Imperial Irrigation District slams brakes on solar

By Sammy Roth, The Desert Sun

Solar installers and homeowners who want to go solar are furious with the Imperial Irrigation District, saying the utility has made it impossible for the vast majority of homes and businesses to afford solar panels.

The district stunned customers in February by abruptly shutting down its solar net metering program, which compensated homes and businesses for the electricity they generate. Since then, hundreds of customers who applied for net metering before the cutoff announcement have been in limbo, unsure whether they'll be able to go solar — even though many of them already have panels on their roofs, ready to be switched on. District staff had hoped to allow some of those customers to sign up for net metering, but the agency's board rejected that proposal in a 4-0 vote Tuesday, with several board members expressing hostility to rooftop solar.

The months of uncertainty have already wreaked havoc for district customers in the Imperial Valley and eastern Coachella Valley, and for the region's growing solar industry. Rooftop installers have started telling homes and businesses that it doesn't make financial sense for them to go solar, and one company was forced to fire about a dozen employees. A developer building homes in Indio doesn't know what to tell 55 families that have signed contracts for solar-powered homes, under the assumption of net metering. Some homeowners who have had solar panels installed on their roofs could ask the installers to come back and take them down.

And for months, the Imperial Irrigation District has refused to give many customers permission to switch on their solar panels. It's still unclear when those homes will be given the go-ahead.

"I've already paid for the system. I've got my investment just sitting there, doing nothing," said Paul Nelson, who had Palm Desert-based Renova Solar install 28 panels on the roof of his Indio home in March. "I figured my return on my investment would be the reduction in my monthly bills. Well, guess what? I'm still getting monthly bills."

La Quinta residents Bob and Arlene Livon signed a contract in December with an Oakland-based company called Sungevity, which agreed to install 45 solar panels on their roof. The Livons didn't expect to recoup their investment for eight to 10 years, but they saw solar as "the right thing to do," Arlene Livon said — their own small contribution to the fight against human-caused climate change.

Now that the Imperial Irrigation District has ended net metering, the Livons probably won't go solar, after all. The costs just don't pencil out.

"They're basically stopping people from doing it, is what they're doing. It's not economically feasible," Bob Livon said.

Imperial Irrigation District spokesperson Marion Champion said none of the agency's energy officials were available to comment Monday or Tuesday. Asked if customers who have been waiting to switch on their solar panels will be given permission to operate soon, Champion said in an email that the district "will continue to process interconnect requests based on the order that they are received."

Under net metering, consumers pay for all the electricity they use, but are compensated by their utility for the electricity generated by their solar panels. California's major investor-owned utilities — Southern California Edison, Pacific Gas & Electric and San Diego Gas & Electric — tried last year to slash their compensation rates, but they were rebuffed by the California Public Utilities Commission, which required them to keep their current net metering programs mostly in place.

Publicly owned utilities like the Imperial Irrigation District, though, aren't as strictly regulated as the investor-owned utilities. Under state law, all they're required to do is offer some form of net metering until the amount of solar power covered by their program reaches five percent of their "peak demand" — the highest electricity demand they experience at any one time. The district calculated its peak demand as 1,004 megawatts, meaning it could stop offering net metering once it had enrolled 50.2 megawatts of solar power in the program.

The district said on February 29 that it had accepted too many net metering applications, and that its program would exceed 50.2 megawatts if all of those applicants were allowed to sign up. That left several hundred homes and businesses stuck in limbo, unsure whether they'd made it in under the cap. Most of them still aren't sure what's going to happen, since the district has told them little to nothing over the last few months.

"We’re sitting here in May, and a lot of these projects were built in January. There’s been no communication," said Bernadette Del Chiaro, executive director of the California Solar Energy Industries Association, an industry trade group. "It's been an unprecedented and almost unfathomable relationship with their customers."

Solar advocates say the district should have been required to let more than 50.2 megawatts of solar into its net metering program. State officials have required the investor-owned utilities to calculate their peak demand in a certain way, but the Imperial Irrigation District used a different formula, which had the effect of lowering its requirement. If the district had used the formula investor-owned utilities are required to use, that may have doubled its net metering requirement, Del Chiaro said. A bill currently pending in the state Legislature — Assembly Bill 2339 — would require publicly owned utilities to use the same formula as investor-owned utilities.

Even after it chose to use the more restrictive formula, solar advocates say, the district could have chosen to let more customers sign up for net metering. The state's five percent requirement is a floor, not a ceiling.

As of late April, 3,096 Imperial Irrigation District customers were enrolled in net metering, according to the agency's website. That's about one-fifth of one percent of the district's more than 150,000 customers.

"They really could take the mantle and become the leaders of all municipal utilities in renewables. That is the direction that the world is going, certainly the state," said Vincent Battaglia, founder and CEO of Renova Solar. "And yet they decide to hide behind confusion, obfuscation and just pure bad policy.”

After months of complaints about the sudden end to net metering, district staff released a proposal last week that would have raised the cap from 50.2 megawatts to 55 megawatts. That change would have allowed some of the customers who submitted applications before the February 29 announcement — but not all of them — to sign up for net metering.

But the district's board of directors rejected that proposal in a 4-0 vote on Tuesday, with one abstention. Board members expressed concern about the impact of rooftop solar on the utility's revenues, since net metering allows consumers to lower their energy bills. If they didn't shut off net metering, board members said, it could force them to raise electricity rates for non-solar homes and businesses, to make up for the lost revenue.

"I support rooftop solar...but I do not support it to the point where other ratepayers are having to subsidize it," board member Jim Hanks said.

Southern California Edison and other investor-owned utilities made a similar case to the California Public Utilities Commission last year, arguing that net metering was forcing non-solar customers to subsidize their solar-powered neighbors. Academics who have studied this "cost shift" generally say that many more people need to go solar before it becomes a serious problem. The public utilities commission acknowledged concerns about the cost shift but rejected the utilities' plans to gut net metering, saying the proposed changes would have made rooftop solar too expensive for most Californians.

The Imperial Irrigation District board, though, wasn't especially concerned by how its decision would impact customers' ability to go solar. Board member Stephen Benson said he has "a problem with the idea of solar."

"If we dropped all tax credits and everything else, it would go away. That's where I stand," he said. "I'm up for re-election in December. You can vote me in or vote me out."

Before their vote on Tuesday, district board members heard from energy consumers who would be affected by their decision. Among the public commenters were several representatives from Shea Homes, which is building Trilogy at the Polo Club, a 750-home development in Indio. The company has already closed with 55 families that expect net-metered solar panels on their homes, the representatives said.

The board also heard from Jimmy Slemboski, president of Zing Solar, an installer with offices in San Diego, New Mexico and Utah. The firm opened an Imperial Valley office in El Centro earlier this year, hiring about a dozen people who live in the area. Slemboski saw huge potential for rooftop solar in the sun-drenched Imperial Valley.

"When it was all said and done, we would have employed a minimum of 30 El Centro residents, potentially even as many as 50, depending on how well it went," he said in an interview before Tuesday's board meeting.

But when the district ended net metering earlier this year, Slemboski said, he had no choice but to put his expansion plans on hold. He fired all but one of his new employees as he waited to see what the district would do next. Before the layoffs, though, Zing Solar had already installed panels for 17 Imperial Valley customers. Slemboski said before Tuesday's meeting that he might have to remove those systems and "eat a massive loss."

Slemboski's fears came true on Tuesday, when the district board voted not to raise its net metering cap. "The outcome couldn't have been worse, I don't think," he said in a text.

Board President Norma Galindo expressed sympathy for families who expected to live in solar-powered homes at the Trilogy development in Indio, asking district staff whether there was anything the agency could do to help the developer honor those contracts. She ultimately voted not to raise the net metering cap, though, as did board members Benson, Hanks and Bruce Kuhn. Board Vice President Matthew Dessert abstained.

Del Chiaro, from the California solar trade group, predicted that ending net metering would reduce solar installations by 85 to 95 percent in Imperial Irrigation District territory, based on what's happened in other states when utilities have made solar less affordable.

"Only the extremely wealthy, for whom money is not an object and payback is not a concern, will be able to go solar," Del Chiaro said. "In this place with double-digit unemployment, and a dire need, and all this sunshine — for Imperial to be against this, and the extent to which they are, it's almost shocking to me how bad it is."