The opening salvo in the battle over the future of rooftop solar in Colorado is slated to take place Thursday at a Colorado Public Utilities Commission workshop.
Xcel Energy, the state’s largest electricity utility, with 1.2 million customers, has challenged a key financial incentive — net metering — for installing a residential rooftop solar array.
The PUC will hear from an Xcel executive and from representatives of the solar industry and the Colorado Rural Electric Association. The meeting, at PUC headquarters at 1560 Broadway, begins at 10 a.m.
The workshop is the first of three fact-gathering sessions the commission will hold before it decides how to proceed, said PUC spokesman Terry Bote.
Net metering provides a credit for every kilowatt-hour an array puts on the grid at the same price residential customers are charged for electricity — about 10.5 cents.
As other incentives are cut back in Xcel’s Solar Rewards program, the net metering credit has become key to the financing of the units.
“There is nothing wrong with net metering, and it should remain the policy,” said Susan Glick, a spokeswoman for Alliance for Solar Choice, which represents the nation’s biggest solar installers.
Xcel calculates that the added power and avoided costs, such as needing less fuel, amounts to only 4.6 cents.
The remaining 6 cents is picked up by Xcel’s other customers, the utility said.
“We believe that net metering is a hidden incentive that unfairly requires non-solar customers to pay the grid costs of solar customers,” Alice Jackson, a vice president of Xcel’s Colorado subsidiary, said in an e-mail.
As of June, 19,400 customers have had a total of 112 megawatts of solar panels installed under Xcel’s Solar Reward program.
Solar industry executives and advocates say Xcel underestimates the value of rooftop solar, or “distributed generation,” and sees it as a threat to its business.
“It’s competition,” said Glick. “For the first time, the utility has competition, and Xcel is resisting competition. They want the status quo.”
The alliance commissioned its own cost-benefit study for Colorado, which determined that rooftop solar provided $13.6 million a year in benefits over costs.
Both sides agree that a cut in the net metering credit would reduce solar installations.
Xcel has proposed two alternative approaches to figuring net metering credits.
One — adding up the avoided costs — would cut the credit in half. The second — giving the homeowner a credit equal to the lowest cost solar, which are big utility-scale units — would cut the credit by 45 percent.
Xcel estimates that if the retail-rate credit is unchanged, there would be 1,800 megawatts of rooftop solar by 2045. Under the low-cost solar rate, units would be cut by two-thirds.
The proposed changes, Xcel’s Jackson said, offer “a smart and fair solar policy.”
In a filing, the Colorado Energy Office urged the PUC to balance the competing interests: “Colorado’s economy benefits when there is a thriving, competitive market for solar installations,” the office said. “And these installations rely on net metering to ensure access.”
Mark Jaffe: 303-954-1912, mjaffe@denverpost.com or twitter.com/bymarkjaffe
