Florida and California consider changes that could 'decimate the rooftop solar market,' experts say
The crux of the issue is a practice called “net metering,” in which the electricity solar panel owners send back to the grid is removed from their monthly bill. The credits are applied at the same retail rate at which electricity is sold to consumers. That’s a higher rate than the wholesale price at which utilities buy electricity from large-scale producers. For example, if the retail rate is 30 cents per kilowatt hour, the amount a utility would pay a bulk producer — like a commercial wind farm — might be 15 cents per kilowatt hour. The difference covers the costs of building and maintaining the electric grid and the utility’s other overhead costs. (Utilities’ profit margins more typically come from their capital investments.)
Net metering encourages homeowners to plunk down the high upfront costs of solar panels, which often cost upwards of $15,000, because they enjoy bigger savings on their electricity bills than they would by selling energy at the lower wholesale price.
As more and more solar panels are installed, the burden of paying for the utility’s overhead and grid maintenance costs grows more concentrated on non-solar customers — or, at least, so the utility companies say.
In Florida, state Sen. Jennifer Bradley, a Republican, wrote a bill that would switch from utilities paying solar customers the retail price to the wholesale price, with current solar panel owners getting a reprieve for 10 years. The Miami Herald and the nonprofit newsroom Floodlight reported that a lobbyist for Florida Power & Light (FPL), the largest electric utility in the state, wrote the bill and sent the text to Bradley’s office. The measure passed the Senate Regulated Industries Committee in January by a vote of 6-2, but it has many more hurdles to clear before becoming law.
The crux of the issue is a practice called “net metering,” in which the electricity solar panel owners send back to the grid is removed from their monthly bill. The credits are applied at the same retail rate at which electricity is sold to consumers. That’s a higher rate than the wholesale price at which utilities buy electricity from large-scale producers. For example, if the retail rate is 30 cents per kilowatt hour, the amount a utility would pay a bulk producer — like a commercial wind farm — might be 15 cents per kilowatt hour. The difference covers the costs of building and maintaining the electric grid and the utility’s other overhead costs. (Utilities’ profit margins more typically come from their capital investments.)
Net metering encourages homeowners to plunk down the high upfront costs of solar panels, which often cost upwards of $15,000, because they enjoy bigger savings on their electricity bills than they would by selling energy at the lower wholesale price.
As more and more solar panels are installed, the burden of paying for the utility’s overhead and grid maintenance costs grows more concentrated on non-solar customers — or, at least, so the utility companies say.
In Florida, state Sen. Jennifer Bradley, a Republican, wrote a bill that would switch from utilities paying solar customers the retail price to the wholesale price, with current solar panel owners getting a reprieve for 10 years. The Miami Herald and the nonprofit newsroom Floodlight reported that a lobbyist for Florida Power & Light (FPL), the largest electric utility in the state, wrote the bill and sent the text to Bradley’s office. The measure passed the Senate Regulated Industries Committee in January by a vote of 6-2, but it has many more hurdles to clear before becoming law.
