An Epic Battle Between Solar Firms and Power Utilities Could Leave One Side Unplugged

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The fight over how much credit solar customers deserve from utilities primarily is about money. But it's also about what Arizonans think of rooftop solar as a way to decentralize electricity production and reduce emissions.

As New Times related in a December 27, 2012, feature about the weaknesses of solar power ("Solar Eclipsed"), the forecast is bleak for anything other than fossil fuels to power most of even sun-drenched Phoenix and the rest of Arizona for at least the next 20 years. Solar companies probably won't offer any real alternative to power utilities for decades to come.

And solar won't save the Earth from climate change anytime soon. India and China are building CO2-belching coal plants that erase in just days carbon dioxide emissions saved by U.S. solar installations over an entire year.

Still, the public supports paying a modest amount to help research and development of solar-power technology, which has the side benefit of — if you compare it to fossil-fuel-burning energy sources — lowering the amount of carbon dioxide and other pollutants, such as sulfur dioxide and particulates, that foul the environment.

But there's a limit to the public's generosity.

People may not care now, APS maintains, but as solar grows in the next few years, the public no longer will be able to stomach the cost. Looking further ahead, a major disruption of the utility industry's business model could lead to electric-bill mayhem. Utility experts believe this scenario is likely in a few years, if net metering remains at current levels.

In other words, rooftop solar power is a win-win — for solar companies and their customers.

Everyone else loses.

Both sides in the net-metering debate say it's about fairness. Those who generate electricity with solar panels deserve to be paid for their product, everyone agrees. But what's a fair price?

In 2006, the Corporation Commission, then with a more solar-friendly makeup, approved net metering for renewable energy sources as a way to kick-start solar and other industries.

The utilities fear it's growing into a monster.

Last fall, APS began complaining publicly about what it perceives as a serious future problem for its ratepayers.

As New Times explained in the December article, the day has not yet arrived when energy collected from the sun can be stored efficiently for constant use when the sun's not shining.

Solar panels take a break at night and when clouds are overhead, but customers expect their air conditioners and computers to keep humming. The need for continuous demand isn't met by solar panels' intermittent power. Only utility companies, with their coal, natural gas, and nuclear resources, can provide smooth, (nearly) uninterrupted electricity in quantities that match the needs of customers who suck the most energy.

Without the ability to store electricity collected during times when power isn't needed, solar customers use APS as what the utility describes as a "virtual battery."

Most residential-solar installations start and end the solar process connected to the same old wires everybody else uses, and solar customers must keep dealing with the same utility company to which they've always been tethered.

The good part for solar users is that when they upload power to the grid — the network of wires used to transmit and receive electricity — APS pays them a relatively high rate. The payment roughly matches the per-kilowatt retail rate that the customer pays the utility for power when the sun isn't overhead.

It's somewhat analogous to forcing a grocery store to buy a bushel of apples you grew in your backyard for the same price it sells them for.

On its face, buying power — or apples — at retail rates doesn't sound like a good business plan. As anyone who took high school economics knows, it's buy low/sell high, not buy high/sell high.

APS officials say solar users reduce their bills so much with this process that they aren't paying a fair share of the fixed costs of providing access to the electrical grid on which they rely.

As stated in a December 2012 study prepared for APS by Navigant Consulting, the cost of serving customers with solar is below what these customers pay — and other customers pay more because of it.

To make the system reliable and relatively cheap, the costs of electricity generation, transmission lines, wires, substations, and various other equipment and services must be borne by all ratepayers, the study states. Solar users do have to pay for whatever electricity they need — above what their rooftop systems generate — but it's not enough to help cover all these costs, APS insists.

Power companies nationwide view the trend toward "distributed energy" (that is, energy that comes from geographically spread-out sources, as opposed to a centralized utility) as a major problem.

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Ray Stern has worked as a newspaper reporter in Arizona for more than two decades. He's won numerous awards for his reporting, including the Arizona Press Club's Don Bolles Award for Investigative Journalism.