Rate Redesign Can Encourage Solar, Report Says

California may be headed in the right direction by establishing a monthly charge for residential electric ratepayers to cover utilities’ fixed costs, including solar homeowners, according to a report discussed Jan. 14 by Vote Solar and the North Carolina Clean Energy Technology Center. The key to designing rates to encourage the continued advance of rooftop solar is to develop what Adam Browning, Vote Solar executive director, called “a win-win” rate structure. That’s where “bare minimum” fixed cost charges could be helpful, said Jim Kennerly, Clean Energy Technology Center senior policy analyst. California’s plan to levy such a fixed charge cost on all residential users, according to Kennerly, largely would not affect most solar homeowners. He said that’s because most of them already pay for the fixed costs of their grid connection. It mostly would affect what Kennerly called “zero net energy customers” who may also be employing high levels of energy efficiency and participation in demand response programs to completely offset the power they use from the grid. Kennerly argued that in restructuring rates, regulators need to analyze all the factors behind utilities falling short on recovery of fixed costs or of some customers subsidizing the fixed costs of others. Solar, his report says, should not be viewed “in isolation.” Kennerly further noted that time-of-use rates for residential customers can be useful in encouraging solar. He pointed to the Sacramento Utility District’s work as a model. The muni wants to fully adopt time-of-use rates by 2018 (Current, Jan. 9, 2015). Time of use rates, according to the report, would make sure solar customers with unexpectedly high power use during times of peak demand “pay the appropriate price” for the energy they draw from the grid. William J. Kelly

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Rate Redesign Can Encourage Solar, Report Says

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