Solar incentives not yet dead in east valley

Indio resident Paul Nelson has been unable to use his newly installed solar panels, seen on May 9, 2016, due to decisions made by the Imperial Irrigation District.

Indio resident Paul Nelson has been unable to use his newly installed solar panels, seen on May 9, 2016, due to decisions made by the Imperial Irrigation District.

By Sammy Roth, The Desert Sun

Imperial Irrigation District officials hope to bring back a popular solar incentive program — but under terms that could make rooftop solar too expensive for most of the agency's Coachella and Imperial valley customers.

The district abruptly shut down its net metering program in February, saying it would no longer compensate solar-powered homes and businesses for the electricity they send onto the grid. The announcement infuriated solar companies and left hundreds of families scrambling to figure out whether they could still afford to go solar, even though many of them had already signed contracts with installers.

Irrigation district staffers have now proposed a compromise: They want to reopen net metering indefinitely, but under new financial terms. Homes and businesses that go solar under their tentative proposal — including the hundreds stuck in limbo — would receive something like 4 cents per kilowatt-hour for their solar generation, rather than the 12 cents homeowners receive now, district Energy Manager Vicken Kasarjian said.

That plan is still subject to approval from the Imperial Irrigation District's board of directors, which could decide it's not interested. Last month, the board rejected a staff proposal that would have reopened the original net metering program to some of the customers stuck in limbo. At the time, board member Stephen Benson said he has "a problem with the idea of solar."

In a meeting with The Desert Sun's editorial board on Wednesday, district General Manager Kevin Kelley referred to Benson's statement as an "unfortunate remark." Kelley said he hopes the district's board will approve the new proposal.

"We knew that in California, in the hottest part of the state, we couldn't simply turn our back on rooftop solar," Kelley said. "We're actually anxious to get this back in front of the board, and to be a leader."

But the new proposal is already raising alarm bells for the solar industry. Bernadette Del Chiaro, executive director of the California Solar Energy Industries Association, said cutting the compensation rate for homeowners from 12 cents to 4 cents would essentially make solar three times more expensive.

"That would significantly slow down, if not pretty much kill the rooftop solar market. You can't take the economic profile of solar and reduce it by a third, and expect the market to just rebound overnight," she said.

The rooftop solar industry fought successfully to prevent Southern California Edison, Pacific Gas & Electric and San Diego Gas & Electric from making similar changes to their net metering programs. Edison had proposed to lower its compensation rate from around 15 cents per kilowatt-hour to 8 cents — a change that was ultimately rejectedby the California Public Utilities Commission.

The Imperial Irrigation District doesn't need approval from the utilities commission, because its a publicly owned rather than an investor-owned utility. And district officials are wary of net metering. They believe the program forces non-solar customers to subsidize their solar-powered neighbors, and they don't think that's fair — hence their proposal to slash the compensation rate.

Kelley said the district lost $9 million in revenue due to rooftop solar in 2015. If the agency just continued the old net metering program, he said, it could lose so much revenue it would be forced to raise electricity rates for everyone, so it could afford to keep the grid running. Right now, the district's residential electricity rates — 11.69 cents per kilowatt-hour — are significantly lower than Southern California Edison's residential rates.

"Solar is a burden. It has benefits, but it's a burden for the system," Kasarjian, the district's energy manager, said Wednesday.

Clean energy advocates, though, say rooftop solar benefits everyone in ways that utilities aren't taking into account. Those benefits include limiting the need for expensive new power plants and reducing strain on the grid, which can help utilities avoid costly maintenance. Solar panels can also displace fossil fuels, the main cause of climate change and a serious contributor to local air pollution.

Just last week, the left-leaning Brookings Institution released a paper suggesting that rooftop solar is more likely to be a net benefit than a net cost to all energy consumers. Meanwhile, the Natural Resources Defense Council and SolarCity — a major environmental group and a national solar installer, respectively — released a study finding that rooftop solar is saving all Nevadans between $7 million and $14 million per year.

"That's the piece that they're missing. They're missing that rooftop solar provides value to the utility and all ratepayers," said Del Chiaro, from the California solar trade group.

District officials still need to work out the details of their new solar proposal. On Tuesday, they'll ask the board of directors for permission to develop a new net metering program, which they hope to finalize by July.

“You think we can control the board? They may say no to the whole thing," Kasarjian said.

Since the district announced it was shutting down net metering on February 29, it's experienced a surge in applications from homes and businesses hoping to turn on their solar panels: nearly 1,200 in all. If the board agrees to develop a new net metering program, those customers would be able to enroll in that program — if they still want to go solar under the less favorable economic terms.

Meanwhile, hundreds of customers who got in line before February 29 are still waiting for permission to turn on their systems. District officials say it simply takes time to process interconnection applications, and that they'll continue to process applications in the order they're received. Kasarjian said the district planned to approve 250 applications on Wednesday, which would leave 235 customers in the queue.

Nate Otto, founder of Hot Purple Energy in Palm Springs, said he has about 15 completed installations "sitting there in limbo" in Imperial Irrigation District territory, unable to connect to the grid and unsure how much money the'll save if they do. He's not sure what those homes will do if the district doesn't reopen some form of net metering. If worst comes to worst, he said, he might buy the systems back from those customers.

"Some of them haven't paid, and I haven't drilled them either," he said. "I'm not going to leave them out there and say, 'That's too bad.'"

Imperial Irrigation District customers who are already enrolled in net metering haven't been affected by any of the changes, and are still being compensated for the electricity they generate.