Wealthy Solar Users Benefit from Subsidies

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In a recent report by AZ Central, the practice of net metering took center stage. Politicians and solar companies have been at odds in Arizona over this method of utilities payment. The trouble is in the way that stored energy can be resold to the utility companies.

Because solar energy can be stored throughout the day, customers have been allowed to sell the excess back, leading to a lower monthly cost. While this seems to be a fair exchange, Arizona utility companies worry that, by purchasing the excess at a retail instead of a wholesale price, what they are giving to these wealthier users is an unfair subsidy that makes the energy exchange a lucrative business for the customer.

The solution may be demand charges, which, rather than charging for the total kilowatts used, charges for the highest average of kilowatts used in a given period of time. This would help balance the energy costs as solar users tend to use energy in larger surges than non-solar users, a practice that can cost the utility companies more in service and repairs.

Solar users would still be able to sell back excess energy, hopefully at a wholesale price. This would still give benefits to those users while not forcing utility companies to raise their prices in an attempt to balance their losses from subsidies.

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