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Published on May 14th, 2013 | by Giles Parkinson

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Rooftop Solar Owners vs Utilities – The Battle Begins

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May 14th, 2013 by
 
This article originally appeared on RenewEconomy.

Solar panel installation via Shutterstock

Solar panel installation via Shutterstock

You don’t have to go too far into a document prepared by the US-based Edison Electric Institute (EEI) to realise what is at stake for centralised utilities from the threat of rooftop solar.

The EEI, a trade group that represents most investor owned utilities in the US, said solar PV and battery storage were two technologies (along with fuel cells and storage from electric vehicles) that could “directly threaten the centralised utility model” that has prevailed for a century or more.

How worried should they be? A lot, said the EEI.  The ability of rooftop solar, battery storage and energy efficiency programs to reduce demand from the grid would likely translate into lower prices for wholesale power and reduced profits. Worse still, customers were just as likely to “leave the system entirely” if a more cost-competitive alternative is available.

“While tariff restructuring can be used to mitigate lost revenues, the longer-term threat of fully exiting from the grid (or customers solely using the electric grid for backup purposes) raises the potential for irreparable damages to revenues and growth prospects.”

In the US, utilities are now seeking to protect their business models by pushing hard against net metering and seeking to influence the pace and manner of deployment of other technologies and new energy market concept that don’t fit the decades old model.

In Australia, much the same has been happening. RenewEconomy reported on the concerns of utilities in this article last month. Feed-in-tariffs have been wound back, as they were supposed to have been as technology costs fell, but now the pendulum is swinging the other way, and utilities – with the apparent complicity of state-based pricing regulators – are now trying to extract as much revenue from solar customers as they can.

It is a dangerous game. Leading electricity executives and market analysts suggest the rollout of rooftop solar is inevitable and “unstoppable” – unless, of course, by regulation and changing tariffs.

Little wonder then, that solar consumers and rooftop solar providers are starting to organise themselves to protect the interests of individual consumers, and the industry as a whole.

In Australia, a new solar campaign initative known as “Solar Citizens” is being launched this week to ensure the interests of solar owners are protected from changes to laws and policies by power companies and governments.

Solar Citizens sees its mandate as helping existing and would-be solar owners to advocate for their rights as energy investors and aims to push for panels on every Australian rooftop.

Solar Citizens Manager Dr Geoff Evans says 2.5 million Australians now live under a solar roof (one million homes have rooftop solar PV systems), and have invested about $8 billion. Some forecasts expect those numbers to triple by 2020.

“That’s an amazing show of support for solar,” Evans said.  “But to date, when the interests of solar owners have come under threat, there has been no way for them to come together and protect their interests. With Solar Citizens that will change.”

One of Solar Citizens initial targets will be Queensland, there the local competition authority has canvassed a range of controversial tariff structures that appear to favour government owned utilities over consumers, as RenewEconomy highlighted in March in this article, and again two days later. In other states such as NSW, individual homeowners have to negotiate with retailers to get a price for the power that retailer then sells to their neighbours.

“There’s a real power imbalance in those negotiations” said Evans. “The situations in NSW and Queensland highlights the trend we have seen across the country,” said Dr Evans. “We will soon be working on campaigns with solar owners in every state to make sure all Australian solar owners are ensured a fair go.”

“Network operators and energy retailers don’t want to see Australian’s take back control of the grid. They are making it harder for Aussies to go solar in order to protect their profits.

The Solar Citizens campaign is emerging in Australia just as solar companies in the US are organising themselves to counter the same potential threats to their business.

Last week, Bloomberg reported, SolarCity, Sungevity, Sunrun and Verengo, which accounted for the majority of US rooftop solar installations (most of which are financed by leasing arrangements)) formed a lobbying group called the Alliance for Solar Choice to combat efforts by “monopoly utilities” to quash programs that support renewable energy in 43 states.

The alliance is seeking initially to preserve net metering policies that require utilities to purchase surplus electricity at retail rates from customers with rooftop solar systems, and says it is responding to “the coordinated utility attack on net metering throughout the country.”

Bloomberg said the effort underscores the growing conflict between rooftop solar providers and power companies that disagree about the long-term sustainability of industry support mechanisms such as net energy metering.

Utilities say that as more people install solar panels at home and are compensated for the power they generate, it shifts the costs of operating their grids to non-solar users. A similar argument is trotted out in Australia. But as the QCA report acknowledges, the benefits of solar PV are not documented or even brought into consideration for the setting of tariffs.

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About the Author

is the founding editor of RenewEconomy.com.au, an Australian-based website that provides news and analysis on cleantech, carbon, and climate issues. Giles is based in Sydney and is watching the (slow, but quickening) transformation of Australia's energy grid with great interest.



  • curt Granstrom

    Imagine the plight of the horse rancher and breeder in th face of the automobile. The primary difference this century would be share holders, and the influence of our politics through corporate dollars and p.r. campaigns. ” …if we keep heading in this direction, the typical family’s electrical costs will skyrocket”. Exactly. So much so, that getting a loan to put solar on your roof will be as easy as signing up for cable television. Growing pains? Of course there will be growing pains. They’re like contractions before the birth of a child.

  • http://khanneasunztu.wordpress.com/ KhanneaSuntzu

    This is bullshit. It is simply utility companies being intellectually lazy, short-sighted and cowardly. It would be the same a century ago with “whaling oil” companies “defending their interests” against these new contrived novelties such as “petrochemical oils”.

    I suggest these utility companies find better business models based on established (incontrovertible, irreversible) market and materials trends – Solar is here to stay. If they want to offer consumers a product I suggest they drop their prices fast. There will eventually be a utility that will elbow itself in the sweet spot between metered electricity and consumers still paying for product. If such a broker can store electricity, that broker will completely out compete the established utility dinosaurs.

    But it doesn’t end there. Japan is experimenting with seemingly SF technologies such as SBPS. Wonderful – suspend a thin film collection device in the sky and collect energy 24/7, at three times the intensity of surface electricity. With no clouds, no corrosion, no erosion, no theft, no vandalism. Sounds like a sweet deal, as long as your company isn’t managed as a CEO gerontocracy. For the somewhat nearer terms look at Thorium and DC grids and Hyperions.

    There is growth everywhere. The problem right now is these damn asshole financiers and banks that are terrified of parting with their money. So what do we get? No economic growth as our politicians allows the formation of geofinancial monopolists, and they all seem convinced that you can have real growth solely from speculation.

    I bet the last King of France thought the same thing. They called him the sun king, and then he went extinct.

  • http://www.facebook.com/jlindseyco Jim Lindsey

    “THE BATTLE BEGINS,” is a clever, almost accurate, article about what’s going on. I say “almost” because TVA, the huge “political” giant began that battle in 1980, after President Carter mandated TVA to do something for their captives, eh, I mean customers.

    TVA does not play fair, for they possess much power,( pardon the pun). Our 1980 solar water heater company; somehow, installed over 300 solar heaters. A fine, enthusiastic group, consisting of 36 employees got it done, in spite of TVA’s efforts to remain the “only game in town.”

    Once again, they have played a “trump card,” by stopping solar companies with their cut-off cap of 7.5 MG. Just to put it into perspective, New Jersey installed 415 MG of solar electricity last year. That is “only” 55, Fifty-Five TIMES more than TVA’s 7.5 cap. All the while hearing politicians and TVA, proclaiming what a “solar leader,” Tennessee happens to be.

    Well lead on “Power Guys”, for you must sell many, many, kilowatts to rid yourself of a 26 billion dollar debt. I would not welcome any competition either.

    I am reminded of the saying, “Fool me once, shame on you, yada, yada” Well shame on me, for you got me again.

    Jim Lindsey, Solar Plexus LLC.

  • http://www.facebook.com/people/Shecky-Vegas/1380703171 Shecky Vegas

    If the utilities were smart, they’d jump on this bandwagon instead of trying to stop it. By acting as the “middleman” between distributed energy generation and normal users, they could keep themselves in business. The profit margins would be smaller (strike one), they’d have less control over energy generation (strike two), and they’d lose their monopolies over the masses (strike three), but at least they’d stay in business.
    Oh, who am I fooling? Those greedheads will never learn. (Game over)

  • Mark W

    I’ve all ready left the utilities company behind and went solo & abandon the grid with solar power battery storage.
    I’m not supporter of this new movement & Dr Geoff Evans does not take into account is people like me who have retaliated against such ideas to combat the higher cost of electricity by not paying solar subsidies to such movements or feed in tariff subsidisation through main grid revenues as a former customer of the utility grid. So inturn I got nothing to worry about Solar Citizen lobby groups, but been independent give me better overview of the new group agenda. In fact if people were to become independent like myself Dr Geoff Evan would have a hard case to arguing for more feed in tariff payments, given the grid charges would have to increase to huge amount in maintains costs from a limited revenue customer base source, which I’m no longer apart of that system which pays to maintain the utility grid which Dr Geoff depend a upon.

  • http://twitter.com/carlptweet carlp

    Neglected is the top priority of utilities– reliability and stability. Their number one job is not making your TV turn on. The number one job is making sure your TV doesn’t explode due to voltage swings.
    A lot of the time the grid has too much power, and a lot of the time the AC phase angle is wrong. Generators make money solving this problem. But solar systems traditionally pretend the grid is perfect and needs their power. They don’t really deserve to get paid retail prices for a product that isn’t even wholesale quality. If you can’t turn your generator off when there is an oversupply, you are part of the problem.
    Some solar systems using Apparent.com inverters actually can monitor the grid and do the right thing. They deserve to be paid retail prices and the utility loves it because they actually save fuel.

    • Ross

      Did you pay for that ad? That’s the second time you’ve pumped them. From the utilities point of view that may be true but the solar panel owning public doesn’t care about their troubles. Welcome to disruptive change.

      • ThomasGerke

        besides… I think almost all modern inverters can do that and some even offer/sell grid services like providing reactive power or frequency stabilization.

        • Ronald Brak

          If it was a problem, Barvaria would have blown up by now.

          • Ken

            Did you sign up to the new group?

    • Bob_Wallace

      Point me to the other one Ross and I’ll smite it as well.

      • Ross

        Sorry didn’t note the URL. I found it by looking through his post history which had about 13 posts in it.

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