AUDIE CORNISH, HOST:
When people install solar panels on their homes, they end up using less energy from their utilities. That's made for a rough relationship in some states between the solar industry and power companies. Recent agreement in Colorado may signal a growing middle ground. As Grace Hood from Colorado Public Radio reports, it could be a model for other states.
GRACE HOOD, BYLINE: If you've ever wondered what an extreme home makeover looks like for an environmentalist, take a visit to this garage in south Denver.
LANCE WRIGHT: All of this is the devices necessary to control our solar panels.
HOOD: Lance Wright walks past his electric car to batteries near the back wall. Solar panels are on the roof above and his home. He and his partner designed the system to maximize energy efficiency. K.K. DuVivier says that means the power moving through their meter is sometimes negative.
K K DUVIVIER: I have a picture of Lance with it going back to zero, you know, because we generated more than they used.
HOOD: They get credits from their utility, Xcel Energy, for power they add back to the grid. And they're not alone.
WRIGHT: Some people have the opportunity to brag about how smart their kids are or how fast their car goes. Our friends brag about how efficient their house is.
HOOD: But that efficiency comes at a cost for utilities. That's because the more energy that customers generate for themselves, the lower their utility bill. Utilities say that leaves less money to maintain the electric grid. This dynamic has created tension in states like Nevada. In 2015, Nevada utility regulators cut back on credits offered to solar customers. It prompted many solar companies to leave the state. The backlash was so strong, parts of the decision have been reversed. In Colorado last year, things were also looking tense.
ALICE JACKSON: It was quite an incredible two-and-a-half-month process.
HOOD: Alice Jackson is with Xcel Energy in Colorado. As more customers added solar, the company faced mounting losses. They wanted to charge a new monthly fee. That idea rattled the solar industry, so Xcel negotiated with two dozen parties, including consumer advocates and environmental groups.
JACKSON: We're not against solar options. We're not against our customers having different choices. What we have to make sure and what is what we feel is our responsibility is to make sure that when those personal choices are made, they don't cost their neighbors money.
HOOD: As part of a sweeping agreement, Xcel will try to find a way to cover grid maintenance costs even if electricity use goes down. Xcel also dropped the idea of a monthly fee. But it will experiment with charging different rates. As part of that, K.K. DuVivier and Lance Wright will pay more for electricity during peak times. They consider it a challenge.
WRIGHT: We're aiming for net zero carbon with our home, and we're going to be close.
HOOD: Savvy customers can save money, and that actually may help Xcel if they don't have to ramp up extra power sources during the hottest days of the year. The agreement also calls for a big expansion of community solar farms.
TOM HUNT: All right, in you go.
HOOD: Tom Hunt with Clean Energy Collective unlocks the fence to a large array of panels his company built outside Boulder. He says the option is attractive to customers who live in apartments or homes where solar won't work.
HUNT: Most of the projects being built now are about double this size, two megawatts. So you'll get another 55 or so of these over the next three years.
HOOD: Xcel and solar advocates like Hunt will continue to meet and discuss future challenges like the next big shift when more rooftop solar customers install batteries to store energy. The hope is to diffuse future battles before they happen. For NPR News, I'm Grace Hood in Denver, Colo.
(SOUNDBITE OF SMITH AND MUDD'S "SHULME")
NPR transcripts are created on a rush deadline by Verb8tm, Inc., an NPR contractor, and produced using a proprietary transcription process developed with NPR. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.