Since the 1970s, the federal government has earmarked billions of dollars for renewable energy subsidies, but many government agencies and experts in the energy industry question whether taxpayers are actually benefiting from the cause given the costs involved with net metering.
In Arizona, Tucson Electric Power and Arizona Public Service have been advocating for reform in the state’s net metering policies, which allow solar users to sell their excess energy back to utility companies. The utility companies contend that solar users still use the power grid, which needs to be maintained to sufficiently sustain the demands of solar energy, yet solar producers are leaving utility companies with the burden of paying for the majority of the grid-related costs.
What this translates to is higher costs for utility consumers.
But the solar industry is fighting back.
SolarCity Corp., an Arizona rooftop solar leasing company, is supporting an initiative that would prevent utilities from changing the net metering system or raising rates for solar consumers.
“(Net metering) is an interesting (topic) because you get arguments from both sides, the right and the left, about how it is an unfair subsidy, inequitable, higher costs for lower incomes,” Tom Schatz, president of the nonprofit watchdog Citizens Against Government Waste, told the Arizona Business Daily. “It is a benefit to the wealthier people that can sell back the excess solar at a higher price.”
Schatz said it is encouraging that most people acknowledge there is a fairness issue with net metering and they are looking into ways to address the problem.
“Of course the environmentalists don’t say, 'get rid of solar'; they just say, 'fix net metering.'" Schatz said. "But it is at least something a lot of people agree is a problem,”
In December, Nevada tripled the fixed-rate fees for rooftop solar users to make sure users were paying to support the grid.
“There was a big report by the California Public Utilities Commission; the cost of net metering was $254 million in 2012 and would have increased to $1.1 billion in 2020,” Schatz said. “Median income of net metering customers was 34 percent higher than the median income of other utility customers, 68 percent higher than the median of California. So it was an interesting way to show the disparity and the fact that it is a huge benefit to higher income households.”
In 2005, Congress passed the Energy Policy Act, which created commercial and residential tax incentives and loans for various forms of energy production and extended existing subsidies such as the renewable electricity production credit.
There’s no question that solar producers are benefiting from renewable energy subsidies; the question is how much are taxpayers gaining.
Schatz questions how closely the government is paying attention to how net metering affects people and how it may be helpful to the solar industry to give them a path to no longer relying on subsidies.
“Taxpayers, I think, are aware this is something that is not working all that well in some cases, so the government is supporting, apparently, a bunch of losers; I’m not so sure about the winners’ side,” Schatz said. “So that is the deal. It is just something they should be looking really closely at.”