Rooftop Solar in Utah: The Settlement Explained

It is hard to believe, but the summer is coming to an end. The end of summer also coincides with another chapter closing: We reached a settlement in the rooftop solar battle!! It was a long, hard road. One that involved hundreds of hours of meetings, detailed electric grid studies, lawyers, consultants, but most importantly, YOU!!!

Over the last 10 months, HEAL and its allies have been involved in intense negotiations with Rocky Mountain Power over the future of rooftop solar in Utah. Back in November, the Utility filed a request with the state of Utah to raise rates solar customers. You can read about the initial filing in this Salt Lake Tribune article.

The request consisted of some of the most punishing rates on rooftop solar ever proposed in the nation. Rates, which if they went into effect, would all but end the growth of rooftop solar in Utah. As one of the protectors of solar energy in Utah, HEAL sprang into action. We contracted with a consulting firm to do a detailed economic analysis on the environmental benefits of rooftop solar, hired an energy regulatory lawyer to give our study an extra legal punch, and began organizing as members of the public to make your voice heard for the fight ahead.

With all the legal, consulting, and public backing you think it would have been an easy road but the Utility was not going to give up without a fight. The settlement negotiations were, to say the least, slogging and contentious. Hours were spent over precise wording and sentences, going back and forth multiple times. There were many moments where everything was close to falling apart.

And this is where you came in. Your impact was twofold: Throughout the negotiations, you’ve been sending hundreds of messages to the Governor and to the Public Service Commission urging them not to raise rates of rooftop solar customers. It definitely gave us reinforcements during the negotiations in the spring and summer. You also made a huge impact during the public hearing on August 9th! Hundreds(!) of you showed up and told the commission in-person that the future of rooftop solar in Utah is important to you! HEAL and our allies held a press conference to highlight the day. You can read more about it in this Deseret News article.

I not going to go into too many details but let me just say, the day after the public hearing things changed for the better – Suddenly, we were a lot closer to a deal then the day before. It’s no coincidence. It was because person after person testified in support of this essential renewable energy source. If anyone ever tells you the voice of the public does not matter, point to the rooftop solar public hearing as proof.

Over the next couple of weeks, negotiations intensified and sacrifices were made on all sides. HEAL fought hard to ensure that its core priorities were included, like environmental compliance and legislative protections. After a marathon last weekend, we finally signed on the dotted line along with companies from Utah’s solar industry, Utah’s solar association, Utah Clean Energy, Salt Lake City, Park City, Summit County and others. While the settlement is not perfect, it was hard fought and will still allow Utah’s solar industry to grow, albeit more slowly.

So enough about my tail of tragedy and triumph. Let’s get into the details of what the settlement does. It can largely be broken down into three parts. What happens to current customers, what happens to customers over the next three years, and what happens to customers after that.

This is complex stuff so I am going to give you a few different options on how to take it in. The first is (obviously) read the explanation below, which gives a basic high level summary of the agreement. The second is to watch this video of yours truly explaining some the finer points of the agreement. Finally, and, if you are brave, you can read thewhole settlement document here. Take your pick or do all three! Here we go.

Current Customers
Protecting the existing investments of current rooftop solar customers was big priority for the solar coalition. They were some of the pioneers of this technology and made a long-term calculation to make sure their investment paid off. The good news is that we held strong on this point. Current customers’ rates will be unchanged for the next 18 years or until 2036. The timeline should allow the payback periods for these customers systems to remain relatively unchanged.

Customers for the next three years
The first big change happens as of November 15th of this year. Customers who file their interconnection agreement after that will be transitioned to a different set of electric rates. Ones which are not quite as generous, but will still allow for a decent payback period for their investments.

The export rate (the rate at which solar customers are compensated for their exported electricity) is reduced, how often their output is measured is increased, and this rate will be locked in for 15 years. Given the changes it will be more expensive (though certainly not prohibitively so) for the next three years to invest in solar.

For example, if your payback period was ten years under the old set of rates it might go to thirteen or fifteen years under the new ones.  

Customers after the three years
From the beginning, the big ask of HEAL and our allies has been to get a fair shake at a cost-benefit study on rooftop solar. In our opinion, the study that Rocky Mountain Power released was very flawed. It drastically overestimated the cost and greatly underestimated the benefits of rooftop solar. Its sample size of solar customers was pitifully small, and it only evaluated solar for a one-year period. (The shorter time period you look at the cost/benefits of solar the more “the costs” are apparent where a longer period “the benefits” are much more quantifiable.)  

A fair shake is what we will get. Over the next three years, there will be what an “export proceeding.” This proceeding will once and for all determine what the value of solar energy is. This is important because the more valuable the solar energy, the easier it is for Utah families to afford. The proceeding will allow “reasonably quantifiable” evidence to be put forth for the evaluation of solar on an extended time period. This should help reflect the true benefits and costs of this valuable resource, rather than skewing the results in Rocky Mountain Power’s favor. 

All of this brings us here –HEAL took risks to be a part of negotiations. It took a lot of staff time, resources, money, and effort. In the end, I can honestly say we made a difference! While not perfect, the agreement protects current customers, allows the solar industry to continue to grow, and finally gives us a true cost-benefit analysis, which have been asking for all along.

Most importantly, I want to thank you. I mean what I said that this settlement could not be possible without the public’s voice demanding rooftop solar be protected. If you took to the time to send an email, sign a postcard, volunteer, donate, make phone calls, go to the public hearing, or even attend a net-metering technical conference (the bravest of all!) take a second to pat yourself on the back. YOU can definitely say you made difference in this process!

We are already gearing for our next projects to push for more renewable energy in Utah. Projects you will be hearing about in the coming months.

But for now, take a breath, enjoy the moment and take it in.

Your Surreal Solar Advisor,

Michael Shea, Senior Policy Associate