Findings Support New Rate for Future Rooftop Solar Customers in Utah
Net Metering Study
In November 2015, the Utah Public Service Commission asked Rocky Mountain Power to study the costs and benefits of net metering in Utah, and based on that, to propose updated net metering rates.
After analyzing a wide range of energy consumption and customer use data over the last year, our study made two important findings:
- While rooftop solar customers take less energy from the power grid than other customers, the cost of serving solar customers is nearly the same because they still need to use the power grid and rely on Rocky Mountain Power’s customer service.
- Overall, net metering customers pay about $400 less per year than the actual cost of providing service for items such as energy grid maintenance, customer service and more.
Particularly in the last four years, private rooftop solar in Utah has increased exponentially as more and more people install private systems on their homes.
Utah Rocky Mountain Power Customers with Rooftop Solar
- 1,500 in 2012
- 3,600 in 2014
- 16,000 in 2016
- 22,000 as of July 2017
This is an important fact to consider because it increases the service costs that are shifted to non-solar customers. The shifted cost—which functions as a subsidy for private solar customers—was relatively small when there were few net metering customers. Now, as solar has increased, so has the shifted cost (subsidy).
Our study found that, with no changes to the net metering program, the costs are:
- $6.5 million/year – Current cost of subsidy
- $78 million/year – Potential cost based on projected growth of rooftop solar
- $667 million – Potential total cost of subsidy over 20 years
Proposed Net Metering Rate Update
Based on findings from the study, we’re proposing an updated rate for rooftop solar customers. Rocky Mountain Power supports applying the rate only to new rooftop solar customers, but it will ultimately be up to the Utah Public Service Commission to decide what net metering rates should be and when any new rates take effect.
The issue of cost shifting to non-rooftop solar customers is an important one, and many other organizations are trying to create fair policies to address it. Several municipal utilities in Utah have enacted or proposed similar changes to accommodate the growth of rooftop solar, including St. George, Logan and Bountiful and Provo, as have energy providers and regulators in other states.
The purpose of the rate update is to create a fair balance between customers who have private solar yet still rely on the power grid, and those who don’t have private systems.
Want more detailed information about the filing and rate update?
Current net metering customers pay about $60 less on their energy bills, compared to customers without rooftop solar panels. By comparison, under the new proposed rate—which must be approved by the Utah Public Service Commission—a typical residential net metering customer would still pay about $40 less on their energy bills, which is 35 percent less than customers without rooftop panels.
Average Energy Bill Cost Comparison
- Residential customer without solar panels – $114/month
- Current net metering customer – $55/month
- Future net metering customer – $74/month
What Happens Next
We recognize that many customers made investments in rooftop solar systems based on current rates and respect the need for reasonable certainty for recovery of those investments. That’s why our filing with the commission recommends applying the new proposed rate to future customers only.
The rate proposal will be subjected to the full public processes run by the Utah Public Service Commission, where the viewpoints of the rooftop solar industry and others will be sought and heard.