SHOCKER: Fewer People Are Buying Solar Panels After Subsidies Were Pulled

Jason Hopkins | Energy Investigator

Fewer people are purchasing expensive solar panels after one major electricity provider scaled back the subsidies it gives to panel owners.

Under a new system that went into effect in November 2017, customers in Utah who own a solar panel will be credited slightly less than the market rate for any excess power their installation generates and sends back to the grid. The new arrangement came after a year-long debate between Rocky Mountain Power, the state’s largest electric utility, and solar power advocates.

The debate over solar subsidies in Utah is nearly identical to the debates other states are having across the country. Under a process known as net metering, homeowners are credited for the excess power their solar panels produce and send back to the grid. As an incentive for people to purchase costly solar panels, owners are typically credited more than their power is actually worth — giving owners hope that they will ultimately save money in the long run by way of cheaper energy bills. However, this process has become controversial as it essentially shifts costs to non-solar panel customers by way of higher electricity bills for all ratepayers. (RELATED: Every State In New England Is Reconsidering Their Subsidies To Solar Power)

Rocky Mountain Power argued that the state’s net metering rules were unfair to its non-solar customers, and worked to cut back the system. However, Utah Clean Energy and other solar advocates, not wanting to see their business decline because of a subsidy reduction, fought back against any dramatic changes.

The two sides eventually reached a compromise in late 2017, with solar lobbyists agreeing to a small reduction in credits to panel owners.

Under Utah’s new net metering policy, homeowners who purchased solar installation after November 2017 are being credited marginally less for their power. This will be a temporary system until Rocky Mountain Power develops a more permanent solution. Anyone who bought panels beforehand is grandfathered into the old net metering system until 2035.

Despite only a nominal drop in credits, Utah homeowners already appear to be dramatically less interested in buying solar panels.

In their most recent net metering report, Rocky Mountain Power cited 9,372 customers who installed new solar panels in 2017-2018, right before new policy went into effect. This is a noticeable drop considering Rocky Mountain counted 12,408 new rooftop panels just the year prior, according to the Standard-Examiner.

Utah follows other states that have recently opted to scale back their net metering rules.

Connecticut, Maine, New Hampshire, Vermont and other state governments have either rolled back net metering or prevented more subsidies from going into effect. Many solar advocates are fighting back against the changes. Solar lobbyists in Maine lost a court ruling Aug. 16 to get its subsidies back.

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