State commission agrees to reduce solar energy credits

The Utah Public Service Commission agreed Friday to let Rocky Mountain Power reduce the amount of energy credits that people receive in exchange for solar power — a move that environmental advocates say will cripple the solar industry.

Electricity generated by panels that is not used by a customer is exported into the grid. Until Friday, customers with solar panels received export credit based on two different grandfathering systems. Friday’s ruling means those signing up for solar systems going forward will receive a discounted rate of 6 cents, or slightly less in winter, per kilowatt-hour (kWh) for that energy.

Most customers who have already invested in solar panels will continue to receive 9.2 cents per kilowatt-hour.

Rocky Mountain Power — the state’s largest power company — applied to have that rate reduced to an average of 1.5 cents per kWh. They argued that nonsolar customers are forced to pay more to cover energy credits for solar users.

Utah Clean Energy asked for a rate increase to 12 cents per kWh, which would be locked in for 20 years. Solar advocates said if the credits are decreased, it won’t make financial sense for people to invest in solar panels.

Yesterday, the commission’s three members, Thad LeVar, David Clark and Ron Allen, decided to lower the rate to 6 cents per kWh in the summer and 5.6 cents per kWh in the winter. The commissioners wrote that it isn’t their job to regulate environmental or public health issues. They said their job is to set rates based on a utility’s cost of service.

The commissioners said it makes sense to decide on the credit rate annually, as opposed to setting the proposed 20-year rate, because energy capacity and prices can change. They said concerns about return on investment for solar users are not relevant to Rocky Mountain Power’s cost of service.

The Healthy Environment Alliance of Utah said in a news release that it is disappointed the commission “bowed” to industry.

“Utah’s rooftop solar industry was already hurting after previous rate changes, so reducing the export credit at a time where hundreds of solar jobs have been lost due to COVID-19 is a fatal blow to rooftop solar,” HEAL Utah Executive Director Scott Williams said in a statement. “Deliberately deciding not to value the environmental, public health, and economic development implications associated with rooftop solar is a severe disservice to the customers the PSC is meant to protect.”

Customers who signed up for the export system prior to November 2017 will receive a kilowatt-hour of power back, when they need it, for each hour they sent to the grid through 2035. Those who signed up between November 2017 and Friday will receive the “interim” 9.2 cent rate through 2032.

Clarification: 12:45 p.m. Oct. 31: This story has been updated to make clearer that consumers use electricity generated by solar panels in their homes, and what they do not use is exported. It was later updated to clarify the two grandfathering systems.

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