Moderated by Rick Badie
Two bills proposed during the 2014 legislative session aim to flip the switch “on” for solar energy, virtually an untapped resource in Georgia. Today’s guest writers discuss the expansion of renewable energy statewide and the impact on consumer rates and pricing.
Non-solar customers will pay twice
By Joel Foster
Georgia residents could see their energy rates go up as a result of a bill that will likely be revived in some form in the next legislative session: House Bill 657, the Rural Georgia Economic Recovery and Solar Resource Act.
HB 657 would create an arrangement that forces utility customers without solar panels on their property to subsidize those with them — a system referred to as “net metering.” While proponents of the bill presents it as “free market,” the effect it would have are anything but.
Net metering policies give solar energy customers a credit at the full retail electric rate for excess electricity they generate. That retail rate includes the price of generating power and the fixed costs associated with the transmission, distribution and maintenance of the electric grid that all electric consumers rely on.
Anyone who’s been in business knows you can’t buy your product at retail and sell it at retail and stay in business long. Customers that generate some of their own power avoid paying some of these costs because of the way rates were originally designed. Electric companies are then forced to buy back any excess power at prices above the wholesale prices they would pay absent this special deal.
Even though solar customers produce their own power, they must remain connected to the grid to buy power when their systems are not producing. Solar customers are often simultaneously selling electricity to electric companies on the grid. Thus, solar customers benefit from the grid at a rate almost double that of non-solar customers. The result is solar customers avoid paying their fair share of maintenance costs even though they benefit from the grid the most.
Costs of maintaining the grid are shifted to non-solar customers. Add to this the incentive of solar-installation companies now offering solar financing models, complete with long-term contracts to access taxpayer-funded federal subsidies, and the cost to non-solar customers becomes twofold.
The negative effects on residents and utilities in states with net-metering policies are similar across the U.S. A recent study found Californians who don’t install net-metering devices will pay an extra $1.1 billion in shifted costs each year by 2020. Non-solar customers of Pacific Gas & Electric, California’s largest utility, will pay an additional $700 million per year due to cost-shifting effects. In Arizona, the amount paid by solar customers is actually below the utilities’ costs of serving those customers.
Energy freedom means, among other things, an individual’s freedom to choose one’s energy source, including renewable sources like solar, without putting an undue burden on other customers. Net metering has proven to be failed policy already in a number of states. There is no reason the results in Georgia would be any different.
Joel Foster is grassroots coordinator and communications director of Americans for Prosperity Georgia.
Treat solar customers fairly
By Mark Bell
The growth of solar energy nationwide has sparked a lively public debate about how energy is delivered and priced.
A cooperative coalition led by the Georgia Public Service Commission, solar professionals and Georgia Power has created new opportunities for solar development without any upward pressure on electric rates.
Georgia is one of the fastest-growing solar markets in the country. Contracts for new solar development in the state show that solar can be competitive with other energy resources. Rooftop solar families, schools and businesses can control electricity bills like never before.
Like many innovative technologies, this new solar energy market is prompting a rethinking of the long-standing centralized utility business model.
Pushback spurred by interests that would rather not see a new approach to electricity has spawned proposals to saddle solar energy users with unsubstantiated charges designed to discourage solar adoption. And Georgia, with its recent robust solar growth, is no exception.
In December, the Public Service Commission considered an add-on charge for solar customers — a solar tax — and found it unjustified. At issue are the rights of private property owners to choose from a portfolio of energy options and how to apply the true value of those options to the energy grid as a whole. It’s common sense that solar customers deserve full, fair credit for their valuable energy.
The increased productivity solar energy offers to businesses, and the potential savings it can produce for homeowners, can give property owners greater flexibility in energy choices. That can be done in a way that treats ratepayers, utilities, solar customers and shareholders all fairly.
Solar energy accounts for less than 1 percent of Georgia’s energy portfolio. That is nowhere near enough to have any significant effect on the ratepayer base, despite what proponents of solar surcharges claim.
Solar brings new value to the electrical system, such as the easing of peak demand. On hot summer days, Georgia’s utilities often must purchase energy at a premium to meet demand. Ratepayers bear that cost in their power bills. Solar energy eases costs and reduces strain by providing more affordable, locally produced energy at peak times.
Solar also reduces the amount of electricity wasted across transmission lines because the user is so much closer to the energy source. Solar also uses free fuel — sunshine — which provides a hedge against rising conventional fuel prices.
These and other benefits will be part of the discussion as we work with regulators and utilities on how to make the addition of solar power a solid win in our energy mix.
Like other technology innovations, solar energy will put more options into the hands of the consumer. This can create good jobs for Georgians and offer tangible opportunities for productivity and savings in our homes and businesses.
Arbitrary charges to deter solar adoption are shortsighted and counterproductive, akin to creating charges for buying energy-efficient appliances or turning off lights. Solar customers deserve rational prices for the energy they generate and policies that protect their rights to make the choice best suited to their needs in a free market.
Mark Bell is chairman of the Georgia Solar Energy Association.
Solar power benefits state
By Stu Dalheim
Georgia is one of the 10 sunniest states in the nation but barely ranks among the top 40 states for installed solar power capacity. I see solar energy as a wide-open business, investment, and job creation opportunity in Georgia.
Georgia’s utility regulators are beginning to see the benefits of solar power, and some state lawmakers are calling for changes. If those trends continue and policymakers enable companies and individuals to choose the power they buy, the state can capitalize on its abundant source of renewable energy.
Last year, Georgia’s Public Service Commission voted to add 525 megawatts of new solar developments to the state’s 2013 energy plan. This proposal expands the earlier Advanced Solar Initiative, which is on track to bring 210 megawatts of solar power to Georgia by 2015.
This vote was a big boost for solar power in Georgia, but its impact remains confined to Georgia Power.
In most other states, a company or homeowner who wants to install solar panels can lease solar panels. These agreements allow companies that specialize in solar energy to build the solar array and then rent panels to homeowners or building owners. Solar leases enable homeowners and businesses to get the power they want at a lower or long-term fixed cost.
Under Georgia’s Territorial Rights and Cogeneration Acts, laws enacted decades ago, this solution to financing renewable energy is forbidden. We can protect and expand property rights of Georgians and end the utility monopoly on solar power by supporting legislation that gives property owners flexibility.
This year, state Rep. Mike Dudgeon, R-Johns Creek, introduced a bill to update utility regulations. Other lawmakers should work with him to remove this barrier to free enterprise.
Big businesses are buying up clean power, which will encourage more in-state investment. Google and Facebook already choose sites for data centers based on access to clean energy. Meanwhile, more companies have set clean energy goals, including local firms like Coca-Cola and Home Depot.
If Georgia wants to draw more world-class businesses, it should update its energy laws. Clarifying these regulations would help boost Georgia’s renewable energy economy. Georgia has approximately 150 registered solar companies and provides solar jobs for about 2,600 residents.
Critics often claim that solar power is more expensive than fossil fuel power. In just the past five years, solar panel costs have come down about 80 percent. Renewable energy also saves on fuel costs because, quite simply, there aren’t any. This is why companies are adopting solar power as a cost-management measure.
Georgia residents know how costly nuclear power plants can be. Nuclear and fossil fuel-fired plants also require lots of water. If Georgia removes outdated regulations, solar energy opportunities could be wide open.
Stu Dalheim is vice president of shareholder advocacy for Calvert Investment Management Inc.