Iowa House Bill 669 and recent TV ads would have you believe that solar energy producers “don’t pay their fair share of costs for the grid.” This claim is based on a lack of understanding and is misleading. Passage might lead to an increase of future rates.
Solar users “pay for” their connection, in part, by trading power. They provide solar-produced electricity for the utility to sell to others when the sun shines (reducing utility costs for peak power). Yes, solar users also consume electricity (metered separately from that provided), but when the sun is not shining, electric demand, grid loading, and utility electric costs are low. The utility charges solar producers the same (high) rates as everyone else when this trading runs out, but pays only about 1/3 of the utility’s peak power cost for overage.
Additional fees on private solar customers would be akin to “double dipping” and unfair. Payback for installing a private solar system already takes the better part of a decade; additional fees will hamper growth of this emerging industry.
While residential solar production can help reduce costs by providing electric power during times of peak power, and reduce transmission costs by proximity to users, utility’s solar production is often via (expensive) energy farms on (expensive) land hooked to very long (expensive) wires. The real issue for regulators is to reduce rates for ALL customers. HR669 proponents haven’t shown how that will happen, and this bill just might backfire.