Utilities and Solar Companies Battle Over Energy Rates

Posted on Oct 2 2013 - 8:02pm by Tony Gonzalez

Over the years, people have promoted solar panels as the way to save on energy costs. Installing solar panels have been touted as being eco-friendly and a way to be nice to Mother Earth. Now, another side to that story is starting to emerge.

Utility companies are afraid that they will lose so many customers (and therefore revenue) that they won’t be able to maintain their power grid or be able to afford to add on to the grid or build new power plants. So, they want to add fees and charges to businesses (and homes) that have solar power.

Several things have happened that are factoring into the decision of utility companies wanting to charge fees to solar power users. First, the price of solar systems has significantly dropped. They are a fraction of the cost of what they were when they first came out.

Second, electricity use in the United States is flat and even declining.  Because businesses have installed solar panels, utility companies will have a decline in sales because solar customers will need and use less electricity.

Last, in most states, solar customers are allowed to power swap. They trade the extra power that their panels generate during the day for electricity that they use at night. This power swap reduces the amount of money paid to the utility companies.

Many self storage facilities in the United States have installed solar systems. Their facilities are perfect for installing solar panels. They have flat, standard-sized roofs. There is easy access to the roof to install the panels and to maintain them. And with the tax credits that the government has given over the last few years, it has become less of a financial cost to install them.

Utility companies say that non-solar customers are paying extra grid costs because of the lack of revenue from solar-customers. Utility companies want to charge solar customers extra fees at least for the option of using electricity when the sun isn’t shining.

Solar installers feel that utility companies are trying to kill solar options for people. They feel that utility companies are punishing people for buying less electricity.

So what are self storage facilities (that have installed solar panels) to do?

Take Decatur Self Storage in Decature, Texas. They installed solar panels on their facility. They anticipate that the panels will produce over 100% of the storage facility’s electrical needs. The owner also estimated that the solar panels added an increase of $250,000 value to his storage business.

Will his city’s utility company start penalizing him for producing his own electricity and charge him extra fees for the ‘option’ of using the grid on non-sunny days?

What bout Access Self Storage? They have facilities across the state of New Jersey. Three years ago, they installed solar panels on 8 of their facilities. Those panels will generate over one million kilowatts of electricity every year. This will help offset their demand for electricity from the cities where the facilities are located.

Will their cities charge Access Self Storage extra fees because they have gone solar?

Only time will tell.

Sources Used:

“Paying for sunshine: Utilities, solar companies in fight over energy rates.” Marietta Daily Journal; 2 October 2013.

“Radiance Solar Completes 100 kW Solar Installation.” PRLog; 9 January 2013.

“Access Self Storage to install solar on six N.J. properties.” N.J. News; 15 June 2010.