xcel-fair-shareeditors-blog-entry3Do those who have home solar pay their “fair share” to grow residential solar in their utility’s territory after they’ve gone solar themselves?

Xcel Energy, our utility on Colorado’s Front Range, doesn’t think so.

As of June 1, 2011 it’s instituting a new monthly fee for solar homeowners who collectively comprise only a tiny fraction of the utility’s well over a million Colorado customers. It’s called the “Monthly Fair Share RESA Charge”, and, for us, it’ll mean paying about $24 extra per year (RESA is an acronym for Renewable Energy Standard Adjustment).

Here’s Xcel’s rationale for the extra charge, which will cost homeowners with 500 watt to 5 kW grid-tied systems $1.03 per month, for those with 5 to 10 kW sized systems, $2.05 per month, and, for those with systems of 10 kW or more, $4.11 per month:

“Because Solar*Rewards customers typically have low electricity bills, many – perhaps you – pay a very small monthly RESA charge. For example, for customers who cover all of their consumption with generation and have no billable kWh, this charge can be as low as 13 cents per month.”

cxDeconstructing the “Fair Share” utility fee
Now, I’m all for growing home solar in Xcel territory – and around the world, actually. And I grasp the rationale for the fee. But I don’t like it – and I don’t agree with it.

Frankly, our new monthly “Fair Share RESA Charge” feels like a nickel-and-diming attempt to make sure that customers like us who pull a “fast one” on their utility by putting up a solar system that ensures they’ll never pay another nickel or dime to said utility for electricity don’t get away with their decades long “free ride”.

Imagine if instead of a few thousand residential solar rooftops representing what I’m guessing is surely less than 10% of all Xcel’s Colorado Front Range customers, tens of thousands, or even hundreds of thousands of Xcel customers went solar and managed to, like we do, produce more, or at least as much, electricity as they use!

Xcel comparatively progressive
To be fair, as utilities go in the U.S., Xcel is a progressive one, having recently earned a top 10 designation in the National Renewable Energy Laboratory’s national green utility rankings. Xcel is also reportedly going to reach its 30% mandated renewable energy level here in Colorado within the next couple of years, meaning it will have achieved this important, but also legally mandated, milestone approximately eight years before it is required to.

We’re also thankful for the $19,000 Xcel paid toward our $31,000 5.59 kW solar system.

Which brings me back to the whole “Fair Share” thing: How could you, Christof, possibly complain? You scored a rocking deal on your PV system and now you’ve got a free electricity ride for the next 20 years?!

There are a bunch of things that bother me about Xcel’s new “Monthly Fair Share RESA Charge.” Here they are –>

  • Extra fees make solar less attractive. Additional fees are a turn-off for prospective solar buyers, plain and simple;

  • Extra fees complicate things. Similarly, extra fees further complicate an already complex Xcel rebate system which sees new Solar*Rewards customers get a limited up-front rebate of $1.75 per watt from Xcel (really, this rebate is pocketed by solar installers) plus a four cent per kWh rebate of actual system production (believe me, for non-solar geeks, this stuff is complicated, especially when it comes to figuring out how quickly your solar system will reach “payback”);
  • Why pick on solar homeowners? The total percentage of Xcel customers with solar is surely small. So, why are we being singled out to generate what will amount to a drop in the bucket revenue stream?
  • excel-bill1Why not wait? Why institute a “Fair Share” fee when such a tiny percentage of Xcel homeowners have solar and thereby potential discourage other folks from going solar – why not wait until, say, 30% of Xcel homeowners have solar, and then impose the fee?
  • Where’s the accountability? While the total revenue generated isn’t likely to amount to much in terms of Xcel’s bottom line, personally, I’d like to know exactly where my “Fair Share RESA” fee is going. Show me my fee is directly funding my neighbor’s solar rooftop, and not something else, and I might feel a bit better about the fee;
  • Xcel is already so close to its 30% renewable mandate. Why is Xcel imposing this fee now, on the grounds that it will help others go solar, when it’s so close to already achieving the 30% renewable energy mandate required by Colorado law? Is it going to continue to push ahead, full steam, on renewable energy in Colorado, continue to fork over money to residential customers who want to go solar even when it isn’t required to do so by law, and even when doing so means more customers like us who will never pay another dime to Xcel for electricity?
  • Xcel’s hefty profit margin on extra kWh produced by Solar*Rewards customers. Finally – and this is a biggie – it peeves me that Xcel is imposing a “Fair Share Charge” on Solar*Rewards customers at the same time that it short-changes them for the extra annual kWh those customers produce. While Xcel charges customers 11 cents per kWh for electricity, it pays home solar owners 3 to 4 cents per kWh for any extra electricity they manage to pump out on an annual basis. In other words, the utility makes a hefty profit on every extra kWh produced by Solar*Rewards customers – unless, of course, you’re smart enough to bank your extra kWh, which we are (we’ll be fair here and tip our hat to Xcel for allowing this banking option). This situation, where Xcel Solar*Rewards customers pay far more per kWh than they get per kWh contrasts sharply with contexts in which utilities offer Time of Use rates and home solar owners actually can make, rather than lose money, by selling extra kWh back to their utility. And, of course, the hefty gap between what Xcel pays solar producers and what it charges electricity customers per kWh undermines the utility’s implicit claim that it isn’t getting enough out of its current Solar*Rewards customers.

It’s not as if Xcel’s new “Monthly Fair Share RESA Charge” is going to go away – although I do plan to fill out a formal online complaint on the Colorado Public Utilities Commission website. Twenty-four dollars a year is also not a lot of money — about the cost of two large pizzas, a half a tank of gas, or about 220 kWh of electricity from Xcel.

Our new “Fair Share RESA Charge” feels like a backdoor attempt on the part of our utility to get from its solar customers what it unsuccessfully sought a couple of years ago: A fee charging grid-tied solar customers for their use of the grid.

It’s more about the principle of the fee, whose rationale and utility I personally question, and whose effect on growing solar in Colorado is questionable. For example, will the “Fair Share Charge”, whose intent, says Xcel, is to grow solar in Colorado turn off new potential solar customers and ultimately backfire?

A backdoor attempt to charge grid use fee?
In the end, our new “Fair Share Charge” feels more like a backdoor attempt on the part of our utility to get from its solar customers what it unsuccessfully sought a couple of years ago: A fee charging grid-tied solar customers for their use of the grid.

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While I do not support this type of fee – back-door, or front-door – right now, when home solar is very clearly in its infancy, I’m happy to change my mind once we achieve what I would like to see large parts of the U.S., including Colorado, achieve: A distributed power grid in which 50, 60, 70 percent, or more, of electricity is produced locally, via solar rooftops, parking lot solar carports, and small-scale wind, hydro, geothermal, biogas, etc.

I have a feeling this is not the type of future grid most utilities in the U.S. envision. Indeed, a localized, distributed grid where nearly everyone produces a portion of their own electricity, plus, perhaps, a portion of their neighbor’s, contrasts sharply with the top-down, centralized electricity production and distribuiton model we have right now on Colorado’s Front Range, and pretty much everywhere else in the U.S.

Ultimately, it really seems to me that it is a distributive, democratic grid that Xcel is ramping up against with its “Fair Share RESA Charge.”

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