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SALT LAKE CITY — Clean energy advocates offer cautious optimism for new rules to temporarily govern how owners of rooftop solar systems are compensated for electricity they feed back into the grid, but the consensus comes only after the shelving of an initial proposal from Rocky Mountain Power they feel may have killed the consumer solar power industry in Utah.
Utah Clean Energy posted a statement on its website that captures the sentiment of many organizations that have been working to build an easy path for Utah residents to install and benefit from home-based renewable energy systems.
"It would have made solar unaffordable for most Utah households and eliminated the thousands of jobs that this industry brings to our state," read the statement. "We entered settlement negotiations in hopes of avoiding that outcome."
Utah advocates pointed to legislative changes in Nevada in 2016 that allowed that state's only power provider, NV Energy, to charge higher rates and fees for solar panel users while also reducing the rates the company was required to pay for electricity fed back into the grid by solar panel owners. The state experienced widespread public backlash following the changes, which stood until Gov. Brian Sandoval signed legislation in June rolling back most of the changes. The backpedaling, however, did not occur before several large solar companies curtailed business in the state and more than 2,500 solar-related jobs disappeared, according to High Country News.
Last fall's initial proposal from Rocky Mountain Power included a "demand charge" that could have, according to Salt Lake City sustainability director Vicki Bennett, erased the savings that solar panel owners count on for offsetting the cost of purchasing their systems.
"What Rocky Mountain Power put on the table initially was really bad," Bennett said. "It had a lot in common with the changes they made in Nevada and that nearly led to the loss of the industry."
Bennett said the current agreement, which was supported by Salt Lake City, Gov. Gary Herbert, Rocky Mountain Power and other stakeholders, provides for a credit rate of about 10 cents per kilowatt-hour for those who have already installed residential solar systems to cover their investments while allowing for a 9.2 cents/kwh rate after Nov. 15 that still makes purchasing residential solar a relatively reasonable fiscal decision. That rate stays in place for three years while the state, Rocky Mountain Power and other stakeholders work to assess the overall solar cost/benefit framework and construct a permanent solution.
HEAL Utah's senior policy associate, Michael Shea, said the way the company will be assessing the power that's fed back into the grid after Nov. 15, which looks at 15 minute increments instead of a monthly tally as previously done, will result in a decrease in compensation on top of the credit rate reduction.
"In the short-term, it's only a few cents here and there," Shea said. "But over the life of the system, it could grow to hundreds, if not thousands, of dollars."
Shea said the impacts will be felt by both solar power system manufacturers and system purchasers during the study period.
"For purchasers who miss the grandfather date, their payback period is simply going to be longer," Shea said. "And for the industry, it's not going to be an easy adjustment. I expect there are going to be job losses in the industry."
Utah-based Vivint Solar concurred with advocates that Rocky Mountain Power's original proposal "could have devastated the solar industry" in Utah and, in a statement released Monday night, said even under the compromise agreement, it wouldn't escape unharmed.
“Utahns are passionate about technological innovation, energy independence and environmental stewardship,” said David Bywater, CEO of Vivint Solar. “The settlement clears up the uncertainty of the last nine months created by (Rocky Mountain Power), but as with any compromise, we didn’t get everything we want in this deal.
"We made many concessions that were painful and will hurt our industry, but the agreement allows us to move forward. We believe transparency and certainty in the regulatory process benefit all Utahns. This compromise was necessary in Utah to enable us to support Utah’s solar pioneers as we honor previous commitments and preserve consumer choice,” Bywater said.
Utah Clean Energy's executive director, Sarah Wright, said the three-year transition, while lengthy, provided a chance to create a thoughtful and appropriate path forward that recognizes the necessity of growing the state's clean energy portfolio.
"I hope that this can be a robust assessment that re-imagines our system," Wright said. "It’s going to be a long proceeding and it will be critical for Utah to fully evaluate all the benefits rooftop solar and other distributed energy can bring to help us create a cleaner and more resilient energy future."
Signatories to the agreement expect approval from the states energy regulatory body, the Public Service Commission of Utah.