Rooftop Solar Battle Pits Companies Against Utilities

SolarCity Corp. (SCTY), Sungevity Inc., Sunrun Inc. and Verengo Inc., companies that financed the majority of U.S. rooftop solar installations, formed a lobbying group to counter efforts by “monopoly utilities” to quash programs that support renewable energy in 43 states.

The Alliance for Solar Choice will focus initially on preserving so-called net energy metering policies that require utilities to purchase surplus electricity at retail rates from customers with rooftop solar systems, the group said today in a statement.

The solar companies are responding to “the coordinated utility attack on net metering throughout the country,” Bryan Miller, the group’s president and vice president of public policy and power markets at San Francisco-based Sunrun, said yesterday by telephone. Utility owners including PG&E Corp. (PCG), Edison International and Sempra Energy (SRE) “have opposed net energy metering since its inception.” The group plans to lobby lawmakers and organize public campaigns.

The effort underscores the growing conflict between rooftop solar providers and power companies that disagree about the long-term sustainability of industry support mechanisms such as net energy metering.

Utilities say that as more people install solar panels at home and are compensated for the power they generate, it shifts the costs of operating their grids to non-solar users.

‘Unfair Burden’

“We are concerned that there’s an unfair burden on our customers who have not installed solar panels,” Vanessa McGrady, a spokeswoman for Edison International’s Southern California Edison, said today by e-mail. People with solar systems “are still using the distribution grid and other utility services, minus generation, but do not pay their share.”

Edison Electric Institute, an association of investor-owned power companies that serve about 70 percent of the U.S. market, in January said “threats to the centralized utility business model have accelerated” in part due to net energy metering.

California utilities have estimated that net energy metering may eventually shift as much as $1.3 billion a year in costs to non-solar customers.

“It’s not a question of being threatened by this” but rather “making sure it’s sustainable to everybody,” David Rubin, PG&E’s director of service analysis, said yesterday by phone. The utility’s primary concern is that net-metered solar customers, which may zero out their annual bill in some cases, aren’t paying to maintain grid infrastructure that’s necessary for them to ship excess power or use electricity at night when the sun doesn’t shine, he said.

Economic Benefits

The Vote Solar Initiative, a San Francisco-based advocacy group, said in a January study that net energy metering will provide economic, public health and environmental benefits valued at more than $92 million a year to customers of California’s three biggest utilities.

“Utilities almost never fret over rising costs to ratepayers,” Will Craven, a SolarCity spokesman, said yesterday by e-mail. “Yet rooftop solar, which is actually driven by consumer demand and is putting more clean energy on the grid and creating jobs, is the object of these utilities’ intense concern.”

To contact the reporter on this story: Andrew Herndon in San Francisco at aherndon2@bloomberg.net

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

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