A battle is brewing between residential solar installers and utilities that could cool this red-hot market — and leave unprepared contractors in the lurch.
Two new reports reveal the battle’s terrain. The first shows the average waiting time for utilities to grant solar activation permission rose 68% between 2013 and 2014, according to EQ Research. The second shows first quarter residential solar installs in 2015 grew 76% over the same period in 2014, according to a joint report from the Solar Energy Industries Association and Green Tech Media.
Currently, about 600,000 solar systems are installed nationwide producing 1,200 megawatts of power, and that number is expected to reach 3.3 million by 2020, according to SEIA. Hilary Clinton wants to see 500 million solar panels producing 140 gigawatts by 2020.
“The market is growing tremendously,” says Sean Gallagher, vice president of state affairs for SEIA.
But for some utilities, that growth represents a serious threat to the prevailing business model, said John Schehl, executive director of the Roof Integrated Solar Energy (RISE) program for the National Roofing Contractors Association. These utilities are lobbying states — which govern rates and regulations — to pass laws that can make solar installs more difficult for installers and less attractive to consumers. “Distributed solar is something they can’t control,” Schehl said. “The utilities are a very strong lobby, and they do want to control the distribution and sale of power.”
Schehl said not all utilities are anti solar. States with high numbers of installs generally have favorable solar legislation. “We hear great stories about working with utilities, and we hear horror stories,” he said. Horror story examples include a large utility in Arizona that recently approved charges that could add about $50 to typical monthly bills for new solar customers. Or fees approved in Wisconsin to add $182 a year for the average solar customer, according to the New York Times.
Gallagher said other tactics include delaying interconnection with the grid, and challenging net metering. Net metering allows electricity meters to flow two ways for solar users both from the utility and to it. Customers only pay for the net amount of electricity they use. But caps were put on net metering. And in places such as California where solar is red hot, as utilities close in on those caps they’re looking for additional fees in exchange for raising them, Gallagher said.
What can solar installers do against utility’s deep pockets and army of lobbyists? Schehl said it’s imperative for installers to get to know their local utility representatives as well as their expectations and concerns. “If they’re supportive, they can be your best friend in the world,” he said. “If they’re not supportive, you’ll at least understand what the obstacles are, which will help you manage your production schedule better.”
Gallagher adds that installers need to educate themselves about solar installation regulations — and make sure they carefully follow those. He encourages installers to use resources such as their local SEIA and NRCA’s RISE program. “The utility business is very detail oriented,” he said. “If the utility wants to slow you down and you haven’t complied to the letter of the rules, that will be a way for it to do so.”
Schehl added that roofers are often on the frontlines, because 70% of all solar installs are on rooftops. For roofers and installers, that creates both an opportunity and a challenge. “That’s a lot of people working on roofs, and that’s a lot of interaction with the utility.” Schehl said. “Learning to navigate those murky waters with your local utility is the best advice for a solar installer.”