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Advocates say 'SunCredit' flap shows how CPS undervalued rooftop solar

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Solar panels on Hill Electric Co.'s rooftop


Last week, after meeting with Sinkin, Beneby offered to axe the SunCredit proposal, giving CPS and local installers at least a year to hash things out.

CPS isn’t the first utility to attempt to move away from net metering, said Adam Browning with the California-based advocacy group Vote Solar. In fact, “We’ve seen an onslaught of measures to weaken or completely dismantle how rooftop solar customers are compensated,” he said. While net-metering isn’t always ideal, he said, “it’s been the convenient mechanism to provide fair value for the (power) generation rooftop systems provide,” he said. “It’s still just rough justice.”

So imagine Vote Solar’s surprise when the latest attack on net-metering came from CPS, which the group named 2012’s “Utility Solar Champion” ­– “It was not at all what we expected,” Browning said.

One of the biggest open questions was how CPS came to its reimbursement rate, particularly considering the radically different approach taken by our neighbor to the north.

Austin Energy, the city’s municipally-owned utility, in 2006 began mulling over how to affix a fair price to distributed solar energy, said Karl Rabago, an energy consultant and former head of distributed energy services for Austin Energy, which he helped guide through implementing its own “Value of Solar Tariff.”

First, instead of a matter of weeks, Austin spent years considering solar’s value before switching from net metering to a tariff.

Like San Antonio, Austin has a rebate program, an incentive that helps offset the cost of rooftop solar systems – that “robust” cash-per-watt incentive in San Antonio can pay for as much as a third of the cost of such systems, CPS says.

“But we didn’t want to do rebates forever, and it became clear that our traditional support of net metering was not going to work,” Rabago said. Why? Because, according to Rabago, net metering undervalued rooftop solar, especially when you consider all these factors: avoided fuel costs, avoided capital costs of building new power plants, avoided transmission and distribution expenses, line-loss savings, environmental benefits, and the value solar presents as a fuel price hedge.

Last fall, Austin Energy became the first utility in the U.S. to offer such a tariff, with a reimbursement rate of 12.8 cents per kilowatt-hour. Instead of looking at energy prices year-by-year, which CPS proposed doing, Austin Energy “levelized” its rate over 30 years ­­– the life expectancy of a rooftop solar system – to keep the tariff stable and to shield rooftop solar customers from wild fluctuations in the market. Austin’s 30-year levelized rate is updated annually to keep it pegged to the current energy market.

So why the difference in approach? Rabago says that in Austin, instead of just simply looking for a way to pay for so-called “stranded costs,” the tariff was viewed as a way to make distributed solar a sustainable market.

“We were trying to build a solar ecosystem,” Rabago said. “We were in it for the long haul, so we viewed this as a way to get the industry off subsidies,” or front-end rebates.

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