Environmentalists fear new solar program could sunset installations

Environmentalists fear new solar program could sunset installations

Michele Ellson
solar panels

Photo courtesy of Go Solar California.

Local environmentalists fear changes Alameda Municipal Power – which bills itself as “the greenest little utility in America” – plans to make to its solar program could bring an end to new solar installations on the Island.

A final proposal for the new solar program, which could for the short term create tiered service for solar customers, could come before the Public Utilities Board in May.

The utility's existing program, net energy metering, was created under a state law that requires power companies to set aside five percent of their energy load for solar customers, an amount equal to 3.6 megawatts of AMP’s load. So far, residents and businesses have installed or plan to install systems that can generate 2.1 megawatts.

Under the existing program, AMP collects a surcharge on its roughly 30,000 customers' monthly bills to pay for rebates intended to promote solar energy by making the systems more cost-effective to install. The utility’s plan is to collect $4.2 million over a decade – the program runs through 2017 – to fund the rebates.

In a December report to the board, senior energy resource analyst Alan Hanger said a potential project AMP staff is aware of could consume much of the rest of the program’s availability – a situation that may have prompted the proposal to create the new solar program, which is not required by the state. Home-based projects typically generate about three kilowatts of power.

Under the proposed feed in tariff program, residents and businesses who go solar would pay the full cost of the energy they use, minus the amount of energy they put back into the system – for which they would be paid a lower rate than the utility will charge.

The head of Community Action for a Sustainable Alameda, David Burton, said the proposed program would create a disincentive for future solar installations because the changes will increase the amount of time it takes to pay them off – just as solar was becoming a financially feasible proposition for property owners.

Kevin Good of Sun’s Free Solar, which buildss solar systems, said the changes would stretch the amount of time it would take a property owner to pay off a solar array from seven to eight years to a dozen years or more. And that extra few years will be a deal breaker for most people who would otherwise have considered solar, he said.

“I would tell you categorically: There will be no solar program if they do this,” Good said.

Based on 2012 energy costs, a solar customer in the new program would earn 9.3 cents per kilowatt-hour their solar installation generates and pay out 16.6 cents for every kilowatt-hour they use, Hanger’s report says; it says an average homeowner would pay $22 a month for electric based on those rates. Burton said the amount of money solar users would pay under their contracts with the utility would grow while the amount they earn would remain flat.

“That delta is so big again that nobody will install solar anymore,” Burton said Friday.

And Good questioned AMP’s numbers, saying homeowners and others who show interest in installing solar panels typically use more electricity than the utility’s calculations rely on – which could mean bigger bills.

But AMP’s interim general manager, Ronald Stassi, said the charges are intended to protect the non-solar customers who make up the bulk of the electric company’s ratepayers from having to further subsidize those who have solar installations after the rebate money runs out.

The current charge customers pay to support the state-mandated solar program is 0.00145 cents per kilowatt-hour used, rate information on the utility's website shows.

Stassi said the utility’s existing, lower cost program – set up to “kick start” interest in solar power – still has room for new customers.

“No one has done anything other than talk so far. But they’re moving in that direction,” Stassi said. He said the utility is aware of a government agency that may be interested in installing a solar system, but plans haven't been offered yet.

Burton, Good and Stassi all said the cost to install solar arrays has dropped dramatically, due to wider availability of cheap solar panels and subsidies to install them. Stassi said he’s seen the cost of residential solar installations drop from as much as $28,000 to $10,000; Good said the cost has dropped from about $10 a watt to $4.50.

Some 189 homeowners and 20 commercial customers have either completed solar installations or in the process of doing so, according to the utility. The existing program offers customers credit for up to one megawatt of generation capacity; the new program would fully credit customers with larger systems. A megawatt is enough energy to power 750 homes or more, depending on the amount of energy homes in an area typically use.

Burton said the utility’s proposal is too focused on dollars and cents and should also take into account the societal benefits of more solar power. He said increasing the number of solar arrays on the Island will help lower greenhouse gases – a city climate plan goal – and provide local power that can be used after an earthquake or other major disaster. (Stassi said the utility of the power solar customers generate during a disaster will be limited at best, though Hanger, in his report, lists local capacity as a benefit for the utility.)

“There are other benefits to the community that would make an argument for a higher rate,” Burton said.

In his report, Hanger says social benefits like jobs created by the solar industry “should not be in AMP’s rate.”

Utilities in Palo Alto and Austin are among those who have adopted feed in tariff programs, it says. Larger, investor-owned utilities with 75,000 customers or more are required to put the programs in place.

Stassi, who said the utility has had “positive, ongoing discussions with the environmental group, said he’s willing to consider a program that offers rising prices for solar power along with cost increases.

Burton said the group is looking for something “equal to or better than” the current program.

"Definitely, don't make it worse," he said.

Comments

Submitted by Terry Winckler (not verified) on Mon, Mar 17, 2014

If I read this right, the average customer with solar would be paying AMP $22 per month as their share of distributing power on the system. Seems high compared to what is being proposed for solar users elsewhere in the country (less than $5 per month as their share of using and maintaining the distribution system.) Where's the incentive to do the right thing in Alameda if this goes through?

Submitted by Scott Benson (not verified) on Mon, Apr 21, 2014

As a solar power customer in Alameda, I already pay Alameda Power $5 a month just so they can send me a bill for zero power use.