We would like to thank the Santa Fe Sustainable Everything Advocates and New Mexico Solar Energy Association for sponsoring the 2016 Renewable Energy Day event in Santa Fe last Friday. It was a huge effort and success. So thank you, thank you!
And thank you to everyone who came and helped make it the success it was. Old friends and new faces coming together to show the policy makers in Santa Fe that renewable energy is a priority of their constituents. That their voters firmly believe solar, wind and the rest of the renewable energy sources this state is so rich in, should be utilized to improve the lives of all New Mexicans.
The 2016 Renewable Energy Day is coming up on January 29th and REIA-NM is looking forward to seeing you there. This year it’s being held at the New Mexico Capitol building in Santa Fe.
This event will be open to the public from 10 a.m. to 3 p.m.
SFSEA (Santa Fe Sustainable Everything Advocates) and NMSEA (New Mexico Solar Energy Association) are co-sponsoring the event this year and they’ve chosen “The Future of Sustainability in NM: Global Carbon Reduction Starts at Home” as its theme. We will be speaking with members of the legislature about the extension of the NM solar tax credit, which is due to expire at the end of 2016, House Bill 26, sponsored by Representative Sarah Maestas Barnes and Senate Bill 13, sponsored by Senator Mimi Stewart. Both bills can be found here: http://www.nmlegis.gov/lcs/billfinder/bill_finder.aspx.
The goal for the day is to raise awareness about renewable energy and sustainability in our beautiful state. Can’t wait to see you there!
In the latest news from Nevada, both the Alliance for Solar Choice and the state run Bureau of Consumer Protection have filed to delay or even alter the the net metering ruling handed down on Dec. 22, 2015 by Nevada’s Utility Regulation Commissions, PUC. If you are not familiar with the case, please feel free to catch up here– Click REIA-NM’s earlier articles on this story.
“The matter is larger than just one subset of residential customers getting a benefit that other do not,” said the filing from the Bureau of Consumer Protection. “This is a matter of integrity and honor that will severely damage the reputation of Nevada’s government and its ability to persuade customers to engage in programs in the future, if the perception is created that the commission will not honor or recognize deals prior commissions or legislatures once offered to encourage people to participate in programs that in many cases cost them thousands of dollars out of their own pockets.”
With the hearing coming up tomorrow, the decision appears almost predetermined, if one is to believe PUC staff filings-
“Staff does not believe there is a reasonable likelihood that TASC will prevail on the merits of the matter asserted in its motion … “
Writes PUC Staff Counsel Tammy Cordova. She continued,
“In fact, staff believes that failure to timely implement the commission’s order could cause greater customer confusion,” the filing says. “Timely implementation of the NEM rate structure, when customers are expecting a change in their NV Energy bills, will provide the greatest opportunity for those customers to review and seek understanding of how the new rate structure will affect them.”
We will be keeping you up to date on the latest developments in this case, throughout the week. Either check this site daily or like and follow us on Facebook- Click here and stay informed.
This is part 4 of REIA-NM’s ongoing NM Rate Case series.
There is a situation where solar and electric utilities can be friends. A different revenue model, called decoupling, allows utilities to profit from the number of customers served instead of the amount of power they sell. This removes solar and energy efficiency as a threat to revenue. It also allows utilities to increase profit by increasing reliability, efficiency, and service. A decoupling regulation allows the utility to recoup fixed costs and ideally, earn extra rewards for achieving environmental targets desired by their customers. California, where decoupling began in 1981, uses 55% less energy that the national average, even though the population grew. A growing population means more customers to serve for the utilities. California leads the nation in solar installations as well, and the state installed just over half of all the solar in the country. If the renewable energy industry works with the utilities to find a grid 2.0 solution, the solar industry would thrive, continue to provide good jobs, and our utility will happily create more clean energy in New Mexico.
Nevada Regulator (PUC) eliminates “retail rate” net metering for new and existing customers. This is probably the most anti-solar regulation that we’ve seen so far. In New Mexico, current solar customers enjoy net metering, which means the solar generates electricity and then turns the meter backwards in an equal 1 to 1 rate exchange. A system sized offset to annual usage means the annual electricity used is around zero. Taking away net metering means that solar customers pay more for their electricity than the amount they get paid to generate it from their solar investment. In Nevada, the proposed change from 11.6 cents per kWh to 5.5 cents per kWh is a big hit. To make matters worse, the PUC approved additional fixed charges, a number the regulators left up to the utility to determine. According to Greentech Media, “Solar companies say the changes will lower net metering compensation to the point where rooftop solar no longer makes economic sense.” Indeed, this is a disaster for customers who entered into 30 year lease agreements. These customers will pay the solar company an agreed rate (which is less than their current monthly bill, but increases around 3% per year for 30 years) AND pay the utility company a solar access fee plus the difference between the retail rate and the new “wholesale” rate. In fact, the two leading national solar lease providers, Solar City and Vivint Solar, announced that they will leave the state if this measure passes, taking approximately 6,000 jobs with them.
This seems, to us, to be a short term “solution” for a utility beleaguered by the influx of solar energy and decreased demand, as we covered here
. With the advancement of battery storage technology, those with means will disconnect from the grid, leaving fewer connected rate payers (and higher rates). It is what is known as the utility death spiral
, a dangerous recursive loop which results in bankrupt utilities due to lower demand and stranded assets, like unused coal mines. As we’ve seen in other sectors, regulations and monopolies rarely succeed in holding back disruptive technologies like renewable energy. It’s time for vested interests in old technologies and business models to find a new way to work toward a clean economy and build local economies alongside the renewable energy industry. For more on this, check back tomorrow for our “Solutions” finale to the NM Rate Case Series.
This is part 3 of REIA-NM’s ongoing NM Rate Case series.
Currently, it seems a solution for the utility will be a fixed cost “fee.” However, customers will have less incentive to use less energy, or invest in alternative energy. Fixed fees only ensures the utilities can recoup their expenses and profit. It will not recoup the “costs” of rooftop solar or energy efficiency to the utility, it will just eliminate a projected long term problem that more and more solar customers present for utilities. In what’s referred to as load defection, solar customers use less energy and pay lower power bills–so the financial forecasts for utilities looks grim. In Arizona, for example, where utilities had an access fee imposed on solar customers and approved by their regulatory body, solar installations decreased by 96%. It devastated the industry, companies went out of business, workers lost their jobs, and the largest national solar company left the state. Maintaining the status quo utility business model is bad for solar, utilities, and rate payers.
The Renewable Energy Industry contributes more jobs to the economy than any other sector. Solar enjoys economies of scale and prices continue to fall. Technological advancements in battery technology will soon make financial sense in our sunny state with 5.5 hours of sunlight per day. Paired with solar energy, these systems can be disconnected from the power grid. If the utilities punish solar customers instead of working with the solar community, something known as as “grid defection” could occur. This worst case scenario means customers generate their own power and can cancel their electric utility service. This will be bad for rate payers, because it will create instability in the grid, make electricity more expensive for grid-tied customers, and ultimately put electric utility companies out of business.
This is part 2 of REIA-NM’s ongoing NM Rate Case series. Click here for part 1.
Last year’s NM rate case, submitted by the utilities in New Mexico, asked to impose an “access fee” for solar customers. REIA-NM and a number of other organizations, successfully argued against such a traditional solution to the problems arising in and stemming from their traditional business model which has failed to adapt to new technologies The utilities claimed that solar customers should pay their fair share for the electricity they use at night, when the sun isn’t shining. However, this “fee” doesn’t recoup any real expense to the utility.
In New Mexico, solar energy generated by customers makes up less than 1% of total generation. In addition, many studies show that the benefits that solar customers add to the grid outweigh the additional costs any night time generation may cost. It is an attempt to slow down the adoption of solar, a short term, but very painful solution for the industry. REIA knows that solar customers make the capital investment to add solar power to the grid and not the ratepayer. They share their electricity with the grid during sunlight hours and reduce the need for expensive “peaker” plants that mostly rely on diesel fuel. In fact, the peak hours have changed due to solar. Solar is good for grid security, rate payers, and the environment in the long run. Legislative policies and approved regulations that allow utilities an alternate mechanism to earn revenue can solve the current access fee issue.
The current rate case conflict between the solar industry and the electric utilities, centers around utility regulation and the traditional business model of utility investing in fuel generation and transmission. The utility then asks the regulating body (the PRC in New Mexico) to approve a rate case which consists of the costs plus a 10% profit.
Since the electric utility companies’ revenue is tied to retail sales (customer rates), anything that reduces that return, like increased efficiency or solar electric power, becomes a bottom line problem. When the legislature mandated the utilities add renewable energy to their portfolio, the utilities complied. It has set up a conflict. The PRC wants to keep rates low for consumers, the legislators want more renewable energy, and the utilities need to recover large investments in infrastructure and fuel costs.
Currently, rate increases are the only way to recover costs. If fuel costs keep going up, and the utilities keep building more plants, then everything runs according to plan. But today, new technologies like solar and LED lights threaten this old model. When customers invest in energy efficiency and solar energy, it results in cost savings for the customer, but reduces revenue for the utilities. As a result, utilities see a bleak financial future and try to come up with fixes that will pass the PRC. Unfortunately, these fixes can be bad for the industry, but the days when it could be drowned in the bathtub have passed. In the end, we think solar and energy efficiency is hear to stay, so the electric utility has to find other ways to make up for their lost revenue by changing their business model.
*This is part 1 of a series on energy utilities, new technologies and the resulting problems caused by this conflict. We will be running this series through out the next few weeks. and suggesting possible solutions to this conflict. We welcome your input and ideas on the subject. Please comment below. Thank you
Congress strikes deal to extend wind and solar tax credits, that were set to expire at the end of 2016 and lift the oil export ban. The ITC extension continues the 30% federal tax credits through 2019.
*Please note this is dependent on veto or pass of the entire federal spending bill. Unless Congress wants another government shutdown, in an election year, this looks like it will pass.
Solar facilities that begin construction before 2020 could qualify for the full 30% ITC under the tentative deal, according to Gregory Jenner, the co-chair of the Stoel Rives energy team, but the credits would phase out after that.
“If construction begins in 2020, the facility qualifies for a 26% credit,” he wrote. “If construction begins in 2021, the facility qualifies for a 22% credit.”
Facilities with construction starting after 2021 — or if construction begins before 2022 but the facility is not placed in service before 2024 — would qualify for a 10% credit. Residential solar systems would receive the same credits, but they would apply when the system is placed in service, rather than when construction began, according to Jenner, a former Treasury Department tax official.
This will make a big difference in many states in residential rack re-sale(s) and commercial racking too.
Continued from An Overview of the Photovoltaic Industry part 3 Click here
Another major complicating factor to the solar electric industry is that capital market(s) are always in search of financial bubbles to exploit; where the goal of investment is to privatize the profits and social the costs. Throwing large amounts of investment money at this “new technology” has led to the commoditization of solar technology, this has produced many systems installed by larger, “big box store type” national solar franchises whose business model of providing solar equipment “leases” has been questioned by many, as they typically are more expensive than a system purchased outright. These leases almost make the re-selling of a home with a solar lease very difficult.
Almost without exception, all the market forces are moving in the direction of product innovation and using less raw materials – and lower costs. This process continues at an un-abated pace, as this is a new developing industry that is certainly not mature. Unlike developed industries, the photovoltaic industry has virtually no entrenched powerful controlling interests – to retard the rate of change or control its direction or rate of adoption. Utilities are under the direction of public regulation authorities and because of laws like PURPA, Utilities cannot stop widespread PV adoption – now that these systems are widely affordable and 43 states have adopted net metering, though Hawaii has reached a limit previously set.
Today, the most rapidly growing segment of this photovoltaic electricity production is the utility mega-watt scale solar farms, using N-S horizontal trackers and large fixed angle ground mounts – (this utility market has recently seen the most growth in sheer numbers of PV watts installed).
What will this industry look like 3 or 5 years from now?
Coupling these systems with reserve batteries banks on the large or residential level has offered promises of future advancements, but currently the battery bank option is not providing economic quantifiable advantages. Many years may pass before the price of battery banks drop far enough, to be more than an expensive added feature and provide a real economic advantage to and end user.