A bill advanced Thursday that would snuff Kentucky’s rooftop solar industry. But several lawmakers who voted to move House Bill 227 from committee said they would oppose it in the House unless it is substantially changed.
Their warnings are smart. What the utilities are doing — behind a wall of smokescreens — is bamboozling Kentucky into letting them corner the solar market.
Part of a national strategy by investor-owned utilities, HB 227 is not about protecting low-income consumers or coal jobs or anything other than utility profits. The utilities want everyone to have to pay them to tap into energy from the sun.
If the bill’s backers had a case, they’d lay out the numbers; instead they’re inflaming rural-urban tensions. They’re also pushing two big misconceptions:
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▪ People who can’t afford to install solar are subsidizing those who can. Not true here or for “the vast majority of states and utilities,” says the U.S. Department of Energy, which sees a “negligible” effect on retail power prices from distributed solar for the foreseeable future. Those who say solar is getting a free ride point out that when the sun is powering a home or business, that customer pays nothing to cover the utility’s fixed costs, such as maintaining the grid. They omit that utilities make money off solar customers by avoiding costs and profiting from selling their power. On hot, sunny days when demand for electricity and solar output are highest, the solar power pumped into the system is cheaper than what the utility could buy or generate. Solar customers redeem their credits at night when generation cost is low. Under our net metering law, utilities provide a credit of 9 cents to 11 cents a kilowatt-hour for solar. HB 227 cuts that to about 3 cents, prolonging the payback time for installing solar. Kentucky Utilities charges customers who opt into its time-of-use rates 27 cents a kilowatt hour during peak demand, making it hard to believe that solar is worth only 3 cents. Utilities can already end net metering when it accounts for 1 percent of customers. Excluding TVA and municipal utilities, Kentucky has 1.8 million electric consumers; fewer than 1,000 use net metering, far below the 18,000 cutoff the utilities once accepted. The threat from net metering is laughable, also quantifiable. If it’s raising costs, utilities should show us the numbers.
▪ This bill protects coal jobs. Natural gas, not solar, is the competitive threat to coal. None other than Charles Snavely, the former coal executive who heads Kentucky’s Energy and Environment Cabinet, recently argued that the federal government should junk the Clean Power Plan because “market forces” have already “steeply” reduced CO2 emissions. Utilities will continue to switch to natural gas because it’s cheaper and cleaner. The Department of Revenue has concluded that most coal in Eastern Kentucky has no chance of being mined within five years, if ever.
Meanwhile, Kentucky’s investor-owned utilities are investing in solar. KU touts its solar installation in Mercer County as “Kentucky’s largest universal solar facility.” Duke Energy is building solar generation in Northern Kentucky to sell in Ohio.
Snuffing out small-scale solar won’t save coal jobs, but it will deprive Kentuckians of the chance to work in a fast-growing industry. That big utilities want to corner the market tells us that solar’s promise is huge.