Utility companies block growth of solar energy

It might be called the Sunshine State, but Florida lags behind other states when it comes to solar energy. Major utilities, which rely on coal and gas, are lobbying hard to keep solar panels unaffordable. As John Dyer reports, Florida is not an isolated case.

In sunny states such as Florida, utility companies charge hefty fees to homeowners with solar panels, thwarting the growth of solar across the country (Image credit: Thomas Kohler, flickr/Creative Commons)

In sunny states such as Florida, utility companies charge hefty fees to homeowners with solar panels, thwarting the growth of solar across the country (Image credit: Thomas Kohler, flickr/Creative Commons)

Much of the United States is awash in solar energy, but investor-owned utilities are working hard to make sure their customers keep using oil and gas to keep the lights on. This is the conclusion of an in-depth report by Rolling Stone, a respected iconoclastic American magazine that often takes aim at the power of vested interests.

While the price of solar panels in the US have decreased by 80 per cent and President Barack Obama recently renewed a series of tax credits in favour of solar energy, some of the sunniest American states such as Florida, Arizona, Nevada and Hawaii are facing new obstacles. California is the only sunny state where solar has taken off.

Sunshine State sticks with coal

The magazine found that big utilities have wielded their power in state capitols around the country to squelch efforts to make solar panels more affordable.

“Utilities are structured to be in stasis,” said Zach Lyman, an energy consultant at Washington, DC-based Reluminati told the magazine. “When you get fully disrupted, you’ve got to find a new model. But utilities are not designed to move to new models. They never were. So they play an obstructionist role.”

The result is that states such as Massachusetts, New Jersey and New York – all known for their grey skies – have more solar power than Florida, the so-called Sunshine State.

Florida households on average spend USD 1,900 a year on energy, which is 40 per cent more than the national average. Solar energy makes up less than 1 per cent of the state’s sources of electricity, with natural gas and coal comprising 84 per cent, according to state regulators.

“It defies logic,” said ex-Florida Governor Charlie Crist, a former Republican who switched to the Democratic Party. “It’s absolutely absurd.”

Stone Age of renewable power

At issue in states like Florida is net metering, or the practice of big utilities purchasing power from homeowners when the solar power panels on their roofs generate excess electricity.

When solar panels first became popular, utilities usually purchased that excess power at the same rate they charged for electricity. But as solar power has grown, utilities have come to realise that solar panels have now become their competitors.

And they are in a position to do something about it.

In Florida, utilities were among the top political donors in the state, spending USD 30 million on political contributions and lobbying. They employ a lobbyist for every lawmaker in the state capital in Tallahassee.

“We live in the Stone Age in regard to renewable power,” said State Representative Dwight Dudley, a Democrat who is in the minority in the Florida legislature. “The power companies hold sway here, and the consumers are at their mercy.”

Solar panels on the November ballot

The industry has put a question on the November ballot — when voters will also vote for president — that will allow utilities to charge hefty fees and pay whole electricity rates on homeowners with solar panels.

Critics say the measure would make solar panels far less economical, and many homeowners will not be able to afford the panels. But they expect the ballot measure to succeed.

“When your opponents have no ethical foundation, have unlimited resources and are willing to say and do anything to defeat you,” said Stephen Smith, director of the Southern Alliance for Clean Energy, a Florida non-profit that opposes the ballot question. “It’s a tough hurdle to overcome.”

Nevada is the Saudi Arabia of solar

Similar efforts have succeeded in Arizona, Nevada and Hawaii – three perpetually sunny states – where state regulators in recent months allowed utilities to pay less to solar panel owners for generating electricity while at the same time charging them fees for maintaining regional electric grids.

“We are the Saudi Arabia of solar, with an abundance of sunshine just waiting to be tapped for our own use and eventually to be exported as a commodity to other states,” said an editorial in the Las Vegas Sun, the newspaper of record in Nevada, late last year. “Instead, a decision by the Nevada Public Utilities Commission last week doesn’t just chill the use of rooftop solar panels but seems to punish those who are pioneering its use, by making it financially unattractive to homeowners.”

California remains the exception

Only in California — arguably the most important market in the US — has the solar industry made gains. The state has half the total solar capacity installed in the US.

Last month, California officials declared that utilities would pay retail prices to solar panel owners for their excess energy. But the panel also declared that owners would need to pay fees to hook up their solar panels to electric grids.

While California utilities companies said the new rule would add USD 300 to ratepayers’ bill, SolarCity, the biggest American rooftop solar installer, said the decision was a good compromise.

“Solar customers have to pay more, but it’s still a viable solution and it will still allow for a growth market in the state, and at the same time provide more benefits to the grid,” said SolarCity Chief Executive Office Lyndon Rive.

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