Utilities in the United States tend to frame rooftop and community solar as too pricey for consumers, but an expert witness recently acknowledged to Arizona regulators that utilities oppose rooftop solar because it cuts into their profits.
“The comment was stunning because it’s something renewable energy advocates have long been saying but that utilities have danced around,” writes veteran energy reporter Dan Gearino for Inside Climate News.
It came during a hearing about a rate increase proposal by the state’s largest utility, Arizona Public Service (APS). During expert testimony, the following exchange took place between Roger Morin, a consultant called in by APS to testify in favour of raising rates, and Court Rich, an attorney representing solar companies:
Rich: “Would you agree that one of the dangers to utility shareholders from the increasing growth of the prosumer is that the investments made by the prosumers with their own money may supplant investments that the utility may otherwise have been able to make and earn a return on, for the benefit of their shareholders?”
Morin: “It makes it a lot riskier and it’s even much harder to forecast demand, given the uncertain impact of prosumers.”
Rich: “OK, so you agree with my statement?”
Morin: “Yeah, I agree.”
Rich: “OK. And in fact, this is one of the many reasons that we’ve seen utilities around the country oppose many customer-sited technologies, correct?”
Morin: “That is correct.”
The exchange was captured by a local news outlet that explored how customer-side energy policies cut into shareholder profits. While APS did not address the comments directly, renewable energy advocates remarked that Morin’s statements were “refreshingly candid.”
“The APS witness here is saying the quiet part out loud,” said David Pomerantz of the Energy and Policy Institute, a non-profit energy watchdog. “I think it’s useful to have a clip like this because it can help people cut through talking points and cynical, disingenuous things that utilities tend to say.”
With Morin’s statement on the record, he added, “customers can do whatever they want with that knowledge.”
In addition to downplaying the benefits of solar, utilities also neglect to include electricity delivery costs and shareholder earnings—both of which are passed on to consumers in electricity bills—when comparing the cost of rooftop solar against other energy sources, explains the Minneapolis-based Institute of Local Self-Reliance (ILSR).
In fact, costs are comparable for utility-scale, rooftop, and community solar when power production, delivery, and grid savings are all accounted for, ILSR writes. “The truth is that local solar is often as cost-effective as large-scale solar when accounting for utility earnings.”
To help energy consumers accurately evaluate different solar energy models, legislatures “should create policies to capture the benefits of all sizes and ownership methods of building more solar energy,” ILSR adds. And they should “especially work to undo years of utility misdirection by promoting local solar.”
