Written by Micheal Flynn
As the popularity of solar power increases in response to the increasing affordability and efficiency of solar panels, municipal energy providers across the nation are scrambling to offset lost utility funds. At Thursday’s council meeting, the St. George City Council gave the nod to a plan to charge a “capacity fee” to solar customers in St. George who also use St. George public power to supplement their solar systems, although the exact amount of the fee has not yet been determined.
Conservation coordinator for the city of St. George, René Fleming said that a growing number of residents are generating their own electricity to power their home by installing solar panels. The vast majority of these residents retain their connection to the St. George power grid to rely on as a supplemental source of electricity to deal with equipment malfunctions and periods of insufficient sunlight.
During periods of abundant sunlight, many solar users produce more electricity than they can efficiently use or store themselves, and the city purchases this power from solar users “dollar-for-dollar” at the same rate they charge residential customers. Because of this, many solar users end up with a zero-balance on their bill at the end of the month, despite the fact that they may have used a significant amount of municipal power during evenings and on cloudy days.
However, Fleming told the council, this arrangement may cause big problems for the city as more residents switch to solar, because when customers pay their electric bill, they are paying for more than simply the electricity they used that month.
“There are fixed costs associated with providing energy,” Fleming said. “And, under the current billing system, the responsibility for covering those costs are not being shared by solar customers who rely on their connection to the power grid.”
Although these customers are covering the cost of the actual electricity they use by selling back excess solar-generated electricity on sunny days, Fleming said that electricity rates are designed to cover many fixed-cost capital expenses, such as the maintenance of the power lines, transformers, and other vital infrastructure needed to bring electricity from the generators and transmission lines into to your home.
To remedy this, Fleming asked the council to allow the city to charge solar customers a “capacity fee” to reflect, not only infrastructure costs, but also the fact that the city must ensure that the power grid has the capacity to service 100-percent of the power needs for all customers, even those relying almost exclusively on solar energy. During a cloudy week, for example, if every solar user in the city ran out of stored solar power, the city needs to have the capacity to service them.
With only 63 customers utilizing solar energy in St. George, such a scenario wouldn’t constitute a major problem for the power grid currently, but the cost for home solar generation systems has decreased dramatically in recent years, and is expected to become even more affordable for homeowners in the future. In ten or fifteen years, Fleming said, solar users may constitute a sizable portion of customers. In fact, it’s a problem that municipal power providers in Florida, Arizona, and other states are already struggling with. “We are trying to be proactive,” she said.
The fee will only be charged to solar power users who are also connected to the city’s power grid. Those who are entirely “off the grid,” or do not have any external electricity hookup, will not be subject to the charge.
The council did not approve a capacity fee at Thursday’s meeting. Fleming asked the council for three to six months to analyze past usage data before deciding the amount they will charge solar customers, however Fleming indicated that it would likely be only a few dollars each month. The council is expected to make a final decision about the fee, including the exact amount, at a future meeting.
