Do You Think Utilities Should Be Able To Own Rooftop Solar?

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If utilities own the solar on customers’ roofs, it will increase penetration, save the distribution grid, and set the stage for a new business model. In Idaho, natural gas exploration representative David Hawk said that’s not the utility’s business.

Idaho Power is struggling to do the right thing by its shareholders and its customers. It wants to keep prices as low as possible and to make profits. It still sees those as tied to kWh sales.

Last week Idaho Power’s Integrated Resource Plan Advisory Council met. Rocky Barker of the Idaho Statesman covered the meeting in some detail. Based on the coverage, it appears that Idaho Power is hampered by a belief that solar prices will not continue to drop and so has not included solar in its integrated plan.

Not surprisingly, many on the Council and in attendance disputed this position. Rocky Barker reports the following exchange:

Idaho had hundreds of people eager to build solar systems as the price of panels dropped – until Idaho Power filed a proposal with state regulators that removed the financial incentives.

“Idaho Power brought a case to kill it,” said Peter Richardson, an energy attorney.

That brought a terse response from David Hawk, who represents natural gas exploration companies.

“I don’t think building solar units on individual houses is the role of a utility,” he said.

Hawk was apparently against allowing third-party financing of solar installations as is done in California, because “electric prices are higher in California than they are in Idaho, making such programs more useful and profitable.”

There should be no doubt that the price of solar will drop precipitously; the Department of Energy is investing millions to ensure it does (DOE Sunshot Initiative). More importantly, a big chunk of the investment targets driving down residential rooftop solar costs. Distribution utility focus on making distributed generation and storage work ensures a future for them, and a big part of that could be owning solar and storage at customers’ sites.

If we do not give utilities a chance to own the solar and storage, we will doom them to eventual bankruptcy. Before that occurs, of course, we will pay too much for a poorly functioning grid because they will not have the funds to invest, which brings hardship on customers as well as investors. Let’s give the utilities a path to save themselves instead.

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2 comments on “Do You Think Utilities Should Be Able To Own Rooftop Solar?

  1. joan mccaffrey on said:

    The tangle that the utility faces is maintenance, support for those panels, along with coordinating roof-top access for inspection, entanglement with house loan transitions, etc. A better approach might be to offer the homeowners a transferable time-share interest in a solar farm, in which the homeowner pays for electricity based on their ownership interest in the solar farm. This interest can be sold to other parties and of course, if they move, they don’t loose the value of the installation tied to their rooftop. If their interest into the solar farm exceeds their usage, the excess can be more easily sold back to the utility. A solar farm would have better economy of scale, the utility could add batteries or storage to allow a more reliable power feed to the grid. I would rather see this approach, along with a 0% interest loan to the homeowner to buy into this solar investment.

    • Doug Short on said:

      Hi Joan – I agree with some of the problems you cite, but they are really no different than those faced by companies like SolarCity that own the panels on customers’ roofs and provide them lower cost electricity. I think the only difference is that utilities would have lower capital costs and thus would be able to provide the solar at a lower cost.

      I really like the idea of solar gardens as you describe. Unfortunately, I do not see anything in it for the utility. When using someone’s roof, the utility essentially gets the space for free, and avoids costs associated with some distribution equipment. With a solar garden, they do not get any of that; instead, they have higher costs and still have lower sales.

      The numbers could still work out, but I think it would be more difficult.