Blocking the sun

It’s not just action on climate change that poses a threat to the profitability and business model of the fossil fuel industries. Renewable energy also challenges their predominant position as suppliers of electricity.  They may have accepted that they have to coexist with large hydroelectric power plants, but that doesn’t mean that they are going to go along with solar energy and wind power.

The focus of the well-funded think-tanks and front organisations set up by the oil companies and the petrochemical industries has been on blocking initiatives to promote residential roof-mounted photovoltaic systems, and on providing incentives to encourage people to switch to electric vehicles. The attack on residential solar has been most forceful in the US—where at least 20 fossil-fuel backed groups and electric utilities are behind some of the country’s most aggressive campaigns to slow the growth of solar energy in at least 12 states, including attempts to reduce net metering benefits and to create demand charges for customers with solar power.

Roof stop solar?

A national network of utility interest groups and fossil-fuel think tanks has provided the funding, model legislation and political cover to discourage the growth of rooftop solar power and to attack key solar policies.[1]   The cast of characters is a familiar one:

  • The Edison Electric Institute, the trade group that represents US investor-owned electric utilities, launched a wave of attacks on solar energy in 2012. Since then the EEI has worked with the American Legislative Exchange Council to create model legislation to repeal state renewable electricity standards, attack net metering, and fund other anti-solar initiatives.
  • The American Legislative Exchange Council, ALEC, provides utility and fossil-fuel interests with direct access to state lawmakers–drafting model anti-solar legislation that then be replicated by state legislatures. ALEC’s anti-net metering policy document has inspired copycat legislation in states like Washington and Utah, and its model “Electricity Freedom Act” legislation has been used to repeal renewable energy standards in at least 19 states.  ExxonMobil has been an important funder of ALEC since its inception.[2]
  • The Koch brothers have provided funding to the national fight against solar by funnelling tens of millions of dollars through a network of shadowy non-profits.  The Koch-funded campaign organisation Americans for Prosperity has also carried out anti-solar organising efforts.
  • The Consumer Energy Alliance (CEA), is a Houston based front group for the utility and fossil-fuel industry, representing companies like Florida Power and Light, ExxonMobil, Chevron and Shell Oil. CEA has provided support to utilities fight anti-solar battles in Florida, Indiana, Maine and Utah.
  • The Indiana Energy Association successfully lobbied on behalf of the state’s largest electric utilities to end net-metering, replacing it instead with a new solar policy that limits consumer compensation for generating rooftop solar energy.[3]
Many large electricity utilities oppose roof top solar and have fought to block the technology

American electric utilities have used the support provided by these well-funded anti-solar interests as well as their own resources to fiercely attack solar energy policies in their states.

Two major Arizona utilities: Arizona Public Service and Salt River Project, have successfully pushed for anti-rooftop solar policies. APS has also been accused of improperly cultivating influence with the state commissions that regulates utilities and funnelling dark money into recent commissioner elections.[4]

In Utah, Rocky Mountain Power has tried to eliminate net metering and charge additional fees to its 20,000 customers that generate rooftop solar power. Public outcry from ratepayers and the solar industry forced RMP to back down and provide net metering compensation.

In Texas, El Paso Electric renewed is past attempt to create a separate and more expensive rate class for solar customers. In 2015, the utility spent $3.1 million on filing and negotiating fees—an amount charged to ratepayers before dropping the proposal, only to try again in 2017.

In 2015, Nevada Energy successfully lobbied the state utilities commission to eliminate net metering, a move that effectively halted the growth of rooftop solar in its service territory for two years. After widespread public protest, state legislators effectively reinstated net metering in 2017.

These are only a few of the many anti-solar initiatives that were on-going in American states in 2017.[5] 

Tricks of the trade

Electric utilities have employed a range of financial tools and tricks to try and render rooftop solar power a less attractive option. These include:

Demand charges.  These charges are based not on the amount of electricity a household actually uses, but on peak electricity demand for a short period of time (typically 15 to 60 minutes) over the course of a month. As a result, the savings resulting from using less electricity from the grid are offset by short periods of heavy electricity use, for example at night or on a cloudy day.

Time of use rates. Utilities have shifted the most expensive time-of-use rates to later in the evening when they know solar energy production is dropping off. Utilities can thus minimise net metering payments to solar customers and charge them more for night-time electricity use.

Solar use fees.  These are extra monthly charges levied on customers with rooftop solar systems. Utilities justify the charges by arguing that they are necessary to ensure grid reliability, subsidize net metering programs, and maintain infrastructure.

Solar rate class.  This is a mechanism that blatantly discriminates against rooftop by charging solar customers more per kilowatt-hour than regular customers.

Sunshine state?

The most flagrant attempt to mislead and hoodwink the electorate and undermine rooftop solar occurred in Florida in 2016.  In November 2016, Florida voters narrowly defeated Amendment 1—a utility-backed measure to limit rooftop solar expansion that was marketed as a pro-solar measure by a utility-backed organisation called Consumers for Smart Solar.  Florida’s investor-owned utilities had poured more that $20 million into this political committee. Its aim was quite simply to deceive voters into believing that the amendment would promote rooftop solar.  In reality it would do the opposite. 

The sunshine state–but are you allowed to use it?

Amendment 1 attempted to use the popularity of solar energy to embed new language into the Florida constitution that could have been used as a legal mechanism to raise fees on solar users and to keep out companies that could compete with the utilities to provide solar energy.  Amendment 1 was called “one of the most egregious and  underhanded attempts at voter manipulation in the state’s history.”[6]

But Florida utilities strongly influence the state’s legislature. The Miami Herald observed that the companies were likely to turn to the Florida Legislature or the Public Service Commission to push through proposals that would weaken the state’s net metering laws and end tax rebates to solar customers. The utilities reportedly gave at least $9 million to legislative campaigns and Governor Rick Scott to influence this outcome.  In recent years, the Republican-led legislature and the governor-appointed utility board sided with utility companies by approving requests to expand the fleet of natural gas generating power plants, weaken incentives for customers to save energy, and reduce incentives to install rooftop solar.[7]  This is regulatory capture working well in Florida.


[1] See: Blocking the sun: Utilities and fossil-fuel interests that are undermining American solar power. Accessed at:  //frontiergroup.org/reports/fg/blocking-sun-1
[2] See Smoke, Mirrors and Hot Air. Appendix B. Op.cit.
[3] See the Blocking the sun pamphlet. At: //frontiergroup.org/sites/default/files/resources/Factsheet%20-%20Blocking%20the%20Sun%202017.pdf
[4] Blocking the sun. Op.cit.
[5] Ibid
[6] Florida voters say no to misleading solar amendment, Miami Herald. 8 Nvember 2016.
[7] Miami Herald. Op.cit.