The solar war between entrenched utilities and net metering newcomers is heating up. But utilities need to chill, according to a new report out of the Department of Energy’s Sunshot Initiative brain trust.
“Focusing exclusively on customer-sited solar PV and net energy metering (NEM) as the main driver of declining utility revenues fundamentally mischaracterizes the real, more important reasons why some utilities could be collecting insufficient revenue and consistently falling short of their authorized returns on investment,” argues North Carolina State University’s Clean Energy Technology Center and Boston-based Meister Consultants Group in their study, Rethinking Standby and Fixed Cost Charges: Regulatory & Rate Design Pathways to Deeper Solar PV Cost Reductions (PDF). “Simply put, rate structures that target solar PV to the exclusion of the many other causes of utility revenue erosion and cost shifts from some customers to others constitute undue price discrimination against solar PV.”
There are plenty of other places for the utilities to assign blame, the report explains, including redundant infrastructure investment and the offshoring of manufacturing, which is becoming more of a money pit during an existential global warming crisis that demands we work more locally than ever.
Sure, “sluggish economic growth” is also a drain, the report adds, as well as greener customers who are using less juice. But if you think a business model staking its financial future on the increasing consumption of coal, oil and methane actually has a future, well then … I’ve got a Hummer to sell you.
NC State and MCG’s position paper, birthed out of Sunshot’s Solar Outreach Partnerships (SolarOPs), recommends a three-pronged “basic strategy” for utilities looking to wise up and claw back some grumpy money.
Revenue decoupling would levy fixed or volumetric charges on all customers if the utility profits (shockingly) fail to meet costs, rather than singling out solar do-gooders whose excess energy can help grids shoulder their energy burdens.
Bare minimum charges could be handed out to zero-net pioneers, who should find it a reasonable pay-to-play compromise.
And time-differentiated rates could apportion charges more in accordance with real-time needs of all customers, including the increasing many who opt to go solar and then, say, decide to buy and recharge their electric cars in what the 20th-century once called “off-peak” hours.
It’s a new century, the report might as well have concluded, so the utilities might as well catch up. Because these evolutionary, revolutionary energy changes are coming, whether they want them to or not. The utilities should join the 21st-century while they still have the attention of a global population that’s seems plenty happy to shrug, unplug and determinedly build ways around them.
This article appeared in Solar Energy
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