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Editorial: Who wants to kill solar energy in Kentucky?

Source: 
The Morehead News

A legislative bill obviously designed to discourage solar energy in Kentucky came out of a House committee last week with a strong show of support.

If approved by the full house and Senate and signed by the governor, the bill would make it significantly less attractive financially to install solar energy panels in Kentucky.

Disguised under the title of a "net metering" bill, the legislation would roll back the current reimbursements paid to homeowners with solar panels on their roofs.

Under current regulations, homeowners sell surplus electricity back to utility companies at the retail rate.

House Bill 227 would change that selling price to the much lower wholesale rate, resulting in considerably less income for homeowners.

Firms that install solar panels say the smaller payments could mean that homeowners would need 20 years to recoup the cost of putting panels on their roofs - an average of $20,000 - instead of the current nine years.

One person who protested the bill at a legislative hearing said:

"This bill is essentially killing residential solar energy and allowing the utility companies to maintain a monopoly."

He described it as the same advantage given a television cable company if it had been illegal to install a satellite dish for TV reception.

In other words, the bill would take away a homeowner's right to save money by generating electricity as clean, renewable energy from the sun.

State Rep. Jim Gooch, who chairs the committee considering the bill, is the sponsor of House Bill 227.

He claims the current payment model is unfair because it forces utility companies to pay homeowners three times as much as their excess electricity is worth.

Kentucky has about 2,200 solar-powered homes at present and those owners would see no changes in selling rates for 25 years.

Future participants would start receiving the cheaper price for surplus electric in July.

The state's major investor-owned utilities companies, Kentucky Utilities and Louisville Gas & Electric, have endorsed the bill.

They and the state's rural electric cooperatives are building solar farms of their own to generate electricity.

In our opinion, this bill is unfair to homeowners and could rob the state of solar-related jobs in the future.

And it won't bring back those lost coal mining jobs.

Recent Comments

Scott Brooks's picture
Scott Brooks on July 15, 2018

Single family home rooftop solar is a fake solution. Yes, sometimes the homeowner can save money, but the money saved is paid by other electricity customers or taxpayers. For example in California the price of electricity for large homes has been made very expensive by legislating reverse quantity discounts.

 

Traditionally, electric utilities charge less per kilowatt hour if you consume more power. The reason is that there is a fixed cost associated with the infrastructure required to supply power. Small users have to pay more per kilowatt hour to pay for the connection.

 

But, in California the more electricity you consume, the more each kilowatt hour costs. For larger homes the marginal cost can be over 40 cents per kilowatt hour, enough to make rooftop solar pay. Rooftop solar is also made profitable for the homeowner by a variety of government subsidies.

 

Rooftop solar causes the homeowner to use less electricity from the utility. This reduces the utility’s revenue and that reduction in revenue is going to reduce economies of scale and cause rates to rise for other users. The utility will not be able to shed generating capacity due to widespread adoption of rooftop solar, because solar is undependable.

 

Further, in some instances, the utility is required to buy excess power generated by the rooftop solar. Sometimes the utility is required to buy back the electricity at the same price it sells electricity, at other times at a reduced price. The utility is often put in the position of paying a higher price for electricity than it can get from other sources.

 

This burden falls on the other customers of the utility. Rooftop solar is risky because the relationship with the utility company is subject to change. The majority of rooftop solar is sold on long term credit and that can create a problem when the homeowner wants to sell his home and it is necessary to pay off the loan for equipment that the new owner may not want.

 

If a user is connected to the grid then they must pay for the use of the grid, all the costs of maintnance and intermitent power usage. The utility has to make enough to cover it's operating and mainteance costs.

 

Then there are disposal and recycling costs when the solar cells and equipement wear out.

 

Robert Magyar's picture
Robert Magyar on July 17, 2018

Smaller states such as Kentucky with an embedded and historical cultural relationship and reliance on coal will, of course, be largely successful in delaying the now proven value of solar in front and behind the meter. Battery storage is the answer currently being proven through increasing deployments to the old and now threadbare excuses that solar can only be an intermittent energy source.

This recent analysis by GTM Research as well regarding energy costs in Kentucky:

"As for the state’s largest utility, Kentucky Utilities, which serves more than 500,000 customers, peak demand charges are about $19 per kilowatt for small and medium-sized commercial customers. That gives a rate of return on a 1-hour system of roughly 13 percent, and 9 percent for a 2-hour system. By 2021, GTM Research is forecasting a rate of return for small commercial customers in KU territory of 25 percent, the third-best payback of any state’s biggest utility."

While Kentucky will most likely delay for a period of time energy solutions in its resident's best long-term interests, more states, not less will move forward. Distributed Energy Resources are at a tipping point as nothing is going to stop decreasing coal and nuclear energy yields combined with expensive fracked natural gas over time and severe weather patterns. 

 

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