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What the Devil won't tell you

A look at TEP's 'threat' to solar

Even if big business wanted to block out the sun, it really can't

The "War on Solar" is coming to Tucson and the photovoltaic future of the world hangs in the balance. Solar in Nevada has already fallen. Up in Phoenix, the firefight has cost the state 25 percent of our solar jobs. The horror, right?

Well, hold on just a second. I started this column with the solar folks having boiled my blood so my hands were eager on this knifey keyboard. Now? Not so much.

Tucson Electric Power has a rate case pending before the Arizona Corporation Commission that would jack customer bills across the board, but the big news involves proposed changes to "net metering." Tucson's power utility wants to cut the savings solar customers receive by buying at wholesale — no longer retail — prices the excess energy solar-lit homes generate.

Solar companies gambled and lost when they invested heavily in the 2014 ACC elections. The electric lobby got its candidates elected and now the quid seems to be pro-quoing.

Even more background: The TEP case isn't the important case because Unisource Energy Services has a nearly identical case before the Corporation Commission right now. That case will largely decide TEP's fate later this year. 

The deal is this: Incentives let single-family homes work like utilities, selling power to the general electrical grid, and that makes solar more viable on the consumer market. TEP's 9,000 solar customers each staked a substantial investment of up to five figures, but the costs make sense because tax credits cut that cost in half and selling back excess power means the rooftop investment pays for itself.

But the change in the law means customers will take twice as long to redeem their costs.

Liberal media has been awash with talk about how solar is under threat from rearguard counter-strikes by the utility monopolies. The Koch Brothers' attacks on solar energy in Florida were detailed in Rolling Stone last month.

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So it's the end of the world as we know it and you feel hosed?

I have no doubt installers like Solar City will lose in the near term. I have tremendous doubt that the Arizona Corporation Commission can in any way derail the solar-paneled freight train rolling down sustainable tracks.

Nothing like Florida's outright ban is even being considered in Arizona. The more you look at the issue the more you realize everyone is full of shit and it seems like this is a case where one batch of rich people are going to war with another batch of rich people.

It seems more a speed bump on the inevitable road because costs are coming down hard and Arizona isn't the only neighborhood that shops at this particular grocery store.

Everyone's a winner

One broad talking point against government incentives argues the state should not be "in the business of picking winners and losers" because "the market should decide" and solar can't survive in the free market without incentives.

I don't even know what to say to that.

Oh wait. Yes, I do: "Oil depletion allowance." It lets oil companies to write off the oil in the ground as a "capital asset." Solar companies are not asking to write off the damn sun. Burger joints can't write off beef cows as hard capital. And yet somehow Exxon-Mobil can write off its crude oil as if its a drillpress or fryolator. 

Fracking companies are allowed to exercise eminent domain and condemn private land — authority other private businesses typically don't get. To make fracking viable, those companies take land from property owners. Sure, there's compensation, yet because the land owner can't say no, the price tends to favor the frackers. That burger joint can't walk onto a Nebraska farm and seize part of it to set up a McDonald's nor can that restaurant stick the landowner with E. coli liabilities when its poisoned burgers kill customers. In some states, if hydraulic fracturing operations cause a spill that seeps under a neighbor's property, the farmer is legally liable for it.

Good gig if you can buy a Legislature, I guess.

Coal gets subsidized. Ethanol? Oh my God, yes. Anyone hear the cheerleaders of the nuclear power industry bitch about federal interference in the form of loan guarantees, Department of Energy-backed research or the Manhattan Project? No? 

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Free market? The global oil price is largely set by a cartel. The Organization of Petroleum Exporting Countries colludes to artificially fix prices based on what's best for the cartel. The free market has nothing do with it.

Picking a loser

When it comes to energy, all the government does is pick winners and losers. By not giving solar a subsidy, government is picking it as a loser.

The key to understanding solar's long-term benefit to economic and national security is that it's a technology and not a resource. It doesn't run out and its prices don't fluctuate like fossil fuels. Solar comes without black lung disease, reactor meltdowns or kitchen water faucets spitting fire. Conservatives griping about economic uncertainty, Islamic extremism and Iran's rising fortunes should love solar. However, liberals pursued it first so it's bad.

That's a winner I want to pick.

I haven't even gotten to climate change ... sorry ... I mean "the greatest lie every perpetrated on the American people" since liberals argued "cigarettes are bad for you." Although, Tucson was just seven degrees warmer than the North Pole on New Year's Day. Tucson. Arizona. 

So if we're ever going to pick a winner, solar seems like a good winner to pick. I'm not the only one who knows that and neither are you. Power companies get that too but it's for their own reasons.

Of monopolies and SkyNet

I enjoy harpooning big, sweaty corporations as much as the next rouser of rabbles. However, we tend to ascribe them the all-knowing, all-powerful traits of gods because Eastman Kodak and American Motors were that fucking powerful. "You can't take on Wang Computers, Steve! You are just one man."

Companies like Wang and Kodak are cautionary tales because they didn't see technology changing the field and tried to cling to the saddle in the face of the Model T.

Kill solar? It's a technology. Technology reaches an inflection point and it can't be stopped: It gets better. More people want it. Costs drop like a rock. The whole story of 21st century technology has been about decentralization and solar is all about decentralization. I think in the case of solar, SkyNet has become self-aware.

If that ain't enough, there's another player in the solar market, and it goes by the name of Defense Advanced Research Programs Administration. DARPA doesn't screw around (but don't ask too many questions reader because you aren't ready for the answer). Yes, the bleeding-edge military industrial cabal is rolling out light-weight battlefield solar much as they rolled out GPS long before our cars barked orders at us. There's a reason the secretary of the Air Force stood next to a field of solar panels at Davis-Monthan when she stopped here on a glad-handing tour last week.

Subsidy math

The current math about solar power paying for itself assumes the technology's cost will remain constant and high in the near and long terms. It won't. Costs are cratering with estimates seeing it fall by half in the not-too-far-off future. That alone will make up for pricier net metering.

In Arizona, up to 55 percent of solar power installation is covered by tax credits (the federal portion may go away next year, which would be a big deal). The price is calculated in a per-kilowatt basis and is heavily dependent on the amount of sunlight a rooftop receives.

Solar costs are expected to soon fall from $5 per watt today to $1 to $2 per watt. That right there would more than make up for the lost savings in new installations.

Under TEP's proposed new rules, the average customer would save $56 per month, when they save $97 now. It would only affect customers with rooftop solar and only applies to those who installed their panels after June 1, 2015.

Solar installation costs have fallen by 80 percent in the last 10 years. Future advances in tech will likely return TEP customers' costs to today's prices.

Look, even if the Kochs and Tea Party managed to shut down solar power for a beat in all the red states, the technology has the rest of planet Earth to find its footing. It will only get stronger and in so doing, TEP would be silly to even try to pretend it can vanquish the sun.

Old grid, new grid

TEP has been noodling around alternative energy and seeking to expand solar usage for years now.

So TEP spokesman Joseph Barrios sounded exasperated at the accusation that the utility is trying to put solar out of business. 

"We're actually working with local solar power companies and are looking to expand that program. All we're really trying to do is have rates that give us the opportunity to recover the costs of providing the service," he said.

Goodness of their hearts? No. The last row of shock troops in this march to change are the MBAs, whose only weapon seems to be "cut costs for shareholders"

Lazard, a global financial asset firm, does an annual report tracking renewables.  In an action plan submitted to the CorpComm this month, Tucson Electric included a reference to a pretty indecipherable blurb from Lazard:

The pronounced cost decrease in certain intermittent alternative energy technologies, combined with the needs of an aging and changing power grid in the U.S., has significantly increased demand for energy storage technologies to fulfill a variety of electric system needs (e.g., frequency regulation, transmission/substation investment deferral, demand charge shaving, etc.). Industry participants expect this increased demand to 2016 to drive significant cost declines in energy storage technologies over the next five years. Increased availability of lower‐cost energy storage will likely facilitate greater deployment of certain alternative energy technologies.

The key to solar has always been storing the power for later use. It's getting newer and cheaper while coal is getting older and more expensive. The right's insistence on not investing in this kind of infrastructure is knee-capping the industries it seems to stand up for. So long as the economy is infested with MBAs looking only to cut costs today for shareholders tonight, the switch to renewables is bound to happen.

In the words of my ex on game day, "Even if you don't wanna. You hafta."

TEP not unreasonable ...

You don't have to believe Barrios when he says TEP cares.

"When we file a rate application — we don't do so lightly. We know an increase of even a few dollars is going to be a hardship on some of our customers," he said.

You just have to believe the company is somewhat proficient about knowing the future of its industry.

TEP has a point in wanting to change its current pricing regime that forces it to buy back rooftop solar at retail prices. I mean, think about it. Who else gets to sell a wholesale product for retail prices? Then again, Big Oil can write off crude as a capital expense but a blogger writing off "the entire Internet" would land in prison.

Solar power customers use the grid at night or on cloudy days and Barrios pointed out TEP has already paid for improvements to the system the rate increase will cover.

"These rates do a better job of recovering rates that are providing. And we want to make them fair," Barrios said.

If you are looking for a reason to get your torch and pitchfork, it's this: Tucson Electric's broader plan is to reverse the practice of charging business and industry higher prices to subsidize residential rates. The rate hike could protect Raytheon at the expense of Nana.

So the argument I absolutely don't buy is that the industry is somehow looking out for the little guy by cutting what amounts to a subsidy of those who can afford the up-front costs. If that were true, TEP wouldn't be asking for a steep and regressive increase in its $10 monthly fee.

Solar still needs the same kind of love used to encourage its production to continue to achieve these savings. As long as frackers can condemn land, oil can be written off as a capital asset and nuclear leans on federal help, solar suppliers in the form of individual solar customers should make their voices heard too.

How much is a political question worth asking. It's better for everyone if we hasten the day that we turn on lights without making ISIS/ISIL/DAESH/whatever-they're-called-today rich. I would also type this column in a way that bides time before sea levels rise and the sky is full of methane bombs exploding over the oceans (if you don't know what that has to do with permafrost STFU about climate change not being a problem).

Tucson Electric is proposing changes in rates. Do you think they are dumb enough to ask for their rock-bottom price? Or do you think registering your discomfort will drive those rate hikes down? Answer: yeah, they will. Just remember that the case you want to bang the drum over isn't TEP's case before the commission.

So hold up your end of the negotiation.

Maybe you can get the Corporation Commission to split the difference or say "no" entirely to what TEP is requesting.

Fly your flags. Be heard. Just don't buy into the hype swirling around solar. It's no more facing a mortal threat than is the sun.

Blake Morlock covered Arizona government and politics for 15 years, including 11 in the Tucson Citizen. He also worked on Democratic Party campaigns in the field of political communications. Now he’s telling you things that the Devil won’t.


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have your say   

1 comment on this story

1
5 comments
Mar 28, 2016, 5:27 pm
-0 +1

Blake,

Not a bad read. I have to call you out on presenting a lot of your own, if informed, opinions, along with TEP’s talking points. I suggest you contact an informed owner of rooftop solar such as Robert Bulechek <rbulechek@energy-man.com> before you go reporting on the subject.

Fact: I consistently generate excess power.

Fact: I consistently still have to pay TEP. Every month, every year, even while I am ‘selling’ them my ‘excess’ power.

Fact: My solar operates at maximum efficiency when the local demand for cooling is highest. This saves TEP a bundle, as they can rely on their baseload generation, and avoid operating their most expensive “peaking” plants.

The game has already been rigged. I consistently generate excess, and I pay for it on top of that. I really suggest you contact Robert or someone reputable for a detailed explanation of “REC credits” (IIRC) and how that works against us, so they never really “pay” us anyway.

Thanks for making individual owners of solar out like the bad guys as usual. You might look at those with all the money & power (lol) first, then ask some people who actually live with the policies for their experiences, then do some research on the mechanics of what’s really going on. If I’m not mistaken, this article just says, TEP bad, solar good, but who cares? They are already treating us like a milk cow!

Regards,
Desert

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Brandon Quester/Cronkite News

Solar panels on top of ASU's Wells Fargo Arena, 2011.

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