Renewable energy vs. the electric grid - Solar, Wind and Land: Conflicts in Renewable Energy Development - page 165

Spain's experience with net metering and related programs aimed at
promoting renewable energy exemplifies the financial risks that such
programs can pose for conventional utilities. Spain was long lauded for
being near the forefront among the nations of the world in promoting
renewable energy development through net metering, feed-in tariffs and
other laws that subsidized renewables. The nation's laws were wildly
successful in incentivizing a rapid and dramatic increase in solar energy
installations within that country. As of April 2013, 54 percent of all
electricity generated in Spain came from renewables. 75
Unfortunately, this swift transition to sustainable energy proved to be
anything but sustainable. By May of 2013, Spain's “tariff deficit” under its
feed-in tariff program was roughly $34 billion and growing. 76 The quantity
of conventional electricity being sold to ratepayers in Spain was nowhere
near enough to cover the costs associated with financing and maintaining
its electric grid. By late 2013, the nation was mulling a tax on solar energy
users as a way of restoring financial solvency in its energy sector. 77 The
proposed tax would potentially apply retroactively even to individuals who
had purchased solar energy systems several years earlier. It would also make
owning solar energy systems less financially rewarding than reliance on
conventional electricity delivered via the nation's electric grid. 78 If adopted,
such policy changes would instantly convert Spain from one of the most
solar energy-friendly countries in the developed world to one of the least
supportive of solar energy technologies.
Because of their potential to threaten the financial stability of utilities, net
metering programs are beginning to stir controversy in the United States as
well. Utilities have already unsuccessfully challenged net metering policies
in the U.S. states of Idaho and Louisiana. 79 By mid-2013, the debate had
moved to the states of Arizona and California—the top two states for
total installed solar energy generating capacity. 80 Government officials
in California ultimately responded to this debate in October of 2013 by
authorizing utilities to charge solar users fees of up to $10 per month to
ensure that such users paid a fair share of the costs of maintaining the
electric grid. 81
In Arizona, a large utility company sought in late 2013 to weaken
the state's net metering programs and pursued state regulatory approval
to impose fees of $100 or more on solar users. 82 The utility argued that
its proposed changes were reasonable policy steps designed to ensure
that additional grid maintenance costs didn't fall on non-solar electricity
customers as solar energy installations increased over time. Not surpris-
ingly, solar industry advocates disagreed and characterized the changes as a
“tax on the solar energy industry” that would “effectively end the roof-top
solar market” in Arizona. 83 State regulators ultimately rejected the utility's
specific proposals but did vote to allow a monthly fee of $0.70 per kilowatt
of installed solar generating capacity on the electricity bills of customers
who installed solar energy systems after December 31, 2013. 84 Importantly,