The Battle Continues For The Future Of Residential Solar
No one can deny that 2016 was a turbulent year, least of all energy professionals. Last year marked the continuation of bitter regulatory tangles between utilities and environmental and clean energy groups. At stake? The future of net energy metering (NEM), tax credits, and other incentives that proponents say are vital to the proliferation of solar energy. All over the U.S. – and particularly in the coal-heavy Midwest – utilities complained that NEM for solar customers represented an unsustainable pricing system. If residential solar installations keep growing the way they have for the past two years, some utilities argued, the power companies could no longer afford to keep extended subsidies and price relief for solar-powered households.
Interestingly, 2016 was also the year that we got a full launch of Tesla’s Powerwall 2. Tesla paired the release of its revamped energy storage battery with a small-screen unveiling of solar roof tiles on TV’s Desperate Housewives set – and many Americans became acquainted with the idea of solar storage for the first time. Battery power’s entry into the mainstream begs the question: What is the way forward for solar? Is it residential rooftop solar paired with energy storage? Or will large-scale, utility-owned installations dominate, eventually rendering residential solar unnecessary?
If you’re Tesla CEO Elon Musk, who spearheaded the electric vehicle and battery maker’s recent acquisition of rooftop solar company SolarCity, it’s pretty obvious how you’re voting. However, the introduction of the Powerwall 2 storage system did more than present a vision of the future of Tesla; it also introduced battery storage into the public zeitgeist.
Of course, there are many other energy storage and solar companies out there ready to assist consumers in switching to clean energy, but the public’s growing awareness that solar can save them money – and that pairing it with storage can help them break away from the utility grid – comes at an interesting time. In the current environment, myriad utilities seem to be positioning themselves in a staunch “con” position when it comes to incentivizing solar power – coincidentally, the exact same incentives that Musk’s SolarCity and many more solar providers rely on to maintain their business models.
Rate reforms
Just in time for the new year, Arizona regulators completely revised pricing structures for NEM customers in December, in a new effort to move away from retail rate prices paid for solar customers’ excess energy. The regulators called their vote to replace retail NEM a “landmark” decision that will “determine a fair export rate for the future,” while solar proponents warned that the change could damage the state’s solar market. Some of Arizona’s neighbors also went through similar fights last year. For example, Utah solar advocates have denounced a proposal from Salt Lake City-based Rocky Mountain Power to revise its NEM program.
As proven in Nevada, dismantling NEM incentives can come with a price for both solar installers and the economy. After state utility regulators slashed NEM rates in December 2015, several solar companies ceased their local operations and installations in Nevada nearly halted.
Is it time for change?
The proliferation of NEM debates indicates that the face of energy is rapidly changing – and that it may be time to rethink energy pricing overall and the role of utilities.
