The ongoing fight for rooftop solar in Utah is entering a new chapter.
Utah’s biggest electricity utility, Rocky Mountain Power, is proposing to drastically decrease the export credit rate, by 84%, for the energy that customers push back onto the grid.
This would greatly extend the payback period for a rooftop solar system, destroying the investment for Utah families and devastating the solar energy industry in Utah.
Keep reading for an in-depth look at what’s happening, or download our Fact Sheet for a quick overview of the issue.
Rooftop solar has been growing rapidly in Utah since 2009. The growth is largely due to systems becoming more affordable as the cost of solar panels has dropped globally. Those lower costs mean the system payback periods – how long it takes a customer to pay off the solar system – for Utah families have become shorter.
Due to this rapid growth, rooftop solar is beginning to compete with Rocky Mountain Power. In response, this monopoly utility wants to make the systems more expensive for Utah families.
In 2017, Rocky Mountain Power made an attempt to change rates and charges on rooftop solar customers. While they did increase some rates for customers, pushback from the public and organizations led to a three year interim agreement where the utility had to study the cost and benefits of rooftop solar. The three year interim ends in 2020 and Rocky Mountain Power is now trying to use their study to drastically change the rooftop solar industry in Utah.
The biggest change Rocky Mountain Power now wishes to make in the ongoing rate case (Docket 17-035-61) is a drastic change in export credit rates. When a rooftop solar customer produces excess energy, they can sell this energy back to Rocky Mountain Power. The amount they get back is known as an export credit rate and is a significant monetary incentive to getting rooftop solar. The current compensation rate is 9.4 cents per kilowatt hour, but Rocky Mountain Power wants to decrease the rate to 1.5 cents per kilowatt hour – an 84% decrease.
Rocky Mountain Power believes that their study supports this rate change only used a sample of a few dozen customers. This study was intentionally narrow in order to obscure environmental and economic benefits.
However, an independent study by Vote Solar used over 3,300 customers, resulting in wildly different true costs and benefits of solar. For example, Vote Solar’s analysis valued the compensation rate to be 22.6 cents per kilowatt hour – that’s 82% more than what customers receive now in Utah.
The public comment period for this rate case is open from now until October, when the Public Service Commission (the three-person body that makes the final decision on this topic) will hold public meetings before finalizing any changes in December 2020.
Current Rate Change Details
New Rates: Schedule 137
- Rooftop solar customers will receive a dramatically reduced credit from the utility for every kilowatt-hour of energy exported to the grid
- Rocky Mountain Power is proposing an average export credit rate of 1.526 cents per kWh. This equals an 84% reduction compared to the current rate.
- This would be applied differentially, based on the time of day and season
- Summer on peak (June – September, 4PM – 8PM)
- 2.6293 cents per kWh
- Summer off peak (June – September, all other hours)
- 1.7080 cents per kWh
- Winter on peak: (October – May, 4PM – 8PM)
- 2.2409 cents per kWh
- Winter off peak: (October – May, all other hours)
- 1.3247 cents per kWh
- Prices would be updated annually, so customer rates will change annually
- This new rate system will be known as “Schedule 137”
- Vote Solar’s analysis values the export credit at 22.6 cents per kilowatt hour
- Proposes a one-time, non-refundable application fee of $150
- Proposes a one-time customer generation meter fee of $160
- Proposes real-time or instantaneous netting of exported energy (instead of 15 min, hourly, monthly, etc.)
If the above rates are approved by the Public Service Commission, they would apply to all new rooftop solar customers who connect to the grid beginning January 1st, 2021.
Rooftop solar customers whose systems were connected to the grid prior to the original 2017 agreement will maintain their current rate structure until 2032. Customers who signed interconnection agreements during the “transition period,” between November 2017 and December 31, 2021, will be able to keep their rates until 2035. After these periods, all customers will be transitioned to the new rates under Schedule 137.
Rocky Mountain Power’s study was not nearly expansive enough to reflect Utah’s entire rooftop solar market. From the data we have access to, Rocky Mountain Power is minimizing the benefits of rooftop solar and exaggerating the costs to them. Without considering the climate and health benefits, the importance of grid flexibility, and the economic benefits, including job creation, rooftop solar should not be quantified by rate changes.
Nevada, a state with similar solar resources as Utah, recently learned the hard way about taking an axe to rooftop solar policies. After adding higher fixed monthly fees and reducing the export credit by 2/3 in 2015, the market fell by half and installations dried up. It was such a disaster that the governor and legislature led legislation to reinstate net metering, and the market has almost completely rebounded. Utah does not need to go this route, and we know what can happen if the Commission makes the wrong decision.
We believe that clean air, energy independence, and Utah jobs should be prioritized, not the profits of Rocky Mountain Power.
What’s at Stake?
The recent growth in rooftop solar installations has led to the creation of thousands of clean energy jobs. As of 2019, there are more than 7,000 in Utah. By gutting the market with rate changes, it is likely that these individuals would lose their jobs.
Despite recent investments in renewable energy, Utah is still primarily dependent on fossil fuels for electricity. Widespread adoption of rooftop solar, rather than shutting the prospects of this down, will not only help Utahns become more energy independent and contribute to cleaner air, but also to help offset power generation from fossil fuels.
Rooftop solar offers many other, widespread benefits, including:
- Avoids line losses and capacity upgrades
- Reduces costs for the electric grid system, reducing wear and tear on the electric grid
- Avoids construction of new power stations
- Reduces environmental compliance costs
- Displaces more expensive power sources
- Stabilizes energy prices
- Current rate case docket: Docket 17-035-61
- Rocky Mountain Power megawatt capacity tracker
- Previous rooftop solar docket-14-035-114
- Current docket coverage: Salt Lake Tribune article 3/6/20
- Previous docket coverage: Utah Business Magazine 2018 article
Questions? Please email HEAL’s Policy Associate Noah Miterko at firstname.lastname@example.org.