A forward-looking solution to rate reform, for when solar costs hit bottom.
John Sterling is Senior Director of Research & Advisory Services for SEPA, the Solar Electric Power Association. Contact him at firstname.lastname@example.org.
Distributed photovoltaic (PV) solar has taken off in recent years. Witness the nearly 1 gigawatt (GW) of new residential solar that was interconnected in 2014 alone. Indeed, this renewable resource has taken hold in many markets. It represents a tangible choice for consumers seeking to take control of their energy consumption.
Yet at the same time, this great success story is being undercut by the state-by-state debates over net energy metering and retail electricity rate reform now occurring across the country. The discussions surrounding these issues have become just as divisive and intensely fought as many other polarizing national debates.
These arguments are also extremely short-sighted. All the parties involved - utilities and developers alike - are focused on today's rate structures, today's solar costs and today's market. But with solar costs still in steady decline, this kind of tunnel vision is counterproductive. The solutions that utilities propose today will fall short in the coming years, as the costs of solar PV continue to fall.
What we need is a broader view of rate reform, based on a future with stably priced solar and the rates likely to be in effect when that price stability first occurs. Such a scenario - with rates that cover utilities' fixed costs while providing consumers with the right pricing signals - could generate attractive benefits for all stakeholders.