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Energy Chief: Be Mindful of Customers' Investment in Solar |
Energy chief: Be Mindful of Customers' Investment in Solar
Ryan Randazzo, The Republic | azcentral.com 6:14 p.m. MST December 12, 2014 -- U.S. Energy Secretary Ernest Moniz said that utilities need to be aware of the "sunk costs" that homeowners have invested in solar power as
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Salt River Project is the latest utility to propose significantly higher charges for customers who generate a portion of their own electricity with rooftop solar.
The company suggests changing the rate structure on solar customers so that they pay about $50 more a month, which SRP officials say is necessary to cover their use of the power grid at times when they are not generating their own power.
SRP has about 12,000 customers who already have solar, and the utility is proposing to keep them under the current rate structure for 10 years before imposing the new fees on them. A final decision is expected from SRP Feb. 26.
Moniz, in Arizona for a visit to Arizona State University, was hesitant to wade into any particular utility's rate decisions.
But he did say that as utilities restructure their rates to accommodate solar, they need to be aware of the customers who were early adopters of solar who are facing rate changes.
"Sunk costs are always critical," he said. "Historically, that discussion of sunk costs has come from the utilities. But there are sunk costs on the other side, too."
As Energy Secretary, Moniz pointed out that he has no authority over local rate matters. But the U.S. Department of Energy has been focused on encouraging the rapid adoption of solar and other renewable energy across the country, and Moniz said he hopes to see that continue.
"Distributed generation is challenging to traditional utility models. We need new business models as we have new architectures," he said. "How do we assign legitimate costs and savings across the system? And how do we incentivize the deployment of clean energy in a way that reflects the future we need to get to that is low carbon?"
He said it is "self-evident" that a utility provides a benefit to solar customers by connecting them to the power grid.
"That obviously has a cost and a value to the customer," he said. "It is also the case that the customer with (solar) can provide benefits to the (utility) system."
He acknowledged the sometimes intense debates between solar providers and utilities on the subject.
"Sometimes it's been more heat than light in the discussion," he said.
"We need to get to a regulatory regime that has appropriate costs and savings," he said. "And how you get from here to there is critical."
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