Electric utilities pushing legislature to crush rooftop solar in Kentucky

Solar panels on a Lexington residence feed excess energy into the grid.
Solar panels on a Lexington residence feed excess energy into the grid. teblen@herald-leader.com

Kentuckians want affordable clean energy. Yet House Bill 227, contrived by Kentucky legislators under the influence of electric utilities, targets rooftop solar companies and customers and will cripple this growing industry.

The bill will be heard after the House adjourns on Wednesday in a special meeting of the House Committee on Natural Resources and Energy that was called Tuesday afternoon, giving solar and free-market advocates almost no notice to turn out and challenge monopolistic utilities.

The bill seeks to destroy net metering, the program that allows rooftop solar customers to get full credit at the retail rate for excess renewable energy they produce and deliver to the electricity grid. With this bill, the credit to rooftop solar customers would be reduced by about 65 percent.

Currently, the payback period for a household installing rooftop solar is around nine years. Under this bill, payback periods for new rooftop solar installations may be more than 20 years. Under HB 227, far fewer households would choose to install rooftop solar and jobs created by our nascent, but growing, rooftop solar industry will be destroyed. This, at a time when the Trump administration has just placed a 30 percent tariff on solar panels from other countries.

Both LG&E/KU and most of Kentucky’s rural electric co-ops now have solar farms and offer customers bill credits, on a subscription basis, for the output of panels. This puts these monopoly utilities in direct competition with independent, free-market rooftop solar companies.

HB 227 takes aim at Kentucky’s growing homegrown solar industry and limits consumer choice. Why do Reps. Jim Gooch, Matt Castlen, Larry Brown and Sal Santoro, sponsors of HB 227, want to do this? Kentucky utilities have never provided any data to show the need for this legislation and offer no evidence that Kentucky’s non-solar customers are subsidizing grid access for those with panels on their roofs. Utilities have opposed plans to analyze both the costs and benefits of rooftop solar and to use those results to adjust rates for rooftop solar customers.

In many states, public utility commissions have determined that rooftop solar customers actually provide more benefits to the grid than costs. The U.S. Department of Energy has evaluated net-metering impacts across the nation and determined that, “for the vast majority of states and utilities, the effects of distributed solar on retail electricity prices will likely remain negligible for the foreseeable future.”

Beyond issues of compensation, utilities and their friendly legislators ignore the huge benefit that distributed rooftop solar offers.

Resilience for the local community grid is a major benefit. A majority of utility leaders predict that a successful cyberattack is probable within the next five years. Neighborhoods with distributed generation such as rooftop solar can isolate from the larger grid when catastrophic impacts hit the grid. These “micro-grids” can supply power for essential needs during such crises. So, some legislators are willing to sacrifice potential neighborhood resilience for “solving” a problem that does not exist.

At a summer meeting of the Interim Joint Committee on Natural Resources and Energy, chairman Gooch provided generous time to a fraudulent “grassroots organization” called Consumer Energy Alliance. It operates out of HBW Resources, a Washington, D.C.-based marketing/lobbying firm backed by major utility, oil and gas companies.

CEA was chastised by the Federal Energy Regulatory Commission and also in Wisconsin for submitting falsified public comments. Yet, Gooch found the CEA worthy of offering testimony to his committee. Kentucky independent solar companies had to request that they also be allowed to testify before the Gooch-chaired committee. They were given only about 20 minutes to make their case.

It is disturbing that these state politicians claim they want free-market competition, not mandates. Yet, due to their influence in state government, monopoly utilities, as opposed to free-market competitors, get a green light to crush that free-market competition.

Imagine, if legislators had given the same treatment to AT&T when it was a monopoly. We would not have competitors like Sprint and T-Mobile. Without the pressures of a free market to continually innovate we might never have seen a smart phone.

That’s where we are now with this battle between monopoly utilities and independent solar companies. Electric utilities in Kentucky have not had to compete for about 80 years. They are stuck in their ways and resist innovation. Rather than adapt to the evolution occurring around them, they are attempting to re-write the rules to erase their competition.

Rooftop solar is an affordable and popular choice for many households, farmers and businesses. Solar jobs are growing in every region of Kentucky. Instead of guarding the power and profits of energy monopolies, legislators should stand up for consumers and independent businesses by rejecting HB 227. 

Steve Wilkins of Berea is a member of Kentuckians for the Commonwealth.