Utility Companies Are Punishing Solar Homeowners in Some States
Among homeowners who have adopted solar systems, the savings they get is the most popular reason for why they went solar. But not too far behind that is the benefit they can get by selling their unused energy back to their local utility company.
This is called net metering, but it’s not available everywhere. And, in some states that don’t have net metering policies in place, traditional utilities are taking advantage of it and essentially punishing solar homeowners. Find out why this is important to your solar prospects, and what you can do about it as a solar installer, and read on now.
Why Net Metering Is Important
A net metering policy requires a local utility to reimburse solar owners for every kilowatt-hour (kWh) that they don’t use and gets sent to the national electric grid. It also plays a role in helping utility providers keep their rates under control.
In states without net metering policies, utility providers can charge whatever they want for their electrical services. They can even set different rates for solar households than non-solar households. In such cases, the utility provider can charge a solar household a higher rate for the grid-based electric they use. This can sometimes wipe out any potential savings the homeowner can enjoy from their solar system.
Why Are Utility Companies Fighting Back Now?
Solar was first installed on homes in 1979, but installations were few and far between. The technology was new, extremely expensive to install, and not many people wanted it. The utility companies felt no threat from the new technology, so they didn’t object to net metering.
It wasn’t until around 2010 that solar starting growing in popularity. Utility companies started to notice that they were selling less electricity to solar homeowners, and they started to worry. So, the utility companies fabricated a story about how solar households weren’t paying their dues to help keep the national electric grid maintained and operating.
This prompted the Public Utilities Commissions in some states to grant utility companies the right to charge different fees to solar homeowners, and reduce the amount these homes would be reimbursed for their unused electricity.
The 4-Tiered Attack on Solar Customers
Utility companies in states with no net metering policies have implemented a four-tiered strategy to make it less beneficial for homeowners to go solar. These strategies include:
- Time-of-Use Billing –Time-of-use billing was created to charge homeowners more for electricity that was used during “peak use times,” which is from 4pm to 9pm. Because solar owners don’t need to rely on grid electricity as much during peak hours, utility companies charge them higher rates during non-peak hours to account for their lower use of peak hour electricity.
- Non-Bypassable Charges –The amount charged on a customer’s energy bill consists of a variety of micro-charges. These include fees for public assistance, grid maintenance, nuclear decommissioning, and more. In many states, these are deemed non-bypassable charges, so they need to be paid whether the home has solar or not.
- Demand and Grid Access Charges – Households that use a lot of electricity at one time are charged demand and grid access charges. This is once-a-month charge that applies a different rate to the amount of electricity used at peak times. For example, a household that runs the air conditioner, the dish washer, the clothes washer, and the television all at the same time will be charged a higher rate than one that only has the dishwasher and TV on.
- The Increase to Monthly Bills –In some states, like Texas, solar households are charged a minimum monthly bill regardless of how little electricity they use from the grid. In Texas, solar households are charged $30 a month, even if they sent electricity to the grid. This means they must pay $360 per year for electricity they might not have even used, thus killing any savings they get from solar.
How to Help Your Clients Overcome Increased Charges
Your customers are going to ask you how going solar is going to benefit them in no-net-metering states. So, you need to be prepared with an answer. You can explain to them that they can work around the increased charges by managing their electricity use during peak hours. For example, if they can reduce their demand during peak hours, they will be charged a lower demand and grid access rate.
Another option is to increase the amount of their solar energy storage. With more storage, your customers can rely less on the grid for all their day’s electricity use. Increased storage is more expensive, but you can share with your customers how it will essentially pay for itself since they will still have their own energy to use after the sun goes down.
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