Time for an Adult Conversation
Following SRP’s announcement last December to alter the rates paid by rooftop solar customers, its management, Board of Directors and corporate reputation were attacked and ridiculed by the solar industry. It’s become a familiar scene here in Arizona and in other states where utilities have proposed rates for solar installations that more closely reflect their share of grid-related fixed costs.
The tactics and methods employed by the solar organizations and their supporters have the look and feel of a political campaign designed to attract attention by disparaging opponents with outrageous claims and negative advertising. In the world of politics, unflattering pictures, dramatic voice-overs and eerily unsettling music might achieve an emotional rise from viewers – in a negative way. Sometimes it works. In the world of economics, however, where logic and rationality rule – not so much.
That seems to be where the rooftop solar industry is mired today.
So, they can produce clever anti-utility slogans and call utility companies job killing monopolists, liars and other slurs. They can raise an army of vocal protesters from the ranks of solar installers to leer and jeer at the utilities who seek a fair contribution of fixed grid costs from solar installations. And like Chicken Little, scream bloody murder, pointing to the end of days for solar in Arizona anytime somebody suggests solar should pay for their use of the electricity grid or become more transparent in transactions with consumers.
And they’re spending millions of dollars on a strategy that so far has achieved little-to-nothing for their industry. It’s an approach that has become stale and irritating. What’s more, these over-the-top antics and unfounded claims are met with increasing disbelief by regulators and legislators. The sky is not falling. Solar will continue to have a bright future in Arizona. We can see that in APS’ service territory last year when a record number of solar arrays were installed after an additional solar grid connection fee was authorized the year before.
Rather than continue along its insular path of condemning utilities and insisting on electricity grid handouts, the rooftop solar industry needs to adapt to the changing landscape. The industry and its member companies are no longer small, fledgling, high cost, environment-friendly start-ups in need of public assistance. SolarCity Corp., the largest rooftop solar installer in Arizona has a market cap of $4.5 billion. In APS’ service territory, 20,000 rooftop systems have been installed and SRP has approximately 15,000 rooftop solar arrays connecting to the grid in its service territory.
Subsidies and free ridership on the electricity grid are going away. And, the pace of transition is accelerating. We will see more utility companies seeking changes in net metering arrangements and installing new charges to reflect the true costs for accessing and using the grid. If they are to remain profitable, solar companies must develop new products and business models so future customers can benefit from self-generation while also paying for what they use of the electricity grid. Rather than bloviate, gesticulate and cry wolf, these companies need to respond to changing market dynamics on economic terms. Recent comments on SRP’s solar price plan by Sean Seitz of American Solar & Roofing is on target. Seitz embraces evolving technology on items like battery storage as one way for the industry to respond. He cites that the cost trend is moving in solar’s direction and actions by utilities, like SRP’s to recover fixed costs from solar installations “. . . is just another math problem to solve and there is a technology solution for it.”
Most important, the rooftop solar industry should lose the rhetoric, turn down the volume and drop the “name and shame” approach in favor of fact-based reasoning and collaboration. Maybe then decision makers will listen.