Eversource will soon start charging customers for the privilege of soaking up some sun.
The solar industry has been in an uproar since the state Department of Public Utilities earlier this month approved a new “demand charge” that Eversource will impose on consumers who plug in solar panels for the first time after Dec. 31. (Low-income customers will be exempt.) The move could add more than $100 to a typical homeowner’s electric bills annually.
Eversource’s proposal had been under discussion at the DPU for much of the past year, but many solar developers hoped the Baker administration would nix Eversource’s request. Critics say it will slow the rollout of new panels in a state that has long been considered solar-friendly. At least one industry group, Vote Solar, is vowing to appeal.
“This is the first in the nation for an investor-owned utility the size of Eversource,” said Janet Gail Besser, an executive vice president at the Northeast Clean Energy Council. “It’s going in the wrong direction. Massachusetts has been a leader in terms of clean energy policy. It’s just surprising that this proposal would be approved in light of that history.”
Eversource spokesman Michael Durand said a residential homeowner with a typical solar system would pay an extra $119 per year because of the new levy, coupled with a related increase in another charge. That same homeowner would still reduce annual electricity costs by 84 percent by installing solar power, Durand said, instead of the 93 percent they would save without the new charges. He said Eversource would distribute educational materials to make the process easier for customers to understand.
The demand charge will be calculated using the highest amount of electricity a customer draws from the grid in any given hour in the previous month.
Critics say it will be hard for homeowners to budget for the cost in advance, and solar power could be a tougher sell to new customers because of this complexity.
“Frankly, we’re stunned and concerned that the commissioners approved this,” said Evan Dube, a policy director with Sunrun, a national solar panel installer.
Eversource says it is imposing the charge to make sure solar users pay their part for access to the poles and wires that bring power to their homes.
Electric utilities charge customers based on the amount of power consumed, which means they could end up receiving relatively little revenue from people who largely rely on solar panels.
But solar users still need those wires as a backup, or to distribute excess electricity that their panels produce.
“Currently, their neighbors are paying more than their fair share of those costs,” Durand said.
A spokesman for the Department of Public Utilities offered a brief on-the-record statement when asked about the agency’s approval by emphasizing the state’s leadership position in renewable energy. Baker administration officials argue that they want to balance the need for more solar power with the costs incurred by non-solar users.
Robert Rio, senior vice president of government affairs at the employer group Associated Industries of Massachusetts, said he’s skeptical this charge will slow the rollout of solar panels and noted that commercial and industrial users with solar panels already pay the charge.
“This is a very small amount of money,” Rio said. “If your solar breaks down or it’s not running for any other reason, it’s basically an insurance policy for a homeowner so they have this electricity there for them.”
Eversource’s demand charge comes at a time when the industry faces other challenges. BlueWave Solar executive Mark Sylvia, who heads the Solar Energy Business Association of New England, said that regulators are ratcheting down the value of incentives available to solar users, and there’s concern that construction costs could go up if new tariffs are imposed on imported solar panels.
Russ Aney, the owner of Avid Solar in Holden, said he’s probably going to stop marketing photovoltaic systems to residents in Eversource’s territory because of the impossibility of knowing the new demand charge’s financial impact for them.
He said Eversource isn’t properly recognizing the benefits to the grid’s capacity and reliability that come from a distributed approach to generation, spreading the sources of power across the grid rather than just at power plants.
“This has been something the utilities have been gunning for for years,” Aney said of the charge. “It’s based on bogus accounting that does not consider solar’s full benefits.”