Solar industry not too keen on free market when it comes to selling energy
Retail electric companies and utilities in Texas struggle to value solar energy in a state without net metering laws that require utilities to buy excess power from the rooftop systems of residents and businesses, industry officials said.This is one of the problems caused by the inability of solar energy producers to modulate their output to meet varying demands. They are demanding that competitors buy their excess energy while still using the competitor's services when there is not enough solar output. It exposes a fundamental flaw in the home based solar model. It si also another example of how solar has sought special treatment such as tax subsidies because of the built in inefficiencies of the product.
In states like California, net metering has encouraged the widespread adoption of solar energy and helped avoid electricity shortages and price spikes during periods of peak demand on hot, summer days. Texas' lack of a statewide net metering policy, meanwhile, has hindered the spread of rooftop systems as solar companies and retail electricity providers are left to determine their own values for solar power. The often disagree.
Houston-based Sunnova often fight for a higher price for solr power than retail electric companies will give, said Meghan Nutting, the company's vice president of policy and government affairs. Nutting spoke on a panel of utility and solar company executives during an Austin solar power conference, hosted by the Solar Energy Industries Association, a national industry trade group.
Valuing solar power is not a problem exclusive to Texas' deregulated market. El Paso Electric, the public utility in far western corner of Texas, has thousands of customers in Texas and New Mexico who produce their own solar power. The company is working on a rate structure that will pay them for the power they generate, said Jim Schichtl, the company's vice president.
But the utilities have to get something out of it, too, Schichtl said. As more customers require less power from the grid, utilities have to consider the business they are losing. For example, when customers produce their own power, less electricity travels on transmission lines, meaning less revenue for utilities, which are are charged with maintaining the reliability of the system.
The problem comes if utilities don't earn enough to cover the fixed costs of maintaining and upgrading their transmission.
"Recovering a revenue requirement or cost is pretty important,"Schichtl said. "You have to recover the cost of the service you provide."