Though they’re getting cheaper, the cost of solar panels is still a huge expense for most households. As a result, rooftop solar users often look for leasing options that spread that cost across years so it can be offset by selling excess electricity back to the grid, but not all states allow third-party leasing.
Florida is one of five states that specifically prohibit the third-party ownership used in residential solar development. A proposed amendment in Florida could finally change that for the state, for a price. The amendment would allow leasing in exchange for allowing utility companies to charge solar panel consumers extra for keeping them connected to the power grid. Of course, giving utilities the option of charging extra maintenance fees targeting residential solar users can become a problem as was the case in Nevada.
The reason power companies have pushed for such measures comes from concerns about fixed costs. Utilities must pay for the distribution and generation infrastructure and argue that “all users pay a percentage in their bill to cover the cost of those systems,” says Jocelyn Durkay, the energy senior policy specialist for the National Conference of State Legislatures. “But having a solar rooftop system may result in a customer’s bill being virtually zero.” That loss of revenue came with less stress on the grid helping to keep down the costs of upgrading the grid to handle new demand; however, as more people install the systems, the cost of keeping fossil fuel power as a backup for renewable energy is outweighing the benefit.
Yet, with many states are trying to broaden their renewable portfolios, many utilities are starting to see the writing on the wall. Battery technology investment and interstate transmission projects are already in the works in many places where renewable energy has a foothold. Even the Florida amendment is a bit different from Nevada’s. The measure offers a compromise: Allow people to lease in exchange for giving utilities a way to recoup some of their losses. The only question is how “fair” extra fees would be when utilities are balancing rising environmentalism and operating losses.
Texas is facing its own conflicts over solar power.
Developers are expected to build about 4GW solar capacity in the state by 2020, according to a report by Bloomberg New Energy Finance. Cheap solar energy from the noon sun threatens to depress electricity prices during peak midday hours when generators profit from higher electricity demand.
Solar power also puts more pressure on coal- and natural gas-fired power producers already hurt by historically low gas prices, competition from wind power, and stagnant power demand.
Solar is expected to lower power prices by about $2.58 per MW-hour during peak hours by 2020 in Texas’s west hub, the report by BNEF found.