Solar Power Users, Utility At Odds Over Backup Fee Alabama has some of highest solar fees in the U.S. and critics say it's hurting solar customers. It's one of several states where utilities are proposing or raising fees for homes with rooftop solar.
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To Some Solar Users, Power Company Fees Are An Unfair Charge

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To Some Solar Users, Power Company Fees Are An Unfair Charge

To Some Solar Users, Power Company Fees Are An Unfair Charge

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DON GONYEA, HOST:

Alabama's largest utility company charges a monthly fee for solar panels, and critics say it's hurting those customers. It's one of several states across America where utilities are proposing or raising fees for homes with rooftop solar. From Blount County, Ala., Julia Simon reports.

JULIA SIMON, BYLINE: Off the highway, down a dirt road and up a hill is writer T.K. Thorne's house. She points to a roof and a row of shiny black solar panels. So how many kilowatts is it?

T K THORNE: It's a small system. It's 4 kilowatts.

SIMON: Four kilowatts is pretty typical for a house in America, and Thorne got it almost four years ago, hoping to help the environment and reduce her electricity bill. Going solar cost her more than $8,000, Even with a federal tax break. Thorne estimated how long it would take to pay off the solar panels, installed them and hoped to see savings. But then she found out about a monthly solar fee from the state's largest utility, Alabama Power. The fee is $5 per kilowatt. So for Thorne, that's 20 bucks a month - straight to the company.

THORNE: Which doesn't sound like a lot of money, but what it actually does is double the time that it'll take me to pay off the system.

SIMON: Because of the fee, 65-year-old Thorne says it'll take almost two decades to pay back her panel.

THORNE: Yes, I may not be alive (laughter).

SIMON: Fees like this are unusual and add an extra price to the cost of going solar. Green energy groups say this fee is a key reason Alabama ranks near the bottom when it comes to home solar installation. Alabama Power spokesperson Michael Sznajderman says there's a reason for the fee and that's backup power. He says if a customer's rooftop solar panels don't provide enough energy, Alabama Power is still on the hook for backup electricity.

MICHAEL SZNAJDERMAN: There is a cost to have backup power service available to customers who demand it.

SIMON: Residential solar fees are popping up across the U.S. - New Mexico had one but got rid of it. Wisconsin is considering one, as well as other states. There are residential solar fees in Arizona, but they're not as pricey as Alabama's fee. Alabama Power currently has the highest backup fee for residential solar of any regulated utility in the U.S.

GAUTAM GOWRISANKARAN: How is that possibly the best they could do from a cost perspective?

SIMON: Gautam Gowrisankaran is professor of economics at the University of Arizona. He says Alabama Power is overcharging its solar customers in a couple of ways. First, solar customers in Alabama get paid a lot less for making solar energy than those in other states. On top of that, these solar customers are paying for backup power in their regular bills and paying an extra backup power fee. Gowrisankaran says he thinks this means Alabama Power's solar customers might be paying the utility twice.

GOWRISANKARAN: The bottom line is that, ultimately, they seem to be double counting, double charging essentially for the costs of backup generation.

SIMON: Alabama Power says there's no double charging, they're simply covering backup costs. Still, the legal advocacy group the Southern Environmental Law Center has complained to the state regulator, asking to get rid of the backup fee. The nonprofit says it's not fair to solar customers like Thorne. The Law Center's attorney, Keith Johnston, says what's going on in Alabama should concern people across America. It goes to the heart of how utilities have been charging for power. For more than a century, power came from power companies - period. But today, anyone can install solar panels on their rooftops and become power generators.

KEITH JOHNSTON: Solar is a real disruptor because it allows people to create their own energy, and so the utilities typically get very nervous about that. And so one way they can thwart that is to increase the cost to have one of those systems on your home.

SIMON: Now, following the complaint, Alabama's regulator will decide if the solar fee is fair. In the meantime, if any of Thorne's neighbors ask her if it's worth it to get solar, she tells them, no, not in Alabama. For NPR News, this is Julia Simon, Blount County, Ala.

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