SCARBOROUGH — I would like to comment on the Maine Sunday Telegram’s support for the “alternative system for pricing power generated by rooftop solar panels” (“Our View: Solar power’s growth calls for new system,” Jan. 24). As a residential customer with rooftop solar panels, I disagree that “there’s a lot to like about the idea.”
Under the alternative system, a Public Utilities Commission-designated entity would buy all solar power that comes onto the grid from homes and small businesses for a specified price under a long-term contract. The first red flag is that it generates a new bureaucracy, without ever saying how much it would cost to manage such a system.
Also, to require that solar generators sell power at a fixed price that doesn’t change for 20 years, only to have to buy back that same power at market prices, is a totally unacceptable risk. There is just too much uncertainty in the projected cost of conventional electricity.
I could not understand how the Maine Public Advocate’s Office, in its report outlining the alternative system, reached the conclusion that the financial risk of solar installation would be lowered by having a 20-year contract to sell solar power. Any estimate of the value of solar over the next 20 years has to rely on many assumptions and could be way off.
An improvement to the alternative system would be to set the 20-year contract price for solar power sales at a price relative to conventional electricity (meaning standard offer electricity cost plus some amount), not an absolute price. Even with that, I am not confident that the marketplace will value solar electricity high enough, primarily because there is no financial value for carbon dioxide, sulphur oxide and nitrogen oxide reductions.
I found it interesting that nowhere in the Public Advocate’s Office report does it say that companies have been identified that would be willing to pay the rates for the 20-year solar power contract that the report claims we can expect. Net metering, on the other hand, is a simple system, easily administered by Central Maine Power or any other utility company.
I installed solar rooftop panels in 2012. Yearly savings (after federal rebate and Efficiency Maine rebate) were one-twelfth of the cost of the project. This means that if the price of electricity remains constant, it would take 12 years to recoup the initial cost. Adding financing costs, the payout would be even longer – and add another two years to the payback if you have to replace your roof.
That is with net metering. But at least with net metering, rooftop solar generators will not pay anything for their usage of solar-generated electricity. To be fair to people who installed rooftop solar systems before installation costs came way down, I would recommend that all current rooftop solar producers be allowed to stay with net metering indefinitely, if they so choose.
I also disagree with the argument that grid-connected solar customers are shifting transmission costs to non-solar customers. Everyone who pays for electricity knows that about half their electric bill pays for the electricity, while the other half pays for the transmission infrastructure and maintaining delivery capability.
As evident in the PUC’s 2015 Maine Distributed Solar Valuation Study, rooftop solar systems already reduce the amount that everyone pays for electricity. During peak hours on hot sunny days, when conventional generation costs are high, solar is out there reducing the amount of high-cost electricity that the grid operator must pay for.
So while about 1 percent of the power capacity transmission costs are being distributed to the non-solar generating consumer, the savings from solar power generation are also being distributed to those same customers.
One important exception to keeping net metering going forward should be the case of centrally generated power for multiple users, such as community solar farms. In these cases, generators should pay for transmission, since the power is going to other users.
These are generally larger systems that benefit from economies of scale and clearly take advantage of distribution (not just storage). It is more likely that large-scale solar farms would earn a reasonable return under the alternative system.
The alternative to net metering would make it unattractive for individuals to install rooftop solar. With the increased uncertainty in payback, I would not install rooftop solar today under the alternative system. The unpredictability of future grid electricity cost is just too risky.
Reaching 1 percent of Maine’s total power with solar shouldn’t drive drastic changes in policy that add bureaucracy and either reduce incentives for clean energy or increase the financial risk to small solar generators. Solar energy is good for Maine. Let’s keep it attractive to grow.