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It’s an interesting — and critical — time for rooftop solar in Utah. Since we last updated you about whether clean energy here will continue to grow, or be thwarted, plenty has happened, even as an ultimate resolution may be months away.
Time for a rooftop solar update!
Rooftop solar generation is on the cusp of the mainstream. That helps explain why there is so much happening in rooftop solar policymaking right now, both at the State Legislature and at the Public Service Commission.
Let’s talk first about legislation. Last Tuesday, the House Revenue and Taxation Committee voted in favor of phasing out Utah’s “solar tax credit.”
For a little background, the cost of rooftop solar systems in Utah has dropped dramatically in the last few years – and thus we’ve seen amazing growth in rooftop solar installations. Today, many middle-class Utah families can afford to install systems. One key factor are Federal and State tax breaks. In 2016, a customer could get up $5,000 from the feds and $2,000 from Utah.
Those supports have worked! We have gone from about 600 credit applications to almost 16,000 in 2016. Great news. Amazing news! But the big increase in the solar tax credit’s cost, from $700,000 in 2011 to almost $17,000,000 in 2016, caught the attention of more fiscally conservative lawmakers. (Those same fiscal conservatives didn’t balk at the $53 million bill for their investment last year in a coal terminal that will never get built, but, hey, I digress.)
One those representatives is Jeremy Peterson. Rep. Peterson brought forth a bill phasing out the solar tax credit in the fall. It was, to say the least, terrible. The bill would have capped the annual credit amount at $4,000,000 and decreased the credit itself by $500 each year until it is completely phased out in 2022. The biggest problem was the cap.
Imagine you are a roof solar company trying to sell a system, what do you tell your customers? “Well there is a state tax credit, but it’s going to run out pretty early each year, but I can’t tell you exactly when, but if you can’t get it this year then it is available next year but at lower amount and that will run out too but I can’t tell when either…..” You get the idea. It would be very disruptive to the solarindustry.
Ever since the bill first came out, HEAL and our allies (and you!) urged legislators to preserve the tax credit, educating them about solar’s many benefits. The solar industry soon entered negotiations with Peterson and legislative leaders. Last week, the results were presented. The credit is still being phased out – by $400 each year starting in 2018 — but, critically, the cap was removed.
Now wait! You must be saying. Why should we reduce the tax credit at all? What about climate change? What about all the subsidies fossil fuels have received? Shouldn’t this credit be continued indefinitely? Short answer is; you’re right. We need to do everything we can to increase the growth of clean renewable sources of energy.
However, the reality is that given the politics of the State Legislature in the red state of Utah, this credit was headed for the chopping block. In that context, this compromise is a good one. It will also open the door for government incentives for battery storage and helping pay for the electric grid transition to a more renewable friendly design. The bill will be voted on by the full House later this week.
The other big happening right now is occurring over at the Public Service Commission. You may remember that back in November, Rocky Mountain Power sought to charge three separate fees on rooftop solar customers – which would make the technology much less affordable. See our press release and a Salt Lake Tribune article for context.
In response, HEAL and our allies put pressure on Governor Herbert, making sure he knew how much support rooftop solar has in Utah – and how important the growing sector is to the state’s economy. With your help, we directed thousands of emails and messages to the Governor’s Office. And it worked!
The Governor (and I promise you this does not happen very often) is now hosting a series of meetings between Rocky Mountain Power, the solar industry, and advocates in the hopes of a forging a compromise. It’s early, but HEAL is at the table and we’re pushing for these meetings to include discussion of the many benefits rooftop solar brings to the electric grid.
HEAL prides itself on connecting the public to these technical policy and regulatory processes. Right now, we’re awaiting a ruling from the Public Service Commission on what timeline this issue will be discussed under. While we wait, and while the Governor-led negotiations proceed, we are in a weird moment where there have not been opportunities for the public to weigh in. But that is going to change soon.
Once we have a firm idea of the timetable, we are going to make sure you have multiple opportunities for you to be informed and your voice heard. We’re even working with the Sierra Club on a plan to host town hall meetings around the state to talk through these complex solar issues – and what you can do to fight for this key clean energy resource.
So, stay tuned! We promise, even as this critical issue is in a quiet phase, we’re working hard. And, soon, we’ll need your help.
Your Ray of Sun Shine,
Michael Shea
P.S. If anyone’s interested in how HEAL works behind the scenes, please consider attending our annual public meeting of our Board of Directors. We’ll discuss our budget, fundraising and program — and take questions and suggestions from attendees. That meeting will be Wed. Feb. 15 at 5 pm at HEAL’s office at 824 South 400 West. If you’d like to attend, please RSVP so we know how many folks to attend. Thanks!