The blogosphere continues to buzz with posts from solar-energy enthusiasts who would like to see photovoltaic panels sprout from every roof under the Colorado sun—no matter how much it costs rank-and-file ratepayers to subsidize it.
As we’ve noted here before, our state -regulated net-metering program requires that home and business owners who install solar panels be compensated by their local public utilities for any unused electricity they generate and pump out onto the community’s power grid. Fair enough, but as large utilities like Xcel Energy have been arguing for some time, the compensation rate for that excess power is too high. These customers are being paid far more than the value of the extra electricity they actually pass along to other ratepayers on the grid.
The cost of any given type of fuel, whether renewable or fossil, comprises less than half of the market price per kilowatt-hour of the electricity the fuel generates. What accounts for the rest? The considerable cost of running the power grid—maintaining the hardware, labor costs and so forth.
And it is the market price that utilities are forced to pay rooftop-solar beneficiaries—even though they of course are not helping upgrade, maintain or staff the utility’s infrastructure. In other words, they are being paid for something they do not actually contribute to their fellow utility ratepayers.
As public utilities have pointed out, they can provide the very same solar power, generated by the same sun, at a substantially lower cost to consumers. That only stands to reason; the large-scale solar arrays that increasingly are being tapped by public utilities can generate electricity at a lower unit cost. It’s the simple economics of mass production. Remember Henry Ford?
All of which is pretty well established and, frankly, hard for the small-scale rooftop industry’s lobby to refute. So, the industry and its true believers instead have taken an alternate route in attempting to defend the inflated rates of the status quo. It’s an oldie but goodie: bashing big business. And that brings us back to the legions of bloggers, social-media mavens and PR machines that comprise the industry’s propaganda mill. Consider this routine post from the blog communitygreenenergy.com:
The (investor-owned utilities’) push for community solar isn’t about supporting the community or growing clean renewable energy. It’s about maintaining their monopoly control over the generation of energy and thereby, limiting their customer’s right to choose…Building a solar array somewhere and slapping the word community on it doesn’t make it community solar. Sure, customers would be buying solar generated electricity…
…But, apparently, the fact that it’s solar isn’t good enough. Sorry, the big utilities’ motives are impure, or so we’re told; real solar power has to be generated by the “community”—not a large, investor-owned utility.
Yet, what if the large public utilities can in fact bring us solar power at a much lower cost?
To be taken seriously, diehard supporters of the roof-by-roof solar movement are going to have to set some priorities. Notably, they’re going to have to decide whether it is more important to help grease the wheels of the buy-local/big-business-is-bad bandwagon—which is fine, if that is indeed their core mission—or help advance renewable energy in a way that makes it more affordable for the masses. They will have a hard time taking up both of those missions because in this case, they are in conflict.
Anyone familiar with our coalition’s years-long advocacy knows we are far from apologists for big, regulated-monopoly utilities. We regularly have taken to task the likes of Minneapolis-based Xcel, which is the largest provider of power to our state with 1.4 million Colorado ratepayers. We have lambasted Xcel’s successive rate hikes as well as those of Rapid City, S.D.-based Black Hills Energy, serving Pueblo. And we have chided these utilities, ironically enough, for their often-opportunistic support for the renewable-energy agenda to the extent it drives prices higher.
Yet, Xcel and other utilities do have a point when they call for an end to the high prices that they pay to rooftop-solar users and then pass on to consumers. When they are right, they are right.
For so many of Colorado’s electricity ratepayers—residential and commercial; mom-and-pop businesses; seniors on fixed incomes; working families struggling to get by—inefficiently produced energy isn’t virtuous; it’s just unaffordable. That is true no matter how much it’s dressed up with fetching catch phrases like “community solar.”
If solar power truly is to be a viable part of our state’s, and our nation’s, energy portfolio, it’ll have to be cheaper. Large utilities deserve credit for at least trying to move the needle in that direction.