Utilities Wage War Against Solar Power

Created: 27 March, 2015
Updated: 21 November, 2022
4 min read
Solar power has arrived. With the average price of solar cells down by 60 percent since 2010, the industry is responding to market demand. According to a study from researchers at Cambridge University, photovoltaics will soon out compete fossil fuel energy even if oil prices drop to $10 a barrel.

Needless to say, the major utility companies are not happy.

Utility companies, in their current form, are facing what is becoming a struggle for survival. Consumers and businesses are choosing solar power in growing numbers, choking off revenues for traditional electrical providers.

The threat is so great that an industry-sponsored study warns that solar energy could force a radical re-structuring of the energy industry.

Electrical providers have taken this news as a call to arms to wage war against solar power's rapid growth. All over the nation, traditional electrical utilities have lobbied lawmakers to impose surcharges on homes and business that install solar panels, and to raise prices on solar customers.

Many times they fail.

These energy utilities have opened a second front in the solar power war by shifting their attention to public utility commissions where they are more successful. Their objective is to raise the price of solar panels beyond the range of customers.

They found success in Arizona and Wisconsin.

In Arizona, the utility commission imposed a $50 a month surcharge for net metering. Net metering is when solar power users get credit for feeding electricity back into the power grid. Arizona's largest utility, the 

Salt River Project, approved the new fee over the objections of 500 people who attended the commission meeting on February 26.

Wisconsin utilities also approved a similar surcharge and New Mexico could be next. Utility industry lobbyists are all over the country attempting to make net metering illegal or more expensive. Laws have been introduced in nearly two dozen states. Most have failed.

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Scott Peterson, director of the nonprofit Checks and Balances Project, says utilities "are fighting tooth and nail."

Checks and Balances investigates lobbyists' ties to regulatory agencies. Peterson has tracked the utility industry's wars to influence public utility commissions. He says the utilities have focused on these commissions because they are usually made up of political appointees and "have enormous power and no one really watches them."

Contrary to popular belief, pro-business conservatives have not been a friend to the utility industry. According to Bryan Miller, co-chairman of Sunrun, a California solar power provider:

"Conservatives support solar. They support it more than progressives do. It's about competition in its most basic form. The idea that you should be forced to buy power from a state sponsored monopoly and not have an option is about the least conservative thing you can imagine."

Utilities argue that the cost of maintaining wires, equipment, and power plants is the same while solar panels are cutting into their revenues. While the utility companies have no objection to people using solar power, they also argue that these customers still rely on that grid on cloudy days and at night and the cost of maintaining the grid must be shared.

David K. Owens, executive vice president of the Edison Electrical Institute, the trade association that represents investor-owned utilities, says someone has to pay.

"It's not about profits; its about protecting customers," he says. "There are unreasonable cost shifts that do occur. There is a grid that everyone relies on and you have to pay for that grid and pay for that infrastructure."

Power companies are aware that solar cell technology is rapidly approaching the "two for one deal" in efficiency. The "two for one deal"  happens when light particles come into contact with electrons within a specialized material. Electrons become excited by the light. The resulting “excited state” splits the electrons into two. If this process can be controlled and incorporated into solar cells, it could double the potential amount of electrical current produced.

This process captures energy that would normally be wasted as heat and significantly enhances solar power as a source of green energy. Until now, however, scientists have not really understood what causes the process and this has limited their ability to integrate it into solar devices. But they are getting close.

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The result could be what has become known as the utility death spiral. This is when utility companies raise the price of electricity because more people are using solar power and they must maintain the grid. The price hike causes more people to go to solar power and so on and so on, until the utility can no longer survive.

This model is already taking place in Europe. Power companies in Germany and Sweden are seeing billion dollar losses and are having to shut down unprofitable fossil fuel power plants because of the rise of renewable energy and laws that favor it. If scientists can't solve the "two for one deal" problem, the utility industry, as we know it, could be finished.

Photo Credit: zstock / shutterstock.com

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