Although solar energy is still a midget among U.S. energy sources, its rapid growth from a small base is beginning to make some of the big players nervous.
Solar incentives are facing increasing opposition even as PV installations are beginning to take off. Critics of solar incentives are objecting to several state and federal subsidies favoring PV, but they particularly object to aspects of net metering, the requirement that utilities allow distributed generators like owners of rooftop arrays to sell electricity back into the grid.
IEEE Spectrum reported last week that regulated utilities in a number of states—Arizona, California, Colorado, Idaho and Louisiana—have started to complain about the various benefits for photovoltaics. A key issue is whether utilities are required to pay customers selling solar electricity into the grid at wholesale or retail electricity rates, according to the Spectrum.
As Rick Tempchin, executive director for retail energy services at the Edison Electric Institute in Washington, D.C. has put it, “Paying credits at the full retail rate costs the utility money because that cost will be higher than the cost that the utility actually avoids by purchasing the distributed generation power. For example, in centralized markets, a utility can buy all of its power needs at the wholesale rate. This rate will always be less than the full retail rate it would have to pay to buy the same power from a customer.”...(IEEE Spectrum)