Armed with a net-metering agreement and enough grid-tied solar panels, you could literally eliminate your monthly electricity bills. Poof! Gone. But, as this story from KMGH Denver demonstrates, you’d still need the utility’s infrastructure to make the arrangement work.
Solar energy customers are worried a new fee proposed by Xcel Energy would punish new customers for getting solar panels. The monthly fee, which would pay for distribution and transmission of energy, would go into effect in April 2010 and would have to be paid to Xcel, regardless of whether the solar customer used any electricity that month. Customers who got solar panels before April 2010 would not have to pay the fee.
So what’s going on here? From the customer’s perspective, it seems unfair that they be charged — even in those months where they, in effect, don’t buy any electricity from Xcel. Indeed, the main motivation behind installing solar panels is the desire to minimize monthly payments. With this achieved, some Colorado solar panel owners are, understandably, balking at the additional fee.
Now for the other side of the argument. Even if their monthly energy usage nets to zero, solar panel owners still make use of the electrical grid and associated infrastructure: during the day, for example, excess electricity from the panels flows into the grid, crediting the owner’s utility account; and at night, when the panels are idle, the customer draws power just like anybody else. Solar panel owners should, Xcel maintains, be charged accordingly. Hence the proposed fee for “distribution and transmission” of energy.
Tom Henley, an Xcel Energy spokesman, initially told 7NEWS that implementing the fee would level the playing field for electricity users who are currently subsidizing connectivity fees for solar users, who sometimes use no electricity in a given month and therefore, pay no electrical fees.
“We just don’t think it’s fair that customers that don’t have solar panels on their homes should subsidize these solar panel customers any further,” said Henley.But when pressed, Henley admitted that currently, no Xcel electric customers pay extra to fund solar connectivity fees. In reality, Xcel absorbs those fees. The money from the proposed fee would not go into the pockets of electric customers, but would go back to Xcel. Henley said the fee is a preventative measure to ensure that, down the road, solar customers do not get free rides.
“What we’re looking to do is stop that, avoid that occurrence from happening,” he said. …
In an e-mail, Beth Hart, the executive director of the Colorado Solar Energy Industries Association (CoSEIA), called the fee a “misplaced charge,” and said, “What Xcel didn’t include in their cost analysis were the benefits of PV (photovoltaic) to the electrical grid.”Henley said the fee would add up to, on average, about $1.90 more per month than solar customers currently pay.
But Ferguson [a solar energy consultant], and members of CoSEIA, worried that the fee would be much higher.
Judging from the “comments” section of the KMGH story cited above, there’s a strong temptation to view the impending confrontation between solar advocates and Excel as a case of corporate greed. (One commenter sarcastically notes, “They’ve got to pay those executive bonuses somehow.”) I think the reality of the matter is far less controversial. After all, Xcel already runs one of the country’s most prominent utility-sponsored solar rebate programs. My guess is that, in the end, a fee will be levied, but that it will be constrained by the Public Utilities Commission.
Note: A public hearing on the matter is scheduled from 4pm to 6pm on Wednesday, August 5. See the PUC website for details.
UPDATE: As relayed by Russel Gold at Environmental Capital, Xcel has withdrew its request for a hike in fees, dealing a blow to my previous hypothesis:
The proposal was short lived. On Tuesday, Xcel backtracked and withdrew their request for a new fee.
Here’s how the company explained itself in a press release: “We made this proposal in good faith as a reasonable approach to provide for a fair allocation of costs and benefits between customers with solar panels and customers without solar panels. However, we appreciate that the proposed rate mechanism has caused significant customer confusion.”
What Xcel saw as customer confusion, others might call customers getting upset. The Colorado Public Utility Commission received 76 emails in the last week against the idea.
Very interesting article regarding the proposed fee in Colorado. Let’s look at it from two other perspectives:
Firstly, a solar pv system does not have to be tied to the grid. They could be off-grid and, therefore, have to outlay extra capital for battery systems if they wish to have electricity available 24 hours a day. Instead, by being grid-tied, the grid becomes the battery. For $2 a month, that’s a deal, that does not impinge on the long-term viability of a solar pv system.
But the other perspective elaborates on the point made by CoSEIA: the benefits of behind-the-meter solar pv systems to the utility companies. The utilities generally, consider three levels of demand for electricity that affect their procurement: base, intermediate & peak. Base load is night time. Intermediate is, generally, in the early morning, and peak load occurs in the daytime (in Colorado). Base load in the cheapest electricity for the utilities provided predominately by coal & nuclear plants. Intermediate is more expensively produced by less efficient (& dirtier) coal plants & gas-fueled plants. Peak electricity is the most expensive, most often produced by lower capital cost but more expensive to run gas and oil-fueled plants.
As Adam points out in his next blog about smart-grids with the example of the blackout of 2003: Solar PV reduces the demands of peak load. The utilities are getting tangible benefit from solar pv systems as they reduce their most expensive (and, actually, unprofitable) part of their energy supply. This is the main reason why many utility companies are offering incentives (in the form of rebates or feed-in-tariff rates) for solar pv systems – because behind-the-meter solar pv systems improve the profitability of the utility companies, and in the process do so with less pressure on the grid infrastructure systems.