Bill seeks to better compensate rooftop solar owners for their grid contributions

Alixel Cabrera 

Utah News Dispatch

Utahns planning on installing rooftop solar systems may become better compensated after this legislative session, as Senate legislation proposes an increase in bill credits for customer-generated energy calculations.

SB189, titled “Net Metering Energy Amendments,” would seek to approve credits that are at least 84 percent of a regular customer cost for residential and small commercial customers served by large-scale electric utilities. The Senate Transportation, Public Utilities, Energy and Technology Committee voted 4-2 to recommend the bill for full Senate consideration. Some lawmakers said they hoped to see a change in the bill’s rate and would base their next vote on those updates.

This is in response to the expiration of the state tax credit for solar panels, said Senate President Pro Tempore Wayne Harper, R-Taylorsville, who is sponsoring the bill.

“The purpose of this bill is to go through and create a predictable, reliable rate for people who have installed solar panels on their homes in the future,” Harper told Utah News Dispatch before the hearing. “It does not affect anybody who’s installed them in the last 20 years, or however long that has been.”

Rocky Mountain Power, the only utility that meets the bill’s criteria, currently credits Utah solar owners between 4.7 and 5.2 cents per kilowatt-hour they send to the grid, Harper said, while it charges customers about 11 cents per kilowatt-hour.

Though the credit is not as much as what regular customers are paying, it’s more than the current credit rate, Harper said. The intent is to make the system more equitable.

“One of the things that we need to remember is that rooftop solar is clean energy,” he said, “and it lessens the requirement for Rocky Mountain Power to go through and produce power, elsewise; natural gas, coal, wind — whatever it may be.”

Harper said he has discussed the bill with the utility company and “they are not on board yet.” He’s looking for a solution that works for everyone to be able to move it forward, since the Legislature has addressed this issue for years.

In 2023, the Utah Supreme Court decided to allow Rocky Mountain Power to review its credit rate annually. Over the years, that has descended from 100 percent of the regular electricity rate to about 50 percent, Harper said.

“Utah’s solar policy is an outlier. We are one of the only states where solar compensation changes every year, and the solar export rate is among the lowest in the country,” said Kate Bowman, the region’s regulatory director for the advocacy group Vote Solar, in a news release. She added that the percentage calculation could create long-term stabilities for those who are considering installing solar systems.

Others, including business owners, developers and clean energy advocates, also spoke enthusiastically about the bill’s potential, with some saying the change is “overdue” and a fairer deal.

Rooftop solar would help with Utah’s energy independence concern, Sara Wright, CEO of Utah Clean Energy, said in the committee hearing.

“I really believe that Sen. Harper’s bill is a balance between the previous full net metering that many states still have,” she said, “and the current credit that changes every single year, which makes it almost impossible.”

Nathaniel Johnson, executive director at the Utah Rural Electric Cooperative Association, expressed concerns, though his co-op’s rates are determined by its board and the bill as it is currently written would not allow them to continue setting their own rates as a governing authority. He also said there are times of day when public utility companies don’t need the power generated from homes.

“Even if we did need it,” he said, “we can go on the open market where our wholesale prices of power are significantly less than what has been proposed in the legislation.”

Michele Beck, director of the Utah Office of Consumer Services, also spoke against the bill, stating that the current compensation is the product of a multi-year intensive process upheld by the Utah Supreme Court. She added that the legislation would make it harder to keep electric rates low.

“I think we need to be clear that this is a subsidy not seeking a fair rate,” she said.

This story originally appeared on Utah News Dispatch and is republished under Creative Commons license CC BY-NC-ND 4.0.