NRDC and US utilities team up in calling for additional fees for rooftop solar system owners

In response to more families solar-powering their homes, the Natural Resources Defense Council (NRDC) has joined forces with US power utilities in a petition to charge these consumers a fixed fee. The growing number of rooftop solar power systems in the USA puts electric utilities at an unfair disadvantage, NRDC said in a public statement.

When households are able to generate their own solar power whilst still tapping into electricity from traditional utilities, utility industry revenues drop–but budget allocations for infrastructure remain the same. This results in a financial discrepancy that unfairly hurts utilities, said Nathanael Greene, renewable energy policy director of NRDC, explaining the organisation’s position.

Solar power proponents have expressed their disapproval, saying the petition to charge consumers extra for using solar power only discourages the use of renewable resources. Currently, most solar-powered homes in the US benefit from ‘net metering’ policy, which pays consumers for any excess power that their panels generate. Power utilities have been lobbying for an increase in fixed-rate fees based on losses allegedly incurred due to this arrangement; infrastructure fees for other consumers are usually bundled in with per-kilowatt-hour usage charges.

As the dialogue between both factions continues, they look forward to drafting a policy change that will sustain both renewable energy use and commercial electric utilities. If regulatory bodies agree to separate power grid fees from consumption fees, a high fixed rate for grid usage shall no longer be necessary, they say.

These developments, are an interesting contrast to the current situation in Australia for a few reasons. Firstly, American net metering entails payments whose value is equivalent to the value of retail electricity–i.e. the price paid for one kWh of power from the grid is the same as the credit applied to a solar customer’s bill. By contrast, in Australia net metering simply means that solar systems are allowed to export power to the grid, but the rate paid for doing so is significantly lower than the amount paid for electricity from the grid. In Australia, there is no net metering to fight for in the first place–that battle has already been lost in most states. Yet utilities here in Australia have nevertheless continued to press for similar fees to be levied on solar system owners.

Also interesting is the approach being taken by the NRDC–a US-based environmental NGO–in working with utilities to try to find a sustainable solution that will both work for utilities while also encouraging uptake of renewables. By nature, the NRDC is ideologically opposed to many of the goals of the electric utilities industry when it comes to environmental policy. However, in working with utilities on this narrow goal, the organisation seems to be attempting to make its future, larger battles easier to win: by separating the costs associated with the delivery of electricity from the cost of electricity itself, there will be greater opportunity to get utilities on board in expanding energy efficiency programs encouraging more rooftop solar.

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