Episode 130: Why are some power companies charging a fee to customers who install solar panels?

Jay Apt, a professor at Carnegie Mellon University’s Tepper School of Business and in the CMU Department of Engineering & Public Policy, explains why utility companies are charging consumers for investing in solar energy.

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Customer Choice and the Power Industry of the Future from the Congressional Research Service

Straight Talk About Net Metering from the Edison Electric Institute

Net Metering from the Solar Energy Industry Association


Transcript

HOST: Have you ever wondered by some power companies charge a fee to customers who install solar panels? On this week’s Energy Bite, Jay Apt, a professor at Carnegie Mellon University, has some answers.

APT: The issue of what the specialists call net metering, being able to sell power back to the electric power grid at the wholesale prices, and the issue of standby charges, what the utility will charge a customer just for standing by so they have a source a power when they aren’t generating power themsleves, those are two of the most contentious issues in electric power today.

HOST: Why is it contentious?

APT: Solar panels can reduce a homeowners need for kilowatt hours from their utility. But the utility still has to keep the wires and transformers in place to supply that customer with power when the need it – at night, when their battery is out of juice. In order to pay for those transformers and wires, the utility has to charge something to the customer. The argument is whether they are charging a fair or unfair amount.

Whether or not it is fair depends on whether you are the customer or the utility. And resolving the issue will probably require an independent commission, say the public utility commission of a state, to determine what’s fair.

HOST: Do you think power companies should charge a fee to customers who install solar panels? Take our poll, see the results, and ask your energy questions at Energy Bite dot org.

ANNOUNCER: Energy Bite is a co-production between 90.5 WESA and Carnegie Mellon’s’ Scott Institute for Energy Innovation.

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