Kentucky Lawmakers Consider Bill That Would Scale Back Solar Incentives

Feb 1, 2018

Credit Creative Commons

State lawmakers are once again considering a bill that would scale back how much homeowners with solar panels get reimbursed for putting energy back into the electrical grid, though the legislation has stalled for the time-being.

Electric utilities are required to give Kentucky households credits that can be used on future power bills for generating excess energy. Currently those credits are equal to retail price of energy, but under House Bill 277, the credits would be reduced to the wholesale price of energy.

Opponents to the legislation packed a committee room where the bill was presented on Wednesday, saying the bill would make installing and maintaining solar panels less affordable and slow down growth in the industry.

Jamie Clark, owner of solar company Synergy Home in Lexington, accused utility companies of supporting the bill in order to preserve their monopoly on energy generation.

“Let me be very clear, the utility is not anti-solar, they just don’t want customers having alternatives to buying power from them,” Clark said.

There are about 1,000 households in Kentucky that have solar panels and participate in the net metering program.

The value of credits received by solar households would be slashed by about two-thirds by reimbursing at the wholesale rate instead of the retail rate.

Rep. Jim Gooch, a Republican from Providence and sponsor of the bill, said that electric utilities aren’t being fairly compensated under the current structure.

“They’re also charging you the cost for maintaining the grid, whether it be lines, or poles, or workers, debt service on their generators,” said Gooch. “All those types of things go into the cost that they actually charge you when they sell that electricity.”

Brydon Ross with utility-backed Consumer Energy Alliance, said that net metering has outlived its original purpose of incentivizing use of a fledgling technology.

“Over time, the structure used to incentivize private solar deployment has led to sustained losses to cover the cost of providing electricity 24 hours a day, 7 days a week,” Ross said.

The legislation was debated during a meeting of the House Natural Resources and Energy Committee, chaired by Gooch, on Wednesday.

Gooch adjourned the meeting without a vote, possibly signaling there weren’t enough votes in favor of passing the bill.

Rep. Tim Couch, a Republican from Hyden, expressed skepticism about the legislation.

“I need the utilities to explain to me how they’re not breaking even or making money off of this purchase, or this excess of net metering,” Couch said.

Last year lawmakers considered a similar bill that would have changed the reimbursement rates for future customers. It was discussed in committee, but never voted on.