Who pays for solar power? Utilities, energy firms disagree

BRIAN DOWLING, The Hartford Courant

Because residents with solar installations only pay for the number of kilowatt hours they pull from the grid, utilities argue the cost to keep the poles, wires, transformers running is shifted to traditional customers.

HARTFORD, Conn. (AP) — One of the more recurring disagreements before the legislature's Energy Committee at a recent meeting centered on whether residents with solar panels are really paying for all they get from the power grid.

It is called cost shifting, a phrase that echoed through the hearing room in the Legislative Office Building during conversations on bills that would expand residential solar and enable shared solar facilities in Connecticut.

Because residents with solar installations only pay for the sparse number of kilowatt hours they pull from the grid (along with a small monthly set fee), utilities argue, the cost to keep the poles, wires, transformers and substations up and running is shifted to traditional customers who consume, and pay for, more electricity in a more standard way.

"Millions of dollars of costs are shifted to those who do not participate in such networks," Stephen Gibelli, an assistant general counsel from Eversource Energy, told the committee.

The heart of the argument is an energy policy known as net metering. The arrangement allows residents and businesses to bank unused kilowatt hours from their solar installations and use them later when they need power from the grid. Many utilities have argued that net metering policies should not value that solar kilowatt at the full retail price, which includes generation, transmission and delivery.

But others argued Tuesday that the value of solar could be much higher than the net metering policy allows.

"The cost shifting, which the utilities and others have brought to the table — they are promoting as if it is a given," said Joel Gordes, president of Environmental Energy Solutions, an energy consultancy. "Let me assure you it is not. Net metering payments are not subsidies, not cost-shifting. They are compensation for the products that residents are selling back to the utilities."

He argued for a study that would determine a value to solar power. A similar study in Maine found the value of solar power to be 33 cents per kilowatt hour because of how the systems both avoid transmission and fuel costs and create greenhouse gas benefits. In Connecticut, each kilowatt hour costs residential customers about 20 cents.

Testimony relating to the shared clean energy facilities proposal centered on whether to approve a large program or move forward with a small pilot program.

The proposal would let large solar installations sell shares of the energy it produces to residents. In exchange for buying a share of a given project, residents would receive monthly credits on their regular electric bills.

Many support the idea because it would give people who cannot put solar panels on their roofs the ability to benefit from the solar boom in Connecticut.

The state's utilities as well as Connecticut's consumer counsel prefer a slower approach through a pilot program.

"It's as simple as we need to crawl before we walk," said Roddy Diotalevi, United Illuminating's senior director of sales and marketing.

But many in the solar industry have seen the shared solar model work in numerous states around the country, including many in New England, and so they don't see that a pilot is necessary. They also fear that a too-slow push into shared solar could result in the loss of substantial tax benefits when the federal government lowers its tax credit for solar installations to 10 percent from 30 percent at the end of 2016.

"A pilot program is an unnecessary delay that would lose millions of dollars of federal investment," said Sean Garren, the Northeast regional manager for Vote Solar, a solar advocacy group.

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