Power companies feeling heat from solar

Solar power is becoming increasingly affordable option for many Americans, prompting an adverse response from utilities, according to Clare Foran, writing in National Journal.

A main point of contention is the net-metering policy, through which customers with solar panels can earn credits for surplus electricity generated during the day, which they can use to offset the cost of conventional power that they use when the sun is not shining.

Foran writes, “Net-metering has functioned as a kind of subsidy for solar power, and solar advocates want the policy to remain in place. Utilities, however, argue that now that solar has become more affordable, these subsidies should be scaled back or eliminated altogether.”

She quotes Richard McMahon, vice president for energy supply and finance at the Edison Electric Institute, as saying, “What we're concerned with primarily is the rate at which the utilities are expected to pay for the surplus power generated by consumers using solar panels. That's what's known as the feed-in tariff, and these tariffs are set much higher than at market rates. These subsidies were put in place when solar was in its nascent stages but now it's outgrown the need for them.”

On the other hand, she quotes Will Craven, a spokesman for the Alliance for Solar Choice, as saying, “Earning a credit for the electricity that feeds back into the grid is only fair. Really what utilities are attacking right now is the customer's right to use less electricity. When solar was a boutique energy source that was only available to the wealthy, it was something utilities could tolerate. But now that solar costs have come down greatly, they are threatened by us because we represent really the first competition they have ever had.”

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