Distributed Solar Sparks ‘War of Business Models’

Colorado is the most recent battleground of a war between utilities like Excel Energy and companies like SolarCity, which provides leasing programs for about 4,000 customers in the state.

Mark Jaffe reports that “Xcel Energy is seeking to restructure the incentives and credits for rooftop solar,” especially by reducing incentives for energy produced by rooftop solar to fractions of a penny for each kilowatt-hour. Excel also wants to reduce the net-metering credit that installations receive for putting excess energy onto the grid. Net-metering, in place in 43 states in the United States, is the central sticking point in similar fights around the country.

Excel believes that the cost of solar power production has dropped to the point that distributed solar businesses no longer require subsidies. Also, Excel argues that solar installations place unfair burden on the utility’s other customers.

Excel Energy has already contributed to the installation of 17,800 solar energy systems since 2006 under its Solar Rewards Program. In all, residents and businesses have received $267 million in incentives under the program. Companies like SolarCity, however, claim that the proposed changes are meant to kill their business: "What Xcel is proposing cripples the solar industry,” says Meghan Nutting, director of policy and electricity markets at SolarCity.