Local View: Far from a drain, solar power a huge asset to society

As the country increasingly transitions to a renewable-energy future, many utilities are ferociously resisting solar energy, often claiming homeowners who have solar arrays are pushing the costs of maintaining the grid onto other customers. Some utilities have placed punitively high fixed charges on solar arrays to diminish their economic viability - including here in Minnesota.  
The reason for the resistance is simple: The business models of the utilities are being increasingly threatened by solar. Like many states, Minnesota has a “net metering” policy. This allows the owner of the solar panels to take electricity out of the grid when needed and put solar power back into the grid when it is produced. At the end of the year, accounts are settled, and the homeowner either pays a small bill or gets a small check from the utility. The problem is that the utility doesn’t get any money to cover the cost of maintaining and repairing the grid we find so useful. When solar was expensive and rarely deployed, net metered solar was such a small part of most utilities’ generation mix that any cross-subsidization of costs to other ratepayers was of little consequence.However, solar prices have dropped 90 percent since the 1970s and are still dropping 1 percent to 2 percent a month. This has led to an explosion in the growth of solar and considerable conflict.For those still clinging to fossil fuels, a clever way to attack the growth of solar energy is to suggest that the wealthy will buy solar but will push the costs of the grid onto the backs of the poor. While the policies that follow this line of argument thwart solar and preserve utility profits in the short term, solar and battery storage is getting downright cheap. Soon, many who are wealthy or even middle class will simply defect from the grid with their solar panels and batteries: still connected to the grid but pulling no power from it. Meanwhile, the utility grid will be starved for resources and will go into a death spiral as rate increases push more ratepayers to defect from the grid.This would be a terrible waste of potential resources. Fortunately, the Minnesota Public Utilities Commission recently approved the Value of Solar Tariff, which very transparently calculates the value of solar to society when fossil fuels are displaced by solar energy. The tariff being used by Xcel Energy is approximately 12.5 cents per kilowatt and annually rises with inflation. This is the price paid to the owner of the solar panels. Meanwhile, the same owner pays the normal rate for electricity off the grid when needed at a lower price. Solar is further encouraged to grow, and all ratepayers contribute to the costs of maintaining the grid.   Ratepayers can still have batteries, water heaters, off-peak heating systems and electric vehicles, all of which can store peak solar electricity and can potentially be managed by the utility to keep power demand constant. This “demand flexibility” shaves off the peaks of demand in the mornings and evenings and ratepayers who invest accordingly could and should be compensated for their services to the grid.There are potential pitfalls with this system. For instance, the Public Utilities Commission can change with a new administration or be subject to regulatory capture. And nothing would be more consistent as a price on carbon than the Citizens’ Climate Lobby’s carbon-fee-and-dividend plan. However, the commission has at last struck down the argument that solar energy is always a drain on society; in fact, it is an asset. Dr. Eric Enberg practices family medicine in West Duluth and is the group leader of the Duluth Citizens’ Climate Lobby (citizensclimatelobby. org/ chapters/MN_Duluth/).As the country increasingly transitions to a renewable-energy future, many utilities are ferociously resisting solar energy, often claiming homeowners who have solar arrays are pushing the costs of maintaining the grid onto other customers. Some utilities have placed punitively high fixed charges on solar arrays to diminish their economic viability - including here in Minnesota.  
The reason for the resistance is simple: The business models of the utilities are being increasingly threatened by solar. Like many states, Minnesota has a “net metering” policy. This allows the owner of the solar panels to take electricity out of the grid when needed and put solar power back into the grid when it is produced. At the end of the year, accounts are settled, and the homeowner either pays a small bill or gets a small check from the utility. The problem is that the utility doesn’t get any money to cover the cost of maintaining and repairing the grid we find so useful. When solar was expensive and rarely deployed, net metered solar was such a small part of most utilities’ generation mix that any cross-subsidization of costs to other ratepayers was of little consequence.However, solar prices have dropped 90 percent since the 1970s and are still dropping 1 percent to 2 percent a month. This has led to an explosion in the growth of solar and considerable conflict.For those still clinging to fossil fuels, a clever way to attack the growth of solar energy is to suggest that the wealthy will buy solar but will push the costs of the grid onto the backs of the poor. While the policies that follow this line of argument thwart solar and preserve utility profits in the short term, solar and battery storage is getting downright cheap. Soon, many who are wealthy or even middle class will simply defect from the grid with their solar panels and batteries: still connected to the grid but pulling no power from it. Meanwhile, the utility grid will be starved for resources and will go into a death spiral as rate increases push more ratepayers to defect from the grid.This would be a terrible waste of potential resources. Fortunately, the Minnesota Public Utilities Commission recently approved the Value of Solar Tariff, which very transparently calculates the value of solar to society when fossil fuels are displaced by solar energy. The tariff being used by Xcel Energy is approximately 12.5 cents per kilowatt and annually rises with inflation. This is the price paid to the owner of the solar panels. Meanwhile, the same owner pays the normal rate for electricity off the grid when needed at a lower price. Solar is further encouraged to grow, and all ratepayers contribute to the costs of maintaining the grid.   Ratepayers can still have batteries, water heaters, off-peak heating systems and electric vehicles, all of which can store peak solar electricity and can potentially be managed by the utility to keep power demand constant. This “demand flexibility” shaves off the peaks of demand in the mornings and evenings and ratepayers who invest accordingly could and should be compensated for their services to the grid.There are potential pitfalls with this system. For instance, the Public Utilities Commission can change with a new administration or be subject to regulatory capture. And nothing would be more consistent as a price on carbon than the Citizens’ Climate Lobby’s carbon-fee-and-dividend plan. However, the commission has at last struck down the argument that solar energy is always a drain on society; in fact, it is an asset.Dr. Eric Enberg practices family medicine in West Duluth and is the group leader of the Duluth Citizens’ Climate Lobby (citizensclimatelobby. org/ chapters/MN_Duluth/).