Here’s What Happens When Utilities Rule The Roost

By Frank Andorka, Senior Correspondent

What Happened: This is going to shock a lot of you, but utilities would like the solar industry to stop harping on net metering and move to what they call “rate design.”

  • K Kaufmann, communications manager for the Smart Electric Power Association (the utilities’ arm of the solar discussion) (SEPA), lays out the case for why moving the conversation away from net metering will help utilities.
  • Oddly, however, it doesn’t explain why there would be any advantage to the solar industry to move off net metering.
utillities

Is the image of the sun setting on a utility pole too heavy handed? I worry it’s a little heavy handed.

SolarWakeup’s View:  Sometimes, the jokes write themselves.

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So over at the Smart Electric Power Association (SEPA) blog, K Kaufmann lays out the case for why the solar industry should abandon its fight over net metering because…I guess…it hurts the utilities’ feelings or something?

The basic argument in the piece, apart from the head-nod to the vague concept of “rate desgin,” is that fighting for net metering sets up a false conflict between the solar industry and utilities. After all, Kaufmann writes, utilities are adding solar at ever-rapidly increasing rates – why isn’t the solar industry telling those stories, huh?

In a vacuum, of course, Kaufmann is right. Utilities are adding solar at an ever-increasing rate. But what her analysis misses is the reason they are adding solar: They’re afraid of losing their monopoly on electricity generation and, therefore, their livelihoods. At least, that’s what most utility executives would tell you if you pumped them full of sodium pentathol and asked.

In one of the most revealing passages in her piece, Kaufmann writes:

From colonial times to present day, the U.S. energy system has been built on successive transitions. The historical record clearly documents that such transitions are, by their very nature, messy, uncomfortable and confusing for all involved.

Who can argue with that? But here’s my question in response: Why should we cling to a distribution and transmission system befitting a 19th century vision of the grid and the means to power it?

As distributed generation grows – by which, to be clear, I mean non-utility-owned solar for purposes of this conversation – utility monopolies are becoming increasingly irrelevant. And while I’d never deny that transitions can be scary, I’d agree with Kaufmann that:

On the upside, they also create a lot of room for experimentation, innovation and cross industry collaboration.

But asking solar to renounce its most potent growth mechanism and put its faith in the benevolence of utilities is an absurd premise unless you are only looking at things from the utilities’ perspective instead of looking at the question from all sides.

This is the kind of reasoning that occurs when the utilities are in control – and that is not in solar’s best long-term interests.

More:

The stories we aren’t telling: Focus on net metering misses the bigger picture (SEPA)

SEIA Efforts To Court Utilities Misguided

By Frank Andorka, Senior Correspondent

What Happened:  Since January 1, the Solar Energy Industries Association (SEIA) has made moves that indicate it is considering wooing utilities to become part of its membership – a move that may be well-intentioned but are far more likely to be self-defeating.

  • SEIA President and CEO Abigail Ross Hopper told SolarWakeup last year that she was willing to talk to anyone (which apparently really does mean anyone) to expand the solar industry.
  • In the past few months, SEIA floated the idea of bringing on utilities as members of the association to some board members.
  • SEIA approached SEPA to acquire their ownership stake in the SPI production company, SETS, but instead renewed the joint venture .

SEIA

SolarWakeup’s View:  Sometimes, the enemies of your enemies are still your enemies, too.

While I have no doubt the intentions of Abigail Ross Hopper and the rest of the SEIA team are honorable, the idea of bringing utilities in as part of the national solar association makes me uneasy – and apparently I’m not the only one.

Since the beginning of the year, the subject of allowing utilities to become members of the association has come up. In one instance, the executive team met with resistance from the board when utility membership was discussed. Dan Whitten, the association’s vice president of communication, disputes that characterization of what happened at the meeting, though sources requesting to remain anonymous to discuss the plan freely outlined it as reported above.

“A range of options with regard to utilities was discussed at our most recent board meeting,” Whitten told SolarWakeup. “There was some pushback, and there was also interest in pursuing this further. The conversation is not over.”Likewise, recent negotiations surrounding the co-sponsorship of Solar Power International with the Smart Electric Power Alliance also came under discussion. Sources tell SolarWakeup that SEIA tried to buy out SEPA’s interest in the show but were rebuffed. An of the partnership was signed instead. SEPA, unlike SEIA, has investor-owned utilities on their board and takes in millions of profits from SPI and other shows produced by SETS (Solar Energy Trade Shows).

Whitten again disputes that characterization as well. “It was among a full range of options that we have batted around including renewal, the one we landed on,” he said.

An extension under the previous agreement should concern any SEIA member, however. After all, most of the revenues from the show come from SEIA members and members’ customers, but SEPA’s annual budget is more than 50% funded by the SETS joint venture. The bottom line? SEIA’s members – that’s you – fund an organization with close ties to the utilities that are trying to mess with your business. In other words, SEPA needs you more than the other way around, but it’s SEIA’s members that get hurt in the process.

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“There is no question that we are looking at all opportunities to better represent the full solar industry from local installers, to providers of advanced technologies, to large-scale solar providers and sponsors,” Whitten said. “We want a big tent, but we want to do it in a way that will keep the solar industry together. A solar industry divided is an industry with limited to no political power. [We want solar to become] one that can represent the entire $20 billion and growing industry can wield serious influence in Washington and in states.”

Look, I get it. For years – nay, decades – the national association has struggled to find ways to raise the necessary money to battle against a well-funded utility industry, a battle it knows it needs to fight. And I understand the temptation to go where the money is. After all, there is no question the utilities are well funded and have money to burn – just look at EEI and NEI. Look at all the cash they’re spending trying to dismantle net metering – maybe the most effective pro-solar-penetration legislative policy in history – and the money they get from charging exhorbitant fees for interconnection access.

But that’s just it, isn’t it? Can we ever trust the utilities to support the solar industry fully, given the threat it poses to most utilities’ monopoly power on electricity generation? Wouldn’t we essentially just be giving cover to a group that, if they don’t want to destroy the solar industry entirely, at the very least want to slow it down long enough for utilities to figure out how to keep the power of solar for themselves? What would that mean to SEIA’s position on ratepayer-funded solar within utilities’ monopoly markets?

But I’m a big believer in playing out the potential unintended consequences of any move before deciding on a final course of action. And the potentially devastating consequences of alliance between solar’s national association and groups hellbent on hobbling solar’s growth are bridge too far for me.

They should be for you, too.

More:

The Solar Energy Industries Association

What Is The Threat To The Utilities From The Solar Industry?

Zombie Lie Returns; Time To Kill It Again

APS Is Trying To Kill Steyer-Backed RPS Initiative

South Carolina Solar Soul Under Attack

Hey, California Utility: John Grisham Would Like His Latest Plot Back

Bonus:

It just seemed appropriate.

Tony Clifford from Standard Solar: Being acquired by Gaz Metro and working on SEIA

Tony Clifford has been with Standard Solar for over a decade, spending much of his time as the CEO until stepping aside late in 2016. This wasn’t his first time in solar, having worked for Solarex and BP Solar in the Carter/Reagan years. What are the parallels between the Carter/Reagan transition to those between Obama/Trump when it comes to solar?

Standard Solar was recently acquired by Gaz Metro, a diversified energy company based in Montreal, which also owns Green Mountain Power. Tony and I discuss how the process played out and how Standard Solar was able to stand out amongst the many solar companies that went to market last year.

Our discussion also goes into Tony’s work in policy. Since stepping down as CEO, he has been devoting much of his time on policy and business development. As an longtime elected member of the SEIA board, Tony was part of the search committee for the CEO job at SEIA that went to Abby Hopper.

The next steps for Standard Solar look bright. With access to capital, including tax equity, Standard will be looking to acquire development projects throughout the Country.

If you enjoyed this episode as much as I did, make sure to subscribe on your favorite podcast platform including iTunes, SoundCloud and Stitcher radio. Please subscribe and share with your friends how much EnergyWakeup is helping you!

This is your SolarWakeup for November 5th, 2013

The big story of the day is the securitized private placement by SolarCity.  The $54.4million placement probably represents one of the early batches of projects at SCTY.  Lots of variables here but unknown at this point is the credit rating, and if it was higher than the Mid American or NextEra bonds for their solar farms.  Creating a viable exit plan for solar portfolios will definitely help. Uniform credit profiles and documentation will be key for future developers!

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Have a great day!

Yann