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Net Metering Q&A

Net Metering Q&A

Following are answers to some commonly asked questions about solar energy.

Q: What is at the heart of the net metering controversy?

A: When the rooftop solar energy was in its infancy, there was a common agreement that homeowners should be given incentives to invest in rooftop panels as a way to get the industry off the ground. After all, rooftop panels are an expensive proposition. We were in agreement and worked with all parties to develop incentives that were appropriate for that time. But times have changed. The rooftop panel industry has taken root – an unquestionably positive result. As the industry has grown, though, the hidden subsidy that is part of net metering shifts the costs to maintain the electricity grid away from solar panel owners to non-solar energy customers – even though solar panel owners still regularly use the grid.

Q: Why does Xcel Energy claim the current net metering policy is unsustainable?

A: Right now it may appear as if relieving solar panel owners of costs associated with their use of the grid is a small price to pay to expand solar panel installations in Colorado homes. But consider this – under the current net metering policy, if rooftop panels were installed on 1 million Colorado homes, the remaining homes would be expected to pay the entire cost for maintaining the grid that all homes use. Xcel Energy believes solar panel users should be fairly compensated for the energy they put back onto the grid for distribution – an amount that will be determined by the Public Utilities Commission. But we also believe they should pay their fair share for their use of the grid, whether it’s to receive electricity on days when the sun doesn’t shine or to use the grid to distribute the energy they sell back into the system.

Q: Xcel Energy claims it is ahead of schedule in its commitment to renewables, including solar – so why are you being criticized by the solar industry?

A: We are not being criticized by the entire solar industry.  Xcel Energy is a central part of the solar industry and a leading proponent of solar energy use in the United States. The company is currently the 5th largest solar provider in the nation among utilities and in Colorado, we’re proposing to add 170 megawatts of solar to our system, enough to power 58,000 homes. We’re also the leading wind energy provider in the United States. We continue to invest in renewables as a vital part of the clean, reliable energy mix we provide customers.  The criticism is coming from those in the industry who have marketed their offerings based on net metering subsidies.  If net metering changes, they worry they will lose revenue.

Q: What organizations are behind the criticism and how does what they want differ from what Xcel Energy wants?

A: To the extent we’re being criticized for our position on net metering, it’s being led by a group of companies in the solar industry companies that see the current policy as a stimulant for their businesses. It’s understandable -- they want to protect and grow their bottom line. But at Xcel Energy, we need to consider the policy’s impact on all energy customers, solar and non-solar alike. We also recognize rooftop solar panels are by far the most expensive way to access solar energy and we will serve our customers most effectively when we develop large-scale systems that can offer more solar to the greatest number of people at a far more affordable price.

Q: Xcel Energy is asking for more transparency in net metering calculations – what changes do you expect that transparency to lead to?

A: Transparency simply means that policymakers take into full consideration the incentives solar panel owners currently receive, along with the unsustainable consequence of the subsidy. We believe it should lead to changes in net metering policy that still fairly compensate solar panel owners for the energy they sell onto the grid, while having them pay their fair share for that same grid. We also hope it elevates the discussion about the efficiency and cost-effectiveness of the full spectrum of solar options in ways that make solar energy more affordable and more accessible to Colorado residents.

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