The future of rooftop solar is currently up for debate before the Utah Public Service Commission. In a few months, the Commission will determine the value of the credit that future rooftop solar customers receive for the clean energy they send the grid. This decision will affect whether going solar is an economically viable option for future rooftop solar customers.
Determining the value of rooftop solar is complex: it requires assigning a dollar amount to the benefits that result from rooftop solar. These benefits range from reduced power plant emissions to the avoided costs of purchasing fuel to run those power plants. The value ultimately depends on which costs and benefits are considered. Right now, the results from two different studies are before Utah’s Public Service Commission: one from Rocky Mountain Power, another from Vote Solar. Their results are drastically different.
What is the value of solar energy?
According to Rocky Mountain Power, not much. They’ve proposed to reduce the compensation that new solar customers receive for the clean energy they export to the grid to 1.56 cents per kilowatt-hour (kWh). This proposal is an 84% reduction compared to the current solar credit of 9.2 cents per kWh. The utility came to this number based on a solar study that includes generation data from 70 homes and businesses and only considers a few of the benefits of solar energy.
Vote Solar’s study paints a very different picture. Based on data from 1,214 solar customers, and a more thorough quantification of the benefits, Vote Solar has calculated the value of solar to be 22 cents per kilowatt-hour – more than double the current rate.
Why the stark difference?
Both studies include a value for avoided fuel purchases due to rooftop solar and for the line losses that are avoided when rooftop solar energy is produced close to where it is used (rather than transferred long distances across the grid). But that’s where the similarities end. All of the health and climate benefits are notably absent from Rocky Mountain Power’s study.
“Solar energy provides an array of benefits to all Utahns, including undeniable benefits to our health and climate. Applying zero monetary benefits to the health and climate benefit we all receive from rooftop solar is terribly short-sighted and narrow,” states Kate Bowman, Utah Clean Energy’s solar project manager.
But that’s not all that’s missing: Rocky Mountain Power’s study also doesn’t include the value of many other benefits that rooftop solar provides, from the capital cost of the power plants, poles, and wires that can be deferred when rooftop solar energy is generated locally to the value of solar as a hedge against volatile fuel prices.
Utah Clean Energy has always argued that any evaluation of rooftop solar must consider the full range of long-term costs and benefits in order to fairly value rooftop solar. As shown the breakdown above, the data from Vote Solar demonstrates that when the full range of benefits of rooftop solar is considered, the value of exported solar power is close to, or even above, the retail rate for electricity.
The Utah Public Service Commission is considering both studies now, and the next round of expert testimony from groups like Utah Clean Energy and others will be filed on July 15th.