Rates, fees, and other policies are making solar investments financially difficult for homeowners
AUSTIN, Texas – Texas electric utility policies for residential solar installations make investments in the technology less financially viable and threaten timely deployment in a state that has struggled to meet energy demand, a new report released today by the Texas office of Public Citizen finds.
The report, Eclipsing Progress: The State of Solar Rates and Fees at Monopoly Electric Utilities in Texas, examined 141 noncompetitive Texas electric utilities and their policies for customer-sited solar – the term used for solar systems installed where the electric utility customer lives – and compared the bill savings to the cost of purchasing and installing a home solar system.
According to the report, ratepayers at most utilities who take out loans to purchase and install a home solar system would take longer than 15 years to recoup the investment. Statewide, the policies are so counterproductive that at most utilities, even homeowners able to bypass financing and pay for their system in cash on Day 1 won’t be able to recover their costs within 10 years.
“Texas has lots of available sunshine, but electric utilities make it difficult for customers to capture this clean energy resource,” said the report’s lead author, Kamil Cook, Public Citizen climate and clean energy associate. “Uri laid bare the fragility of the state’s grid, and home solar is part of the solution. However, in many cases, unfair rates and other utility policies are standing in the way. Regardless of where they live, Texans need certainty that one of the most significant investments in their home will pay off.”
Ratepayers with customer-sited solar are subject to fees and other policies that vary from utility to utility. These ratepayers can also be compensated for supplying excess energy their solar panels generate back to the utility. The mix of fees and poor compensation rates can put solar installations out of reach or extend the financial feasibility decades into the future for most ratepayers.
Key findings from Eclipsing Progress:
- In some circumstances, no utility has the conditions that allow a residential customer to recover the costs of an on-site solar system in 10 years if the customer finances their system with a 10-year loan.
- Most of the utilities analyzed don’t offer net metering, a policy that compensates customers for solar-generated power sent back to the grid at the same rate at which the customer purchases it.
- An unfair two-way street: The average compensation rate utilities pay customers for excess solar-generated energy is only 43% of what the same utility charges for the energy it sells to all its customers, including those with customer-sited solar.
- The average monthly payments on 10- and 15-year loans to purchase a solar system are higher than the average monthly energy savings at most of the analyzed utilities.
The report’s recommended fixes include:
- A standardized statewide policy that determines a fair rate of compensation for energy returned to the grid.
- A study by the Public Utility Commission of Texas to guide the state’s utilities on fair compensation rates.
“Heading into retirement, a home solar installation made sense for me to offset energy costs and a safeguard against power outages. I also see it as doing my part to help stabilize the grid and energy prices for my community,” said Sam Jones, a North Texas homeowner. “Last year, my utility announced it was moving the goalposts by changing its rates in a way that will slow my return on investment. I already have my solar panels; what also worries me is that Texans in a similar situation will do the math and take a pass on a solar installation if it’s not worth the investment. Home solar is a good thing that should be as accessible as possible to any homeowner who wants it.”