Doubling your electric rates because you have solar panels

Pratt on TexasA story about El Paso Electric ratepayers with home solar panels I covered earlier this summer has an update. FuelFix reports:

Earlier this year, El Paso Electric… announced that it wanted to separate 2,800 customers with rooftop solar into their own rate class. The new rates could raise bills for those customers by as much as 100 percent.

Consumer and clean energy advocates have protested the increase as unfairly targeting solar power users. But El Paso maintains it needs to make up for lost revenue — around $800 to $1,000 annually per each customer with solar power.

The settlement, between the utility and the city of El Paso, will still be subject to approval by the Public Utility Commission.

As rooftop solar becomes more popular in Texas, the issue of how to charge solar customers is likely to persist. The problem, utilities argue, is they have fixed costs to provide transmission, and power generated by rooftop solar systems cuts into the revenues they need to keep their systems reliable. If solar users want to be able to tap that transmission system when the sun is not out, they need to pay rates that allow utilities to maintain their lines, the companies argue.

This happening is absurd and yet likely surprising for those who trumpet self-solar-generation as a wonderful social positive.

Ratepayers pay a flat meter charge whether they use any of a utility’s commodity or not and that fee is supposed to largely cover the fixed infrastructure costs. Thus El Paso Electric should be told to go fly a kite – preferably near high voltage lines.

The surprise for green-friendly liberals is that indeed the move to self-generation will eventually raise rates for all as regulated utilities collect fewer commodity delivery fees. These higher rates will likely hit low-income people the most as few of them are in a position to deploy, or afford, the installation of solar or other self-generation systems.

The same unintended consequence will exist on the large-scale utility end too. As solar and wind providers get government subsidies they sell power to grid operators below cost which reduces the financial viability of more robust and dependable generators to build and operate power plants.

No matter how popular, there are always counter-forces at work and unintended consequences.


  1. Dennis Howard says:

    I am a huge proponent of self sufficiency. I believe that anything you can do to lessen your dependency on the “grid” puts you a step ahead. Big government proponents on both sides of the aisle never want to see anyone step back from the trough. Government has only two ways to control the population; enact laws in such a way that everyone becomes a criminal at some level, and make the population so dependent on government for the basic necessities of life that there is no alternative but to do as the government requires to keep the basic necessities flowing. Consequently, big government hand in hand with the utility providers will do anything necessary to maintain that kind of control. Being independent and self sufficient is the definition of freedom. Free men are dangerous.

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