How solar energy works: The simplified version
A controversial bill that could make it less lucrative to install solar energy panels on Kentucky homes will go to the full House after it was approved 10-to-4 Thursday by the House Natural Resources and Energy Committee.
Senate Bill 100, sponsored by state Sen. Brandon Smith, R-Hazard, could be heard by the full House as early as Friday. It was filed Monday and rushed through Senate committee and Senate floor votes in a matter of hours on Wednesday.
“We suspect that Senate and House leadership just don’t want to have the controversy that would go with a bill that restricts the rights of their constituents,” said Matt Partymiller, president of the Kentucky Solar Industries Association. “This is a pro-utility bill. It doesn’t have a lot of popular support. If it doesn’t move fast, if it sees the light of day, it will have significant opposition.”
The bill is backed by the state’s major electric utilities, including LG&E and Kentucky Utilities. It would require the Kentucky Public Service Commission to determine how much solar customers would be compensated by utilities for selling their excess power back to the grid.
Under the present net-metering law, utilities must pay the same rate for excess power as they charge residential customers. The solar association and its allies credit that law with making solar panels financially attractive. More than 1,000 Kentucky homes have solar panels, up about 200 just in the last year, Partymiller said.
By making solar customers enter complex negotiations with the PSC and utilities across the state, the Senate bill could make the ultimate value of small-scale solar power less certain, and therefore less attractive for homeowners debating whether to make the average $20,000 investment in rooftop panels, the bill’s opponents said.
In the end, opponents said, homeowners might get as little as 3 cents per kilowatt hour for their excess power in the morning and be forced to pay utilities 10 cents per kilowatt hour in the evening to buy power off the grid.
Similar net-metering bills moved through the legislature in the last two sessions but stalled against stiff opposition.
“This bill ends net-metering as we know it,” Tom FitzGerald, director of the Kentucky Resources Council, told House committee members Thursday.
“I don’t for the life of me understand why the utilities have engaged in this multi-year effort to stifle rooftop solar other than — assuming that they have higher costs from their own solar arrays — they want to push the independent solar producers out of the market so they can corner the market on the sun,” FitzGerald said.
Testifying for the bill, David Samford, a lawyer for Kentucky’s electric utilities, said the net-metering law as written in 2004 and revised in 2008 amounts to a subsidy for renewable energy users at the expense of other utility companies. The current net-metering law does not take into account the fact that utilities must pay to maintain the electric grid, Samford said.
“What we have is this statute that creates an economic shift, it creates a subsidy among classes of ratepayers,” Samford said. “The General Assembly as a matter of law has established the price that the utilities must pay.”
Several members of the House committee said they expect House floor amendments to be filed with additional language, including a requirement that the PSC — when deciding rates — consider the “measurable benefits” of residential solar power, such as a reduction in the need to build new power plants and the creation of clean, renewable energy.
Four Democrats on the committee voted against the bill, citing the harm they feared it would do to Kentucky’s nascent solar power industry: Charles Booker and Josie Raymond of Louisville, Angie Hatton of Whitesburg and Cherlynn Stevenson of Lexington.
“We are in the middle of a very real, urgent and irreversible climate crisis, and I see this bill moving us in the wrong direction,” Raymond said.