NRDC and U.S. Utilities Urge Grid Payments for Solar

The Natural Resources Defense Council and the U.S. utility industry’s trade group are jointly calling for a new rate structure to account for customers that generate their own power with rooftop solar systems.

Solar panels typically don’t meet a home’s entire power needs, and these customers continue to use the grid operated by utilities, the NRDC and the Edison Electric Institute said today in a statement. Utilities collect less revenue to maintain and improve infrastructure as consumers improve efficiency and generate more electricity, an increasingly untenable arrangement, the groups said.

The agreements in principle come as more utilities seek regulatory permission to charge solar homes and businesses fixed fees for their use of the grid, most recently in Arizona and Colorado. Solar advocates have said such policies will discourage development, said Nathanael Greene, director of renewable energy policy at the NRDC in New York.

“We need the grid and need to improve it in ways that support clean energy and distributed resources,” Greene said today in an interview. “We’re trying to bring EEI and utilities into the regulatory process in a more positive way.”

Owners of rooftop solar panels “must provide reasonable cost-based compensation for the utility services they use,” the groups said in the statement. In exchange, utilities must simplify the process of connecting systems to the grid and compensate owners “fairly for the services they provide.”

Under the current policy, known as net metering, utilities must purchase excess electricity generated by customers’ solar panels. Both groups want that policy to continue, with a new mechanism that would cover utilities’ fixed costs.

Environmental Policy

The two groups often oppose each other over environmental policy and NRDC will continue to “hold the utilities’ feet to the fire,” Greene said.

Still, they agree that changes to utility rate structures would improve energy-efficiency programs and expand rooftop solar. They recommend allowing utilities to recover the costs of maintaining and improving the grid in a way that’s not tied to the amount of electricity they deliver to consumers.

“We want regulators to decouple grid charges from volumetric consumption,” Greene said. “Then the utilities can’t use net metering as an excuse for the high fixed-cost charges they want.”

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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