Some states are reducing payments to solar customers

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Advocates warn this policy runs counter to federal mandates

Besides federal and state tax credits, another advantage of residential solar installations is the ability to sell unused electricity back to the utility company. But a solar industry group warns that some states are changing the agreement.

According to E&E News, several states are rolling back or reducing those payments, a move seemingly at odds with the federal government’s goal of significantly increasing solar energy generation by 2035.

In Arizona, utility regulators recently voted to reopen their “value of solar” docket. The Arizona Corporation Commission says the rate paid to solar users who sell electricity back to the grid needs to be reduced, calling the present rate structure “unsustainable.”

Commissioner Nick Myers complained that the present structure increases the monthly cost for traditional customers.

Not so fast

Many solar advocates reject that premise, saying the benefits of renewable energy are undercounted. They are expressing concern, even though the rate adjustment would not affect current solar customers, only future ones.

“Any time that rate changes, it creates uncertainty and makes it difficult to pay off the cost of that system,” said Autumn Johnson, executive director of the Arizona Solar Energy Industries Association.

According to E&E News, more than a dozen states have ended their net metering policies in the past decade. More troubling, the recent pullbacks are occurring in some of the largest solar states — and political battlegrounds — just another headache for an industry that is facing pressure from supply chain constraints and inflation.

In March, North Carolina cut its rates and replaced them with tariffs that match the electricity price a customer pays. Other states — including Colorado, Idaho and Wisconsin — are weighing their own changes.

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