The first quarter of 2014 was another big one for the U.S. solar industry, with 74 percent of all new electric generating capacity across the country coming from solar power. The 1,330 megawatts of solar photovoltaics (PV) installed last quarter bring the total in the U.S. up to 14.8 gigawatts of installed capacity — enough to power three million homes, according to GTM Research and the Solar Energy Industries Association (SEIA).
In addition to being the largest quarter ever for concentrating solar power, a method of large-scale solar generation that uses a unique ‘salt battery’ to allow the solar plant to keep producing power even when the sun goes down, it was also the first time in the history of SEIA’s reports that residential solar installations surpassed commercial in the same time period. 232 MW of residential PV were installed in the first quarter, compared to 225 MW of commercial solar.
The remarkable growth of rooftop solar across the U.S. is sparking battles in multiple states as customers, utilities, and the solar industry wrestle with how solar customers should be compensated for the excess power they send back to the grid and whether they should be charged additional fees for maintenance and other costs incurred by the utility. And those fights will likely spread, considering more than one-third of the residential PV installations in the first quarter came online without any state incentive, another first.
Solar-friendly policies like incentives are particularly important for ensuring middle class families are able to adopt solar power for their homes. And, as a recent analysis by the Center for American Progress found, it’s middle class families that are driving the rooftop solar revolution in the U.S., as “more than 60 percent of solar installations are occurring in zip codes with median incomes ranging from $40,000 to $90,000.”
This revolution is a threat to utilities’ current business model, since more customers going solar means they’re buying less electricity from the utility. The result in several states has been a push by utilities to scale back incentives or even charge solar customers an additional fee. In Arizona, for instance, Arizona Public Service (APS) has aggressively sought to undercut residential solar and last fall, the state’s energy regulator voted to add what amounts to a $5 per month surcharge on solar customers. The decision was widely viewed as a compromise, particularly considering the considerable amount of money spent by APS and outside groups, several of which were funded by petrochemical billionaires Charles and David Koch.
The fight in Arizona is clearly far from over, however, as a new interpretation of state law could lead to customers who lease their solar panels being forced to pay property taxes on the systems — a move the state’s solar advocates say is again being driven by APS.
In Oklahoma, the possibility of an additional fee being assessed on customers who install their own solar panels or small wind turbines sparked outrage and prompted Gov. Mary Fallin (R) to take the rare step of issuing an executive order emphasizing the importance of renewable energy and equitable implementation of the new legislation.
Even San Antonio’s solar-friendly municipal utility, CPS Energy, shocked solar installers recently by proposing an additional fee on solar customers that would be even larger than Arizona’s. Advocates are currently working to reach a compromise with the utility before the proposal moves to the city council for a vote.
In these various battles, the utilities often claim that solar customers aren’t paying their fair share of costs. But an increase in residential solar not only reduces the amount of electricity coming from polluting sources like coal-fired power plants, it provides a clear value to the utilities that’s often left out when they argue for additional fees. Solar generates during peak hours, when a utility has to provide electricity to more people than at other times during the day and energy costs are at their highest. And solar panels actually feed excess energy back to the grid, helping to alleviate the pressure during peak demand. In addition, because less electricity is being transmitted to customers through transmission lines, it saves utilities on the wear and tear to the lines and cost of replacing them with new ones.
This post has been updated to clarify that 74 percent of electric generating capacity came from solar power in the first quarter.