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Wednesday, August 14, 2013

Utility Companies Push Back On Solar Incentives

Two workers install solar panels on a rooftop in Fort Dix, Texas. (U.S. Army Environmental Command/Flickr)

Two workers install solar panels on a rooftop in Fort Dix, Texas. (U.S. Army Environmental Command/Flickr)

The General Electric company has announced plans to scrap a $300 million solar panel factory in Aurora, Colorado. The facility would have been the largest of its kind in the country.

GE had earlier suspended work on the project, amid falling prices and a rising inventory of solar panels.

Meanwhile, more and more utility companies around the country are asking regulators to reconsider an incentive program that’s encouraged many people to invest thousands of dollars in rooftop solar electric systems.

From the Here & Now Contributors Network, Ben Markus of Colorado Public Radio has the story of one of those companies.

Colorado’s Xcel Energy, an electric and natural gas company, provides energy to customers in Colorado, Michigan, Minnesota, New Mexico, North Dakota, South Dakota, Texas and Wisconsin.

Reporter

  • Ben Markus, general assignment reporter at Colorado Public Radio and Here & Now Contributors Network. He tweets @CPRMarkus.

Transcript

ROBIN YOUNG, HOST:

Well, today is the 10th anniversary of the Northeast blackout. Just after 4 p.m. on August 14th, 2003, a tree branch in Ohio started a power outage that led to one of the biggest blackouts ever. NPR's been taking a look back at that day and at the state of the power grid today. But we want to take a look at what many say is the grid's future.

According to the Energy Information Administration, electricity generated from rooftop solar panels accounts for less than 1 percent of the power generated in the U.S. But the utilities are worried. Many around the country are asking regulators to reconsider an incentive program that gives people breaks for investing thousands of dollars in rooftop solar installation units.

We're going to take a broader look, but we start in the West. From the HERE AND NOW contributors' network, Colorado Public Radio's Ben Markus has the story of Colorado's Xcel Energy.

BEN MARKUS: It's so quiet in Blake Jones' backyard, you'd never know that a little power plant was busy churning out energy on his roof. Jones run a solar panel installation company called Namaste Solar. In 2006, this was one of the first installs he did, and last year he ended up buying the house.

BLAKE JONES: It was just a fun bonus that Namaste Solar had installed the PV system here. So...

MARKUS: So you feel like you could trust it?

JONES: Yes.

(LAUGHTER)

MARKUS: Jones has enough solar panels to essentially zero-out his utility bill. During the sunny part of the day, he sells electricity his house can't use back to Xcel. Jones makes enough to pay for the electricity he gets from Xcel at night, when it's too dark for the panels to work. He says this arrangement is...

JONES: One of the cornerstones in the foundation upon which the solar market in the United States has been built.

MARKUS: But Xcel now thinks it could be paying people like Blake Jones too much. Xcel is telling state regulators customers without solar panels could be unfairly subsidizing his use of the electric grid. If Xcel ends up reducing the payments for power, Jones says many solar customers will decide the upfront investment isn't worth it.

JONES: This is a pretty serious threat to the future of Colorado's solar market.

MARKUS: Xcel says that's a typical exaggeration. Karen Hyde, a vice president with the utility, says solar companies made the same argument when Xcel slashed rebates for solar panel installations a couple years ago.

KAREN HYDE: The industry, each time they say that we are hostile and killing the industry, but, in fact, they've re-looked at their business plans and have been able to thrive through those changes.

MARKUS: She says that's because the cost of solar is falling, making it attractive for many more homes and businesses to install panels. So she argues it's now fair for Xcel to re-evaluate what it pays customers for their solar power.

HYDE: And now we - this is kind of the last big piece of incentive, and it seems reasonable, if you project that you're going to have that much solar installed, that the cost is going to continue to come down. And really, is that incentive warranted?

MARKUS: Environmental groups say the problem is Xcel has no incentive to have rooftop solar succeed. Annie Lappe is with the Vote Solar Initiative.

ANNIE LAPPE: So having their customers have the ability to harness free sunshine through a technology that is becoming more and more affordable really is a threat to their old way of doing business.

MARKUS: Solar makes up less than 1 percent of all the power on the company's grid. Just 15,000 rooftops have panels. Lappe thinks that Xcel is doing its best to make sure that number stays small.

LAPPE: So, they have lots of levers to slow the growth of solar, and, in fact, we're seeing Xcel use many of these levers.

MARKUS: Now state regulators must weigh in on whether the utility's solar power payments are too generous. Blake Jones with Namaste Solar says the eventual ruling could determine the future of his business.

JONES: You know, I think this is where we, as Coloradans, need to decide what's most important to us. What do we want? Because what's best for Xcel Energy isn't necessarily what's best for Colorado.

MARKUS: Xcel says if regulators don't agree to review its solar pricing, it will ask the state to restrict the number of new solar installations it allows onto the grid next year. The solar industry calls that extortion. For HERE AND NOW, I'm Ben Markus, in Denver.

(SOUNDBITE OF MUSIC)

YOUNG: And when we come back, a broader look. Behind closed doors and at their annual conferences, fossil fuel utility companies have been saying subsidized solar is a threat, mainly because they say it's going to make it impossible for them to maintain the grid. Well, we'll speak with an analyst who says they're right on one count, that solar is going to be used more and more. That is next.

JEREMY HOBSON, HOST:

We're also following some other stories, obviously, today's events in Egypt. Also, federal prosecutors filed criminal charges today against two JPMorgan Chase traders involved in the London whale bets that produced $6 billion in losses for the bank. The SEC also filed a civil case. The two men were charged with fraud and conspiracy to falsify books and records.

Also, veteran political reporter and pundit Jack Germond died today at the age of 85. He covered politics for the Baltimore Sun and the shuttered Washington Star. There will be a remembrance of him and other stories later on ALL THINGS CONSIDERED. We're back in a minute, HERE AND NOW. Transcript provided by NPR, Copyright NPR.


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Robin Young and Jeremy Hobson host Here & Now, a live two-hour production of NPR and WBUR Boston.

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