Lobbyists Challenge Renewable Feed-In Tariffs

Distributed energy’s effect on the electrical grid – and on ratepayers – is coming under more scrutiny than ever.

The past couple years have seen utilities becoming more vocal in pointing out the costs incurred when they pay owners of distributed renewables for feeding power into the grid. In a particularly high-profile case, last month the Arizona Corporation Commission instituted a $0.70 charge on future customers who install rooftop solar panels, agreeing with utility Arizona Public Service that the state’s current net metering program causes those customers without solar installations to pay higher rates.

ACC’s charges were, however, far lower than APS would have liked.

Now conservative lobbying group the American Legislative Exchange Council is looking to push forward utilities’ cause. John Eick, ALEC’s legislative analyst for energy and the environment, told the Guardian that the group wants to lower residential feed-in tariffs, and perhaps even make homeowners pay a net charge for adding their power to the grid. (He didn’t speak about commercial or industrial on-site generation.)

This is a debate worth having, honestly and openly. The truth is, renewables have their downsides. As variable sources of generation come online, grid operators are increasingly having trouble balancing supply and demand. According to Long Beach, Calif., mayor Bob Foster, a California ISO board member quoted in the Los Angeles Times, “We are getting to the point where we will have to pay people not to produce power.”

The answer is not to abandon renewables, which are key to reducing greenhouse gas emissions, but to develop them carefully while modernizing the electric grid – an effort already underway. A discussion of renewables’ shortcomings is crucial – not so clean energy can be dismissed, but so it can be leveraged as much as is feasible.

Takeaway: The drawbacks of feed-in tariffs are becoming a mainstream political issue – one that companies should keep an eye on if they plan to develop on-site renewables.

Tamar Wilner is Senior Editor of Environmental Leader PRO.

Picture credit: Social Security Administration