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Utility Addresses Hidden Costs of Rooftop Solar

04/09/2013

As rooftop solar installations pop up in San Antonio, CPS Energy is refining the formula it uses to incorporate and pay for that power, taking into account the costs to maintain and upgrade its electric transmission and distribution systems in a way that is equitable for all customers.

To date, generous rebates and a net metering program from CPS Energy have led to almost a thousand rooftop solar installations in the utility’s Greater San Antonio service territory. But the current net metering program places a higher cost burden for infrastructure on customers without solar systems. To address the continued growth, CPS Energy is planning to launch SunCredit, a price-per-kWh that will reflect the annual average forecast market price of solar.

The change will not impact CPS Energy rebates for solar systems, which remain among the most generous in Texas and the U.S., but it will adjust the amount those customers are paid per kilowatt hour for the energy their systems produce. Currently, CPS Energy pays an average 9 cents per kWh, but that does not take into account the costs to maintain and expand other infrastructure. For 2013, the SunCredit is proposed at 5.6 cents per kWh.

“Costs to install photovoltaic systems continue to fall, making them increasingly available for more customers. And with that growth, the costs of the utility infrastructure are borne by fewer customers—those who don’t have solar systems,” explained Cris Eugster, executive vice president and chief strategy and technology officer. “To ensure that solar customers continue to enjoy the benefits of any distributed energy they produce, and pay a fair share of the infrastructure that they rely on, we’re taking a different approach. This is really important in San Antonio, where one quarter of the community’s residents are at or below the poverty level, and monthly energy bills absorb a larger portion of their monthly budgets.”

Under the new program, solar customers will be charged the normal monthly rate for any energy they use and receive the SunCredit for any energy they generate. Using CPS Energy’s current energy charges, a residential customer using the average 1100 kWh per month of electricity would pay April’s current rate of 9.9 cents for what they use, a total of $108.90. Assuming the customer’s solar system generated 870 kWh, the SunCredit of $48.72 would be applied, resulting in electric charges of $60.18 for the month. Previously, the customer would have off-set their retail rate of 9.9 cents for each kWh, which did not take into account the costs of infrastructure such as poles, wires, substations and more. That infrastructure delivers power when the customer’s system is not producing, at night or on cloudy days, and also delivers the power they generate to the grid.

The SunCredit is proposed to begin on November 1, and will be evaluated and adjusted annually to account for changing market prices for generation. Current solar customers and those who apply for interconnection prior to April 26 will be grandfathered to continue on the net metering program through 2023.

CPS Energy will host a public feedback session on May 3 and accept customer feedback on the proposed SunCredit program structure. The program will be finalized in early summer and implemented late in 2013.

For more information about the SunCredit program, visit cpsenergy.com or call the program office at 353-6229.





CPS Energy is the nation's largest municipally owned natural gas and electric company, providing service to approximately 741,000 electric and 331,000 natural gas customers in the Greater San Antonio area. The company offers the lowest rates among the top 10 largest U.S. cities, while ranking number one in wind-energy capacity among municipally owned systems and number one in Texas for solar generation.