Rebooting the Solar Industry

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Subsidies helped solar achieve its best year ever in 2015. With the extension of the solar investment tax credit, Congress will help utility-scale and rooftop solar grow even faster in 2016, even if investing in solar doesn’t always work out (Solyndra). Had the credit not been extended, forecaster IHS says, the impact on the solar industry would have been “huge,” causing a 10% global decline in the solar industry. The tax credit means solar is hot right now, but its presence across residential rooftops is being challenged by OldCos.

Net metering, which lets customers sell the unused electricity they generate back to utility companies at full retail rate, has made installing solar on roofs economical. It’s helped NewCos like Sunrun, Sungevity, Mosaic, and SolarCity. Utilities aren’t fans, though. The rapid growth of rooftop solar has created a debate over the value of energy sent to utilities and use of utilities’ infrastructure. Utilities have implemented monthly charges and reduced net metering rates. The Washington Post points to this presentation, which suggests utilities are campaigning against net metering for fear of “declining retail sales,” “loss of customers,” and “potential obsolescence.” Utilities are contesting policies like net metering in 39 states.

Berkshire Hathaway Energy convinced the Nevada Public Utility Commission to hike costs for commercial and residential rooftop solar. The ruling has driven SolarCity and other solar companies to abandon the state. Clean energy has won a few rounds recently. The country’s largest solar market (450,000 rooftop solar arrays), California, decided to maintain net metering last Thursday.

Renewable energies don’t piggyback on the infrastructure that carbon companies own. Existing infrastructure and continued subsidies for fossil fuel companies give incumbents an advantage in a time when there are plenty of reasons to incentivize technological solutions to climate change. If net metering is unfair, as incumbents claim, so is the playing field upstarts are forced to play on.

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