Proposed rate change puts solar at risk in Colorado High Country

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Jessica Fishman, Clean Energy Marketing Expert

The Holy Cross energy is relatively small, Membership electric cooperative Colorado ski country serving 44,500 customers. It is known for having a progressive climate policy and has ambitious and exemplary goals. 100% renewable energy by 2030However, it is now proposing a change in rates and is at odds with solar installers and solar customers.

Colorado net metering

Colorado residents set a milestone in November 2004. Fix 37, First renewable energy standard Approved by public vote in the United States. Then Colorado died in 2008. further legislation “Requires municipal utilities with over 5,000 customers and all electric cooperatives to provide net metering (NEM) for residential systems up to 10 kW and commercial and industrial systems up to 25 kW. So far, Holy Cross Energy has followed both the letter and the spirit of that law.

However, that new rate change separates delivery costs from energy production costs and adds new peak demand charges. This accounting trick by HCE to split items on the bill was intentional to circumvent Colorado’s net metering laws and avoid paying a 1:1 ratio for solar energy production and energy grid consumption. It’s an attempt.

There have been previous attempts to circumvent Colorado’s net metering law and discourage residential solar installations.For example, in 2009 Xcel was sun tax at the beginning of this year defendant “Intentionally delaying hundreds of solar energy sites” as a cost-cutting measure.

Net metering and the evolution of the solar market

The typical evolution of the solar market is from feed-in tariffs (FiT) to net metering and then to some form of self-consumption, time-of-use (ToU) or virtual power plants (VPP). However, the timing of this transition is very important. A solar market that is not mature enough to move to the next incentive model could suffer a severe and devastating crash. For example, when the UK sharply lowered his FiT for small residential PV systems, the market fell from over 500 MW.DC Under 200 in 2015 following year, and remained low for at least another five years.California on the other hand recently evolved to NEM 3.0 and there was a lot of opposition but after it got there well over 30% penetration of the sun. This compares with HCE’s residential solar penetration rate of only 4%.

Impact of HCE rate change

Holy Cross Energy (HCE) says its new pricing goal is to match costs and revenues, but the cooperative already has a strong balance sheet.Previously reported year-over-year operating revenues increased 4.7% to $6.7 million and year-over-year net income increased 30% increase $2.75 million.

According to Rich Clubine’s owner, active energy solarRich, a solar installation company in HCE’s service area, used a 6.4 kW, 1,500 square foot home.DC Taking a photovoltaic system as an example, this tariff change would increase the annual electricity bill from $152.88 to $950.13 by more than 600%.

In addition to potentially making the economics of residential solar installations unattractive or unfeasible, price changes have a particularly negative impact on low-income households. According to the Colorado Solar & Storage Association (Cossa), “When fully implemented in 2025, the focus will be on small homes and townhomes/condominiums. increase the amount billed In the range of 8-18%. Conversely, a larger home (4,500-6,000 sq ft) could reduce your bill by 5-17%. ”

This rate change could destroy the lives of people like Rich Clubine, and other employees as well. active energyAnd when this rate snowballs to other utilities, the jobs of the more than 9,000 Colorados employed in the solar industry could be at risk. Without clean energy jobs thriving in Colorado, especially solar and battery installers, reaching the 100% clean energy and electrification goals will be exponentially more difficult not just for HCE, but for the state as a whole. .

But the impact doesn’t stop there. It also puts nearly $500 million at risk. Federal funds from the Inflation Reduction Act (IRA) It aims to help 44,500 households within HCE’s service area transition to clean and electrified energy.

100% achieved by 2030

How will HCE reach 100% by 2030 without the help of its members? I am planning to build a At first glance, this looks like a good plan to help accelerate the transition to clean energy, but when clean energy hits grid parity, incentives and tax credits are injected from the IRA, and cooperatives shut out members. means that of the market to receive all economic benefits and financial management itself. The levelized cost of electricity (LCOE) for solar power is becoming economically viable for the middle class, and programs such as PPAs and community solar are opening the market further to lower- and middle-income customers. Likewise, HCE’s new pricing structure does just that. It is almost impossible for them to become power owners and producers themselves.

Holy Cross Energy has a precedent for good community stewardship and is active in the transition to clean energy. The rebate program is very progressive, offering a variety of energy efficiency and smart electrification rebates such as heat pumps, air sealing and insulation. This fee change is not consistent with cooperative traditions and may allow HCE to revisit and revise its plans to better serve the community and realize its core values.

Jessica Fishman is a marketing professional with nearly 20 years of progressive expertise, 10 of those in the clean energy industry. Passionate about tackling climate change by accelerating the transition to clean energy, she has worked with major renewable companies and numerous clean energy technologies, building marketing and communications departments.

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