Power cut

Could Colorado’s solar industry lose momentum as incentives ratchet down?

Dennis Schroeder/NREL

As the solar industry continues to boom nationally, Colorado could be falling behind. The National Solar Foundation found Colorado’s solar job growth to have stagnated in 2013, while 90 percent of the country saw solar job growth. The organization’s National Solar Job Census, released in February, dropped Colorado by three ranks in terms of solar jobs, though still claiming the respectable rank of nine.

Many in the solar industry attribute the recent lull in growth to uncertainty surrounding net metering, the process by which Xcel Energy compensates customers with rooftop solar panels for the energy their photovoltaic systems contribute to the grid. The ratcheting down of Xcel’s Solar*Rewards program, a program designed to incentivize installation of rooftop solar, could also be an inhibiting factor in the growth of Colorado’s solar industry.

“Historically, the program has been one of the primary drivers of people installing solar in Colorado,” says Namaste Solar Vice President Amanda Bybee of the incentives program. “It’s difficult to predict how sales will go once the incentives are gone.”

Xcel’s Solar*Rewards Program, put in place in 2006, has ratcheted down from $.15/kilowatt hour to $.04/kilowatt hour, and is predicted to go to $.03/kilowatt hour. The program was never intended to endure forever.

“We’ve always advocated for this gradual decline as a way to wean off it,” Bybee says.

The reconsideration of net metering, however, is more jarring. Xcel has requested, via its 2014 Renewable Energy Compliance Plan, a new discussion of the value of net-metering credits available to customers with rooftop solar. At present, owners of rooftop solar receive credit at full retail value for the energy their solar panels contribute back to the grid, currently at $.105/ kilowatt hour.

Xcel Energy is required by Amendment 37, passed in 2004, to offer net metering to its customers. This means owners of photovoltaic systems are credited on their utility bill for the energy they contribute to the grid. The same amendment requires Xcel to submit a Renewable Energy Standard Compliance Plan to Colorado’s Public Utilities Commission explaining their compliance with renewable energy standards. Xcel submitted their 2014 Compliance Plan in July 2013, asking for a discussion on the costs and benefits associated with net metering as part of that plan.

Xcel estimates energy produced by privately owned photovoltaic systems is less than half of retail value, $.046/kilowatt hour. The difference between this and the retail value, the company contends, should be considered a solar incentive and listed separately on customers’ bills.

“We believe that there is a use of the grid that they don’t own, they don’t contribute to, yet they get to flow their electrons one way or another and there’s a cost associated with that,” says Xcel Energy Media Representative Mark Stutz. Paying photovoltaic owners full retail value for their contributed energy, Stutz says, passes along these costs to other Xcel customers.

Xcel estimates it has paid $58 million between March 2006 and July 2013 in net metering compensation that it argues should be considered a solar incentive. Currently, what Xcel pays in net metering compensation is listed under Electric Commodity Adjustment, where power it buys from other utilities is listed.

“We can’t all seem to agree on how to quantify the value that solar energy brings,” says Bybee. “We don’t regard net metering as an incentive. We think it’s a fair exchange.”

The Public Utilities Commission has voted to sever net metering from its considerations of the compliance plan. It is now considering net metering as a separate issue.

“This is an issue of enough importance that commission needs to take the appropriate amount of time to look into these issue, give everybody a chance to participate who wants to, as opposed to attaching it to a 2014 plan where a decision needs to be made quickly,” says Terry Bote, spokesman for the Public Utilities Commission.

The commission has scheduled a public meeting April 9, when all interested stake holders will have the opportunity to present their recommendations to the Colorado Energy Office.

The Public Utilities Commission’s decision on the value of solar energy in net metering could set the tone for the growth of Colorado’s solar industry.

“In the long run I think Colorado will still be a good market place,” Bybee says. “It just might not see the same growth numbers it has seen between 2006 and 2011.”

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