Texas utility policies are discouraging rooftop solar, report finds

(Photo by Joe DelNero /NREL)

Texas electric utility policies for residential solar have made investments in the technology less financially viable, according to a new report released by the Texas Office of Public Citizen.

The report, Eclipsing Progress: The State of Solar Rates and Fees at Monopoly Electric Utilities in Texas, examined 141 noncompetitive Texas electric utilities and their policies for customer-sited solar – solar systems installed where the electric utility customer lives – and compared the bill savings to the cost of purchasing and installing a home solar system.

In most cases, the report found, ratepayers who take out loans to purchase and install a home solar system would take longer than 15 years to make their money back. Furthermore, even those who pay in cash on day one and bypass financing could wait up to 10 years to recover their costs.

“Texas has lots of available sunshine, but electric utilities make it difficult for customers to capture this clean energy resource,” said the report’s lead author, Kamil Cook, Public Citizen climate and clean energy associate. “Uri laid bare the fragility of the state’s grid, and home solar is part of the solution. However, in many cases, unfair rates and other utility policies are standing in the way. Regardless of where they live, Texans need certainty that one of the most significant investments in their home will pay off.”

“Rooftop solar is quickly becoming unaffordable to customers at many non-competitive utilities in Texas,” added climate policy and outreach specialist for Public Citizen Kaiba White in a statement to Renewable Energy World. “More Texas utilities are enacting these anti-solar policies right as our grid needs this electricity the most. The ERCOT grid breaks new demand records yearly and has significant transmission constraints. Maximizing rooftop solar is one of the fastest ways to keep up with growing demand. Texas lawmakers should intervene if they’re serious about electric reliability or affordability.”

“We hope this report will spur some utilities to re-evaluate how they do things. This research has lessons for Texas utilities and almost certainly for utilities beyond Texas, whose policies put their customers in a similar bind,” the report’s co-author White continued.

In addition to the costs of the panels themselves, ratepayers with customer-sited solar are subject to fees and other policies, varying by utility, the report concluded. While these ratepayers can also be compensated for supplying excess solar energy to the grid, the mixture of fees and low compensation has made the investment unfeasible for “most” ratepayers.

Most of the utilities analyzed for the report don’t offer net metering, or compensation for excess solar sent to the grid at the same rate the customer purchases it. The average compensation rate utilities pay customers for excess solar-generated energy is only 43% of what the same utility charges for the energy it sells to all its customers, including those with customer-sited solar.

The report also found that the average monthly payments on 10 and 15-year loans to purchase a solar system are higher than the average monthly energy savings at most of the analyzed utilities.

The Texas Office of Public Citizen recommends adopting a standardized statewide policy that determines a “fair rate” of compensation for solar energy returned to the grid, as well as conducting a study led by the Public Utility Commission of Texas to guide the state’s utilities on fair compensation rates.