U.S. Solar Industry Bracing for Utility Backlash Over Metering

Growing installations of rooftop solar panels are increasing concern that U.S. utilities may refuse to buy power generated by the systems, according to the Solar Energy Industries Association.

Utilities are required to purchase electricity generated by solar panels installed on consumers’ homes under so-called net- metering policies, an arrangement that may become less viable as solar systems become more common, said Rhone Resch, chief executive officer of the Washington-based trade group.

California, the largest solar market, capped the amount of panels utilities are required to connect to their grids and other states are considering similar policies. Some utilities see the requirement to buy solar power from every rooftop system as a threat to their profitability, Resch said.

“Net metering works for us now, but we’re going to see a backlash from utilities as solar penetration increases over the next few years,” Resch said today in an interview at the Solar Power International conference in Orlando, Florida.

California regulators capped the amount of rooftop solar that may be connected to the grid at 5 percent of a a utility’s power needs, and is studying the long-term impact upon their profits. Other states may consider similar actions, said Tony Clifford, chief executive officer of Standard Solar Inc., a closely held developer based in Rockville, Maryland.

“I’m really concerned about a utility pushback on net- metering,” Clifford said in an interview. “What we need is an honest assessment of the true costs and benefits of managing distributed generation and I don’t think we’ve seen that yet.”

Utilities are considering ways to offset the cost of buying solar, including Sempra Energy (SRE)’s San Diego Gas & Electric, which proposed a fee for residential solar customers, said Aaron Hall, president of the San Diego-based developer Borrego Solar Systems Inc. Regulars blocked the proposal in January.

“That would have made almost every installation lose money and prevent new projects from getting financing,” Hall said.

Developers installed 98.2 megawatts of residential rooftop solar panels in the second quarter, according to SEIA.

To contact the reporter on this story: Christopher Martin in New York at cmartin11@bloomberg.net

To contact the editor responsible for this story: Reed Landberg at landberg@bloomberg.net

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