Let ‘Er Buck, Wyoming Moves to Bring Fairness to Roof-Top Solar Compensation

Op-ed:  Wyoming Rural Electric Association Executive Director, Shawn Taylor, provides an update on the Wyoming legislature’s efforts to update and modernize net metering policies in the Cowboy state.

The Wyoming Legislature is working hard to pass consumer-friendly legislation that will prevent families across the state from paying more to keep their lights on. Wyoming legislators are in the midst of updating laws regulating what rate roof-top solar owners receive for selling excess electricity into the grid, otherwise known as net metering.  And that’s a good thing.  Why?  Because the current set of laws governing net metering rates were written almost two decades ago when renewable energy technologies were still in their infancy and needed favorable rates to survive.

Shawn Taylor — Executive Director, Wyoming Rural Electric Association.

As solar costs decline and roof-top installations rapidly grow, previous decisions to incentivize solar adoption through consumer-funded net metering policies must be reviewed.

And that’s precisely what Senate File 16 would do.  If enacted, the legislation would repeal the current compensation paid to roof-top solar owners for their excess generation in favor of a new one to be determined by the Wyoming Public Service Commission by April 1, 2022, in favor of a fairer system for all residents.

Net metering tends to benefit wealthier families at the expense of lower and middle-income ones. At an average installation cost of around $10,000 or more in a state whose median household income is $64,000, roof-top solar installation is out of reach for most families. While wealthier homes with solar panels pay lower power bills, those costs for grid maintenance and upgrades, transmission, distribution, and more are shifted to everyone else. Though those cost shifts may seem small today, they can balloon over time as roof-top solar adoption expands.

This view has been echoed by the electric utility serving Sacramento, the capital of arguably the most renewable friendly state, California.  In a report released last September, The Sacramento Municipal Utility District found that non-solar customers subsidize roof-top customers at a rate of $25 million to $41 million annually.  In a nutshell, the report found that “while net-metered [roof-top] solar provides a benefit…it causes electric rates to increase for other customers.”

To address these unfair and regressive policies, 42 states plus DC took 146 actions related to roof-top solar policy and rate design during the last three months of 2020. Of the 146 actions, most were related to net metering rules.

Whether in Wyoming, Arizona, or even California, policymakers must consider the cost-shift current net metering policies foster and look at fairer ways to change the system.

All consumers are ratepayers. It is unfair to continue compensating roof-top solar consumers for excess power sold to the utility at rates that exceed the actual value of that electricity.  In adopting and shifting to these renewable energy sources, we must ensure that this shift is equitable and treats all ratepayers fairly.

What does fairness look like? Compensating roof-top solar users at rates that more accurately reflect the value of their excess electricity.

Consider, utilities are required to ensure customers access to electricity 24/7, 365 days a year, regardless of weather or natural catastrophes. The rates consumers pay are commensurate with that obligation. On the other hand, excess electricity generated by roof-top solar users is voluntary, intermittent, often comes at off-peak demand times, and is insufficient to power a neighborhood. While valuable, that excess electricity should not be compensated at the same rate as the power generated by utilities.

Solar energy will play an essential role in Wyoming – and America’s – energy future. But we must not overcompensate the 1% of roof-top solar users in our state at the expense of the 99% who do not use it or cannot afford to install panels.

Senate File 16 makes net metering fairer for all residents, and the Wyoming Rural Electric Association is pleased to support it.