Boise financial adviser Steve White used to tell his customers that installing solar panels on their homes was a good thing to do, but not necessarily a good investment.
But today, with solar panel prices dropping dramatically, his advice has changed. The solar array he had installed on his home will be paid off in eight years — and then produce all the power he uses for free for decades.
“Solar’s time has come,” he said.
Like solar homeowners nationwide, White and his wife, Courtney, connect to the grid through the local electric utility, Idaho Power. During the day and especially during the summer, their electric meter runs backwards as their solar system sends the power they don’t need out onto the grid for their neighbors to use.
That ability for individual customers to sell their extra power back to the utility is called “net metering.”
The Whites are one of 353 net-metering customers — mostly people with solar panels — who augment the power they get from Idaho Power with electricity they generate themselves. Some of those customers even get checks from the utility for producing more electricity than they use.
But that may change.
Idaho Power announced earlier this month that it wants to expand the program as demand from people with their own solar systems grows. But the investor-owned utility — which has been fighting with renewable-energy developers for the past two years to not have to purchase what it says is expensive, hard-to-integrate wind power — wants to stop writing checks to solar customers. It also wants to increase the rate solar users pay for the power they get from Idaho Power and quadruple the fees they pay to hook up to the grid.
Idaho Power officials say the added charges are needed to ensure that its other customers aren’t subsidizing the solar-generating customers.
“It really comes down to a fairness issue,” said Tim Tatum, Idaho Power cost of service manager. “It is a revenue-neutral proposal.”
WHO’S SUBSIDIZING WHOM?
White and many of the other solar customers say the proposal is anything but fair, and they are the ones being asked to subsidize other Idaho Power customers.
Solar power generators earn credits from Idaho Power. But under the new proposal, instead of getting checks when they produce more power than they use they’d lose their credits at the end of the calendar year. Tatum said these credits “would essentially be donated to the system to benefit all our customers.”
Margit Donhowe, who with her husband spent thousands of dollars to install solar panels on their Boise Foothills home this summer based on the current system, sees it differently.
“I call that stealing,” she said.
White called the proposal “an abuse of monopoly power” that removes the incentive for homeowners to reduce demand and provide power at the time — summer afternoons — when it is most needed and most costly for Idaho Power to purchase. That’s when demand is greatest from people turning on their air conditioners and farmers running their irrigation pumps.
Idaho Power pays 12 cents a kilowatt-hour to produce the peak power it needs during these periods, Courtney White said. Solar net-metering customers are paid 6.5 cents for the power they produce.
“When people invest in solar, it’s good for Idaho,” said White. “When a person writes a check for solar panels, they are subsidizing other Idahoans.”
INCENTIVES AND PROFITS
If the solar customers want to sell power and not just get a credit against their Idaho Power bill, federal law requires them to go through the process established by the Idaho Public Utilities Commission under the Public Utility Regulatory Policies Act, Tatum said. PURPA is the 1978 law that encourages small and alternative energy generation by requiring monopoly utilities to buy the power at the cost they would pay to build new power plants themselves.
So, it’s possible that larger, private solar-power producers might benefit from going through that process, said Don Reading, a economist who used to work for the Idaho PUC.
But that wouldn’t take into account the fees Idaho Power might require, insurance and other obligations. Additionally, Idaho Power has taken a hard position in its negotiations with PURPA power producers, large and small, and there’s no guarantee the solar homeowner would be able to negotiate a favorable arrangement with the big utility.
“(PURPA) may be a less bad solution for the homeowners,” he said.
Because solar power from homes would reduce demands and costs to Idaho Power, offer low-cost power during peak periods and reduce the need to transmit electricity across long and expensive transmission lines, Courtney White said she doesn’t understand why Idaho Power looked only at the costs.
“It’s the illogical nature of this move that frustrates a lot of people,” she said.
Reading said the nature of public utilities, which profit from selling power and building transmission lines, gives them an incentive to make it harder for people to put solar panels on their roofs.
“They will be progressive and build their own solar plants where they earn a profit on the plant they build,” Reading said.
Idaho Power officials say they support renewable energy. They also said the company has no plans to build a utility-scale solar project.
They point out that the new proposal does envision expanding the number of people in the net-metering program.
“Idaho Power has made this proposal to make net metering both sustainable and scalable going forward,” Tatum said.
Rocky Barker: 377-6484