Texas Electric Utilities and Their Less Than Sunny Disposition Toward Home Solar
By Kamil Cook
Three years ago today, many Texans learned something new the hard way: Winter storms, like their warm weather cousin the hurricane, also have names. On Feb. 13, 2021, residents of the Lone Star State met Winter Storm Uri.
For the following week, Uri hammered much of the state with snow and ice. Single-digit temperatures were brought into millions of homes when the power buckled, triggering weeks of power outages. Hundreds died from the outages, primarily the result of frozen fracked gas infrastructure that starved the gas-dependent grid of the fuel to generate electricity. Since then, there have been marginal improvements to the grid’s reliability, like greater weatherization standards of gas-burning power plants that, strangely, the Texas Legislature made largely optional. It is understandable that many still worry about the reliability of our grid each winter.
One resource that could have helped keep the lights on is customer-sited solar, the term used for solar generating systems installed where the utility customer lives.
Unfortunately, according to research released by Public Citizen this week, many Texans cannot afford customer-sited solar (often called rooftop solar) for their homes or businesses because of the policies of their electric utility. This research found that a patchwork of solar unfriendly policies at 141 noncompetitive electric utilities are making investments in home solar less financially viable. For example, the average customer at most utilities who purchases a solar system with a loan won’t see enough savings to recover their investment in at least 15 years. Even those who can afford to skip the loan and pay for their system in cash will likely have to wait over 10 years to break even.
Customer-sited solar offers many benefits to the electric grid, utilities, and society. It can reduce transmission congestion and energy demand. Customer-sited solar can also mitigate distribution system and ancillary services costs, which are essential to a functional grid. Not to mention, rooftop solar helps the grid decarbonize and reduce fossil fuel emissions.
No single policy holds back home solar in Texas, but we did see some commonalities between the utilities. Unlike many other states, Texas has no set standard for compensating excess electricity that a customer with solar sends onto the grid. There is also no Texas statewide net metering policy nor set formula for calculating the avoided costs from customer-sited solar. Each utility gets to define the value of this resource, and the municipal electric utilities and electric cooperatives don’t even need the approval of the Public Utility Commission of Texas (PUC) to do it.
What it all adds up to is a rooftop solar crisis.
Without fair solar compensation policies, such as net metering, average Texans cannot afford to purchase or finance solar systems in many parts of the state. Even though an estimated 90% of Texans supportnet metering policies, most monopoly utilities in Texas either provide no compensation for on-site solar energy production or offer compensation that is a fraction of the retail price of electricity.
A statewide policy effort is needed to remedy these solar compensation policies. A first step in doing this would be for the PUC to study the value of customer-sited solar to utilities and the grid. Without a statewide effort, getting Texas monopoly utilities to improve their solar policies will be very slow and challenging. That said, Public Citizen and its partners will continue assisting customers who want to advocate at their local utilities for solar policy improvements.
Customer-sited solar should be essential for strengthening and decarbonizing the ERCOT grid. Because Texas lawmakers are generally slow to embrace anything threatening the state’s dependence on fossil fuels, this is a case where change can begin at home, specifically at the utilities serving communities across Texas. It needs to happen quickly, hopefully before Texans are introduced to another named storm they will never forget.
Kamil Cook is a climate and clean energy associate for the Texas office of Public Citizen