Solar Fees are Burning Southern New England
January 28, 2018
The solar industry and its customers are getting hit with higher costs. President Trump’s recent decision to impose tariffs on imported solar panels has led to accusations of favoritism toward the fossil fuel industry, by undermining the flourishing solar trade, which employs 260,000 workers nationwide.
The solar advocacy, lobbying and research group Solar Energy Industries Association (SEIA) estimates that the 30 percent tax on imported solar panels will wipe out 23,000 U.S. solar jobs and delay or cancel billions of dollars worth of solar projects and other renewable energy investments.
Abigail Ross Hopper, SEIA’s president, said the tariff will prop up the few U.S. solar-panel manufactures, some of which are owned by foreign companies, and “will create a crisis in a part of our economy that has been thriving, which will ultimately cost tens of thousands of hard-working, blue-collar Americans their jobs.”
SEIA estimates there are up to 38,000 solar manufacturing jobs that make racking systems, inverters, and tracking systems. Only 2,000 jobs manufacture solar panels.
Hopper said the tariffs could have been worse and expects the solar industry to endure.
“The case for solar energy is just too strong to be held down for long, but the severe near-term impacts of these tariffs are unfortunate and avoidable,” she said.
Solar marketer EnergySage estimates that the tariff will add $500 to $1,000 per residential solar installation. Overall, the price-comparison service expects only a short-term dip from the tariff.
In Rhode Island, Doug Sabetti, owner of Newport Solar, said his residential solar business will see a slight drop.
“Solar proves over and over that it could be the least expensive form of energy in a free market, but the opposition keeps finding ways to increase the cost,” Sabetti said. “This is just another speed bump.”
Sabetti expects larger commercial developers to take a bigger hit.
Providence-based Deepwater Wind said the tariffs will not effect its proposed 26.4-megawatt Tobacco Valley solar facility in Simsbury, Conn., where some 110,000 10-foot-long panels will be installed. The company didn’t say how the tariff will influence its others solar projects.
Trump signed the executive order Jan. 21 imposing the tariff on all imported solar equipment, and washing machines. He did so as part of his “America First” agenda and at the behest of the U.S. International Trade Commission which claims the tax will save U.S. jobs.
The move has been met with mild condemnation by environmentalists, who say the tariffs could have been much higher and that the decision had the blessing of some segments of the business community.
Sen. Ed Markey, D-Mass., has claimed the tariff will cost his state about 2,000 new solar jobs this year.
“President Trump’s solar tariff is clouding prospects for the Massachusetts solar industry’s bright future, raising costs and attacking the growth of blue-collar jobs,” said Markey, chair of the Senate Climate Task Force. “The Trump Tariff will hurt workers, hurt homeowners who want to save on their electricity bills, and hurt a future with cleaner air, cleaner water, and fewer impacts from climate change. We need to keep the sun shining on solar energy.”
Massachusetts solar tax
A first-in-the nation fee for solar customers is getting much less attention than the Trump Tariff, but may have a greater impact on the industry. Electric utilities have for years sought to charge solar customers a fee for connecting to the electric grid, siting the cost of maintaining the wires and utility poles. Solar advocates say the charge will discourage ratepayers from installing solar systems.
On Jan. 5 the Massachusetts Department of Public Utilities (DPU) approved a monthly fee requested by the utility Eversource Energy. The monthly minimum reliability contribution charge will apply to the utility’s new solar net-metering customers beginning Dec. 31.
The advocacy group Vote Solar has estimated that the fee will impose costs of $4,440 to $9,400 over the life of a solar system. Eversource told the Boston Globe the charge is about $119 a year, cutting annual electricity savings to 84 percent from 93 percent for going solar.
Vote Solar and the environmental advocacy group Earthjustice plan to appeal the decision in state Supreme Court in early February.
“We are committed to reversing this decision and ensuring that the commonwealth can continue building its clean energy economy, creating jobs, and fighting climate change,” said Nathan Phelps, program manager for Vote Solar.
The DPU ruling also eliminated the “time-of-use” rates that encouraged customers to use electricity when demand is lower by offering lower rates. It replaced that initiative with a “demand charge” accessed for the highest 15 minutes of usage each month. Such a system is aided by so-called “smart meters,” which Eversource has yet to deploy. The DPU ordered Eversource to develop an outreach and education plan for their customers by June 1.
“Mandating a demand charge for residential customers at this scale is unprecedented,” said Janet Gail Besser, executive vice president of the Northeast Clean Energy Council. “These changes are particularly concerning because Eversource lacks the smart metering needed to inform customers about their peak demand and energy usage. This order is a huge step backwards for a state that was one of the early national leaders in grid modernization and solar policy.”
Massachusetts Secretary of Energy and Environment Matthew Beaton supports the solar charge. Spokespeople for Gov. Charlie Baker said the governor also supports the new fees.
Join the DiscussionView Comments
Your support keeps our reporters on the environmental beat.
Reader support is at the core of our nonprofit news model. Together, we can keep the environment in the headlines.
I can’t understand the basis by which solar customers who want to use the grid say they don’t want to help pay for it. That means either the grid will not be properly maintained (as has been happening with highways thanks to motorists resisting paying gas or excise taxes) , or customers without solar, many of whom cannot afford solar installations or live in apartments that are not suitable, will pay more. That doesn’t seem right.
All users pay to support the grid. it is baked into every electric bill. Electric utility customers’ bills are split into generation fee and delivery fee. The delivery fee supports grid maintenance and other infrastructure. A residential solar operator uses generated watts to offset their generation fee. If they generate more than they use then the run a credit. That is "net metering" and utilities have had a hard time knocking down the metering rate or eliminating the credit system. This "reliability" fee is a profit grab-back by the utility. They have masked it as a reliability issue but they are required by the public utility laws to maintain the transmission system and have already established their costs as part of the public utility regulation process. The utility companies have essentially confected a case where solar customers are creating an unmet cost, then had their legal team throw a bunch of lawsuits at the "problem", and this relability fee is the one that stuck. $10/month for absolutely no new services provided in return. pretty sweet deal for Eversource.