Yet solar — especially solar power produced at the local level — is under siege. Utilities and their allies around the country are fighting hard to limit its development and are funding efforts to prevent renewable energy producers from feeding power into the electric grid. Solar energy threatens the traditional utility business model in several ways: it reduces utilities’ overall revenue; it reduces the asset base, which for some utilities reduces the profit they are allowed to earn; and it dramatically cuts the profits utilities can reap by selling power at premium prices at the times of greatest demand.
The battle to preserve and enhance the right to produce cleaner electricity and deliver it to the grid might be the most important local policy fight on the path to a sustainable economy.
NET METERING IN DANGER
By 2014, nearly the entire country — 44 states and Washington, DC — had authorized individual and community-scale solar producers to sell the electricity they produce to their local utility, a practice called “net metering,” whereby the meter essentially subtracts the energy generated from the energy consumed. Since then, however, net metering has come under attack by efforts to roll back the rules.
Much of this attack has come from utilities, joined by the American Legislative Exchange Council (ALEC), a corporate lobbying group that has also tried to block implementation of the Affordable Care Act. ALEC receives funding from fossil fuel interests, including ExxonMobil and the Koch brothers, so it is no surprise to see it siding with utilities against local control of energy.
Among the key arguments that utilities make in their campaign against net metering is that the practice subsidizes solar energy. That’s essentially a veiled way of saying that net metering increases costs, not just for the utility companies themselves, but for ratepayers as well. But this argument is just plain false. The reality is that solar is especially efficient, and its overall cost savings are substantial.
SOLAR’S COST ADVANTAGES
A major factor in solar’s cost savings is that its peak production time coincides with the time of peak demand for power. Usually that peak demand is driven by the use of air conditioning on hot, sunny summer afternoons. Because peak rates are higher than non-peak rates, ratepayers see savings when solar energy is available at those peak times. And because solar is often produced near where it’s consumed, it doesn’t require as much investment in transmission lines and doesn’t suffer the same energy losses from transmission as traditional power generation does. In addition, solar saves by avoiding the public health problems and environmental damage that result from fossil fuels.
The economic advantage of solar has been acknowledged across the political divide. A few years ago, a Georgia chapter of the Tea Party fought alongside some environmental groups to require Georgia’s investor-owned utility to accept more electricity from solar providers. Their victory, and a subsequent similar push in Florida, led to the rise of what was known as the Green Tea Party. While Tea Party members and environmental groups may differ in their reasoning, both agree that net metering offers consumers important savings.
“The battle to preserve and enhance the right to produce cleaner electricity and deliver it to the grid might be the most important local policy fight on the path to a sustainable economy.”
EQUITABLE, COMMUNITY SOLAR
Notwithstanding the cost savings and the benefits to the environment provided by solar energy, there is one valid argument against rooftop solar when it’s implemented by individual homeowners: it could be more equitable. To take advantage of rooftop solar, you have to own your roof — and there are well-documented racial, generational, and economic inequities in rates of home ownership. In addition, according to the National Renewable Energy Laboratory, only about 13 percent of homes in the US are appropriate for solar. (It helps to have a large, south-facing roof free of shade from nearby buildings and trees, and in be a region that isn’t too cloudy most of the time. You also have to own the building outright, rather than rent it or own a condo within a larger building.) This means that for many communities and individuals, this major cost-saving and climate-protecting measure is totally out of reach.
The solution to making solar accessible to everyone is to set up community solar projects. These are relatively small solar power facilities sized to serve a particular community and located in that community. Community solar installations enable all members of the community — including renters, condo owners, and homeowners whose houses aren’t well positioned for solar — to invest in a cleaner energy future and share in the benefits of reduced energy costs. Suddenly, solar power can move from a marginal sustainability solution to a significant one.
Community solar requires an extension of the net metering principle to what’s called “virtual net metering.” Under virtual net metering, the community solar installation can sell excess power back to the utility and distribute the savings back to each individual member household in the form of a credit on their bill. However, virtual net metering requires special legislation. A handful of states, such as Colorado, Massachusetts, Maryland, Minnesota, and Washington, DC, have passed the needed legislation, and more are considering it. But it’s far from being a done deal. The opposition is well-funded and is lobbying aggressively to stop it.
THE ROLE OF BUSINESS
With the future of the planet at stake, local businesses could make a big difference by engaging in the fight for community solar. Business owners have special stature and clout that make them powerful advocates. While many local issues seem to help only locally, fighting for solar power has global reach. In states that don’t yet have the legislation, businesspeople should push their governors and state legislatures to enable community solar. In states that have the legislation, they should engage with their communities and focus on getting individual projects done.
As Frederick Douglass said, “Power concedes nothing without a demand. It never did and it never will.” In the case of solar, that’s especially true — in both senses of the word.
David Brodwin is co-founder and vice president of media and communications for the American Sustainable Business Council (ASBC), and Tom Matzzie is president and CEO of Ethical Electric, an ASBC member and clean energy supplier based in Washington, DC, whose mission is to make 100 percent renewable energy available to everyone.
The American Sustainable Business Council advocates for policy change and informs business owners and the public about the need and opportunities for building a sustainable economy. Business members in ASBC’s national network have the opportunity to engage with policymakers, give public testimony, gain media exposure, write op-eds, inform the public, and more. Join the effort to forge a more sustainable economy through policy change.
The American Sustainable Business Council advocates for policy change and informs business owners and the public about the need and opportunities for building a vibrant, sustainable economy. Through its national member network it represents more than 200,000 businesses and more than 325,000 entrepreneurs, executives, managers, and investors from a wide range of industries.