While the Use of Renewables Grows, Is Net-Metering in Danger?

A recent post on Vox.com carried the provocative headline that “solar power is growing so fast that older energy companies are trying to stop it.” And while distributed solar power might not be forcing traditional utility CEO’s into sleepless nights and a bunker mentality on how to stop its growth, there’s no doubt that the use of solar power – and renewables in general – is making gains.

According to the Solar Energy Industries Association’s (SEIA) recently released report, Solar Means Business 2014, as of mid-2014 there were 4,531 MW of commercial solar PV installed on 41,803 business, non-profit and government locations throughout the U.S., and that number is growing. Among the companies highlighted were IKEA*, which according to the report leads the nation in the percentage of its facilities that are solar powered (with over twice the percentage of the next leading company), and Volkswagen, which according to SEIA generates enough from its solar installations to power 400 e-Golfs each year.

Professional sports teams are making greater use of renewables as well. The Seattle Mariners are the latest Major League Baseball team to make a commitment to solar, having announced completion of a rooftop solar system at their Spring Training facility in Arizona earlier this week. And the recently released NHL Sustainability Report detailed the efforts of numerous teams, including two that have installed solar panels on the roofs of their arenas and the commitment of the Minnesota Wild to wind, which included offsetting electricity use at all of its home games during the 2011-12 season via wind-power purchases. And Vestas is sponsoring Team Vestas Wind in the Volvo Ocean Race, using the teams website to encourage others to “join the race” by making an online pledge to commit to one or more actions designed to benefit the environment.

Vox.com noted that “even though solar provides just 0.4 percent of America’s electricity, it’s growing at a shocking rate.” Rooftop solar generation has roughly tripled since 2010. By some estimates, a new solar system is installed every four minutes in the United States. This increase in solar has been fueled – pun intended – at least in part by the net metering laws currently on the books in in 44 states and Washington, D.C., that allow solar-powered households and businesses to sell their excess electricity back to the grid at retail prices.

But all is not sunny. Because of the aggressive implementation of distributed generation, a recent Washington Examiner article noted that there are now proposals in 20 states to consider either scaling back or eliminating net-metering laws. Those proposals, as also noted by Vox, are creating odd political dynamics. While the conservative American Legislative Exchange Council has drafted model legislation to pare back solar subsidies, arguing that continued increased rooftop solar installations will cause utilities to raise rates on those without rooftop solar installations, other conservatives (including some Tea Party groups) oppose efforts by government to restrict rooftop solar or impose new fees or taxes on it.

So where does that leave us? Businesses and homeowners are continuing to install and make more commitments to the use of solar and wind energy, but, state-by-state, opponents are offering proposals to scale back or alter the potential economic benefits. As a result, as is often the case, the rift is likely to widen before it narrows. Let’s just hope that the rift doesn’t get too wide, lest we all end up on the losing side of the debate, further concentrating instead of further diversifying the United States’ total energy portfolio.

*APCO client