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Utah Business

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Why Utah needs to get on board with solar energy

According to Dan Black, chief legal officer at Vivint, the idea of converting to solar panels was about as ridiculous as buying a new car and putting it on your roof, since the cost in investment is about the same. 

For years, customers would think—expensive, complicated, and impractical. However, Black says generous tax credits at the state, and a 30 percent federal tax credit over recent years have helped bring the cost of solar down, convincing homeowners that it’s a worthwhile investment. 

“[The customer] begins to realize ‘I can break even on this investment inside of 10 years and then I have my own power plant on my roof!’” Black says.

These credits have helped solar especially make leaps and bounds in advancing the renewables industry—but then the storm clouds of 2020 gathered on the horizon. The pandemic-filled year cast a shadow on solar as it did the rest of the economy, affecting renewable sales while the US trade war also affected global supply chains. 

And just as the solar market was heating up—policymakers cooled to renewables and the aforementioned lucrative federal tax credit is set to expire entirely in 2021.

Renewable rebound

The International Energy Agency is a Paris-based agency that monitors energy supplies across the globe. In its May 2020 Fuels Report, the IEA announced renewables would take a hard hit for 2020—declining by 13 percent compared to 2019. Still, industry advocates are excited, and many feel they have weathered the storm.

“This is a 20 percent downward revision compared to our previous forecast in which 2020 was due to be a record year for renewable power,” the report states. 

The sunny news, however, is that “the majority of these delayed projects are expected to come online 2021 and lead to a rebound in capacity additions.” The IEA expects 167 gigawatts in renewable (over half from solar) to come online in 2020 even with the obstacles— one gigawatt alone could realistically power several hundred thousand homes.

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Black says Vivint has come through the pandemic and is back to almost “100 percent pre-COVID” levels of activity, though they still had to furlough employees and take other cost-cutting measures such as temporary salary reductions to avoid deeper cuts. Nevertheless, he says the market isn’t going anywhere as it continues to catch on with new consumers.

“It sounds corny because its kind of a cliché, but distributable solar really is the democratization of energy,” Black says. “For 150 years the way it’s worked in this country is people buy power from a monopoly utility, it’s piped in from who knows where, out in the desert somewhere, I turn on the switch and it works,” he says. But more and more consumers now realize they don’t just have to plug into a monopoly when they can literally take the power back and bring it on home.”

“We’re putting power into consumer’s hands instead of some large conglomerate,” Black says.

And despite the downturn, solar isn’t just catching on with consumers—but also investors. Over the summer it was announced that Sunrun would acquire Vivint Solar in a $3.2 billion deal to be completed at the end of the year. It’s a big bet on a bright future—especially since residential solar has so far only penetrated 3 percent of the market, leaving lots of room to grow.

Of course, unfriendly energy policies can cast shade on the industry.

Jeff Lee, the EVP at American Fork-based Blue Raven Solar is proud of his company’s strong growth. Since 2014, the company has expanded to 13 states, employs hundreds of employees, and was even named by Inc. as one of 2019’s fastest growing companies in the nation with its astounding 1,673 percent three-year revenue growth.

Blue Raven distinguishes itself by selling the whole system to consumers so they get all the savings possible and not just a discount on their bills. “Everything we build for the customer―they own it,” Lee says. 

However, Lee notes that Utah was blazing a trail for solar until about 2017, when Rocky Mountain Power (RMP) clashed with distributed solar providers, arguing that solar owners were costing regular ratepayers more than their fair share. Both Lee and Black credit Governor Herbert for helping to broker a settlement with RMP and solar providers that brought stability back to the market.

“Solar took a massive decline at the of 2017 with [RMP’s] proposed changes, but we’ve seen it come back a lot in 2020 and thousands of homes have gone solar,” Lee says.

Nevertheless, he worries that RMP is making misleading and exaggerated claims about how solar will increase rates for everyone in anticipation of a hearing before the Public Services Commission this fall. 

Lee says he worries most consumers don’t realize the decision is actually not up to RMP but will be decided by the Public Services Commission. He likens the situation to his son wanting chocolate chip cookie dough for breakfast, “but the commission is the Mom or Dad saying ‘that’s great, but this what you need.’”

Banking on renewables

While distributable solar companies like Blue Raven and Vivint are in something of a power struggle with RMP, spokesman Spencer Hall notes that RMP is banking on renewables as well—just at a much larger scale.

He notes that the company just finished investing more than $3 billion in renewables, mostly in wind production in Wyoming. The utility is also helping with other larger projects such as creating a 100 percent renewable campus for the proposed Facebook facility in Eagle Mountain, as well as their building of an on-site solar battery at the Sole Lofts in Herriman.

Hall says RMP has been accommodating of distributable solar customers but points out that utility-scale projects provide more renewable benefits for a greater number of individuals than residential solar.

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“We’ve announced producing 7,000 megawatts by 2023 of renewable and there’s currently only about 320 megawatts of installed rooftop solar,” Hall says. “What we’re moving toward is giving the benefit of renewables and solar to all of our customers, not just a few.”

Black however, says it is still a fight. Among the 22 states the company operates in he says Utah is “at the bottom of the pack.” Besides contending with the outsized influence of RMP he notes that solar is business that some people see through a political lens, rather than an economic one.

“This is an economically viable industry and it provides jobs, you would think a state like this would want that,” Black says. “But [many] are just focused more on anti-climate change rhetoric.”

However, Utah is home for Black so he’s hopeful the state will come around more to supporting the industry’s future.

“Every January we get to see the ills of inversion and pollution, and I can’t help but think think ‘Wow, if we can put more electric cars on the street and more solar on rooftops, my daughter, who has asthma might actually be able to go out at recess in January,” he says.

Comments (1)

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    Erick Allen

    Nice article. It’s important to note that grid provided renewable energy is becoming the new standard because it’s simply more cost effective for the utility. Ideally, utility provided energy should serve as back-up power to distributed energy resources (DERs) as a public good/service. When we decouple the profit motive from the grid amazing things can happen. DERs provide more energy security to local consumers (i.e. massive wind storm we had a month ago), incentivize electric vehicle ownership, (because it makes them less costly to operate), promotes investment in local infrastructure for generation, EV charging stations and other technology, reduces carbon emissions on a local level and decreases air pollution (as mentioned). In all realities, the best grid is a “smart grid” that operates in both directions that not only gives consumers many options, but that can also support low to moderate income households with their utility costs (see the Denver Community Solar Project). When power only flows one way, the rate payer is beholden to what the utility charges. With DERs, competition and collaboration grows over time and the rate payer wins, not just in electricity/natural gas costs, but in a higher quality of life. Wasn’t this the point of creating regulated/monopoly utility markets in the first place? Let us not forget that rate and tax payers pay for all this and always have. Shouldn’t an electrical grid then be designed to maximize the benefit to the end user?

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