value of rooftop solar energy exported to the grid for further use.
Utah solar companies and their potential prospects should know there may be enhancements in the form of credit upgrades, which could include the use of better inverters, load controls, electricity storage and more that could financially incentivize solar power in the near future.
These proceedings will also strive to determine the appropriate measurement intervals to gauge power value.
Utah Net Metering Changes – Looking at Programs
Utah homeowners who produce excess power from their solar panels will continue to be reimbursed by Rocky Mountain Power for sending excess power to the grid, adding “fuel” to Rocky Mountain Power’s resource pool.
That’s the benefit that comes with generating power from the sun—a resource that burns brightly and enduringly enough to sustain all the energy on Earth—so long as we let it.
That is, at its essence, the purpose of net metering; it serves as a means for both the utilities companies and Utah solar companies to reach an agreement on the transmission and disbursement of electrical power, even if there is dissension on how that power should be harvested.
Although there is some confusion over savings associated with net metering programs and the possibility of them making solar “free,” do know they don’t mean solar customers will never have a power bill again.
With solar panels you will certainly be more energy efficient, but if you consume more energy than you produce, you will still have a power bill, albeit a much smaller one.
If Utah homeowners produce more power than they consume in a year, they will spend zero dollars on power, and the savings will go back to the grid to be used as the energy companies wish.
Essentially, the net metering agreement doesn’t pay the customers of Utah solar companies, but it does reduce expenses for those who produce excess power (which is the case for many Utah homeowners).
New Utah Solar Panel Laws: Net Metering Cap Date and Measurement Intervals
November 15, 2017 signified a beginning for new Utah solar companies incentives to customers.
Between 2035 and the aforementioned date in 2017, Utah homeowners with rooftop solar arrays will receive 1:1 export credits for all the solar energy they shoot back to the grid.
These credits will be measured in the time frame of 15-minute intervals. Although savings will still accrue under these conditions, they will be more difficult to measure, obfuscating, to some degree, the cost savings solar systems will invariably produce.
It would be more viable for the intervals to be measured in timeframes commensurate to the administration of power bill disbursement—at a monthly frequency, for instance.
NEM customers are those who had applications for Utah solar companies service submitted before November 15th, 2017. The installation of the solar system itself does not have to be completed by November 15th—just the application.
Utah Solar Companies Weigh in on the Net Metering Settlement
Obviously Utah solar companies would like for non-solar users to subsidize Utah homeowners with solar panels. But we also realize this reality is several years into the future.
While Utah solar companies are relieved that existing solar customers won’t be affected and future customers won’t be drastically impacted for the next several years, the arbiters of solar solutions in the Intermountain West have a grander vision for the future of rooftop solar in the state of Utah.
After all, the energy settlement received recognition from a broad range of Utah solar companies. Initiated by Rocky Mountain Power’s Net Metering update, the net metering agreement became top of mind for this utility company for a very specific reason.
Utility companies are understandably unsure about how homeowners with solar panels should be compensated for using renewable energy resources to power their homes, as change as transformative as the shift to solar energy oftentimes engenders debate and policy reformation with consequences of both unintended and intended varieties.
Utah citizens who send a surplus of clean energy back to the grid through their solar panels enlarge the pool from which utilities companies can source energy to other homes.
The purpose of net metering is to take a monthly utility bill for a solar-powered home (yes, going solar doesn’t eliminate your entire utility bill, but it does drastically reduce it) and have the cost of the bill prorated commensurately for the amount of energy the solar panels have collected that can be redistributed back to the grid for further use.
Essentially, it’s a means for solar companies and utilities companies to help each other out as much as possible. Although there’s some dissension from utility company to solar provider, both entities need each other despite competing interests.
In result, utilities companies are arguing that Utah solar-powered homes aren’t paying enough for their use of the grid system because the additional costs are being tacked on to the bills of traditionally powered homes.
An Economic Eclipse of Solar Power Will Never Happen
Although this is correct, there are two sides to every story. When new energy innovations galvanize change, the market traditionalists will always fear obsolescence.
We needn’t look further than the advent of cell phones to see how history will likely repeat itself as innovation grows in the energy market.
For instance, telecommunications looked at the advent of cell phones as a “not-so-noteworthy invention,” when it was really cause for fear and change to those holding the status quo together at that time.
Viewed merely as a hiccup in the telecommunications industry’s set ways, telecomm executives dismissed the plan, later feeling foolish for not having given more attention to the industry changes cell phones brought to the table. More specifically, the missed opportunities to capitalize on a new wave of communication in the market left many dissatisfied with their reaction to the industry’s change.
Where would we be if cell phones had been squandered by a status quo? We all would have lost the connectivity we know today, and solar power’s future will unfold in a similar fashion. At some point, lower costs and better innovation will always win in the market, and ephemeral changes in rate structures can’t change this.
But the movement toward renewable energy and solar-powered homes in Utah has too many benefits to deny, and it will always prevail in one way or another—especially as the cost of traditional utilities rises.
And the costs will go up due to fundamental economic principles.
When an item is subject to economic scarcity, such as coal, which accounts for 39 percent of America’s electricity production, the costs will go up increasingly to sustain traditional energy vendors’ operations as the product becomes increasingly scarcer.
Utah solar companies may compete for business, but they are in agreement on one thing—that any legislative changes to net metering should only be made if they calculate the true value of solar. Any other outcome is a step in the wrong direction.
Scott Cramer is president of Go Solar Group, a Reno Nevada Solar Company.