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Another state reduces Net Metering Benefits to consumers of rooftop solar

January 3, 2024

Are electric utility commissions nationwide taking cues from California by reducing compensation for rooftop solar generation? Will Idaho be the next player in this changing landscape for the industry?

In the year’s waning days, the Idaho Public Utilities Commission (PUC) secretly passed a resolution to curtail net energy metering for rooftop solar. This new rulemaking decision not only sanctioned electric rate hikes but cast a shadow of a disproportionate burden on low-income customers.

Net energy metering (NEM) is an excellent program where rooftop solar customers get credit from the electric utility for sharing their electricity with the grid. It’s a crucial factor for getting a return on investment in rooftop solar and helps promote the local sharing of clean energy.

Utility Idaho Power will transition to a net billing format, which means they will no longer pay retail rates for net-metered electricity. The average annual net billing rate is estimated to be less than $0.06 per kWh.

Over the past decade and more, the United States has embraced its residential solar industry, bringing affordable and clean energy directly to homeowners’ rooftops. Rooftop solar provides financial stability for customers and creates decent-paying jobs for tens of thousands of employees.

Following in the footsteps of California, Idaho has also decided to reduce its net energy metering (NEM) program. Unfortunately, this decision has devastated California’s once-thriving rooftop solar industry, with installations experiencing an immediate 80% drop. Disturbingly, a prominent insurer of California rooftop solar businesses has reported that 75% of these companies are now at high risk of bankruptcy, losing approximately 17,000 jobs. This serves as a cautionary tale for the rest of the nation, highlighting the challenges faced by California’s rooftop solar policy. Despite this warning, Idaho has chosen to refrain from learning from California’s experiences.

At the recent public hearings conducted by the Idaho PUC, there needed to be more public testimonies in favor of the resolution. Surprisingly, despite the unanimous opposition expressed by the public, the Utilities Commission still ruled in favor of Idaho Power’s plan.

Idaho Power defended its unpopular decision by citing an internally generated study titled “Value of Distributed Resources Study.” However, an independent analyst and other environmental groups found that the report severely underestimated the value of rooftop solar in supporting the grid. According to the analyst, the report relied on selective internal utility data, compromising its objectivity.

“The proposal willfully misleads the public on the value of rooftop solar to Idaho Power, ignores the huge environmental advantages of distributed clean energy, and is likely to kill Idaho’s solar industry and the good paying jobs it brings to our state,” said Mike Engle.

From a business standpoint, utilities have a clear incentive to undermine the value of customer-owned rooftop solar. Idaho Power, for instance, would instead maximize its electricity sales to customers in its area rather than support a market that empowers homeowners with energy independence and long-term pricing transparency.

Adding salt to the wound, the PUC approved a rate increase affecting all Idaho Power customers. This increase comes as a monthly fixed fee, a “service charge.” Starting in 2024, customers will be charged $10 per month, and this fee will rise to $15 per month in 2025, regardless of their actual power usage. Unfortunately, this decision is expected to adversely impact low-income customers who diligently monitor their energy consumption to avoid excessive bills.

Who’s next?

As other states witness the perceived “success” of California utilities in suppressing rooftop solar, more efforts will likely be made to hinder its progress. These outcomes may shed light on which utility commissions in the country genuinely prioritize the public’s interests.

In Oregon, Idaho Power strives to implement the same adjustments to solar rates that it previously applied to its customers in Idaho. However, the plan was rejected by Oregon, as indicated in the official document. Despite this setback, Idaho Power is expected to persist in its efforts to bring about the proposed changes.

Meanwhile, in West Virginia, Mon Power and Potomac Edison, the two major utilities, are seeking to reduce significantly the rates for exporting rooftop solar energy. While the state’s public utility commission has proposed a less drastic reduction, solar installers in West Virginia are cautioning that the suggested rate structure could hinder the operation of popular low-income solar programs.


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