Back in 2012, my family installed a new solar power system on our home. Federal tax credits coupled with Louisiana’s solar power tax credits meant we spent $5,000 out of pocket on the brand new system. At the time, we anticipated the system to pay for itself in about seven or eight years.
But this past August, our local electric utility company (Lafayette Utilities System, LUS) introduced an anti-solar power policy with no public input that is effectively a tax on solar power systems. The new rate structure for current net metered customers, including solar power families like mine, is also likely to almost double our monthly electric bills. And the new solar tax will likely double the payback time.
The new electric rates are so illogical that having solar panels in the months of August and September would actually be worse for my electric bill than not having solar panels – the same months when the utility most needs the power our solar system is producing. For my neighbors who might have been considering installing solar power, it is unlikely that new solar power systems would ever pay for themselves as a result of LUS’s new solar tax and the phase out of Louisiana’s solar tax credits.
This punitive rate structure came as a total shock to our family, right after the community experienced the historic, 1,000-year flooding that occurred in Louisiana. The same week that the flooding occurred, Lafayette Utilities System (LUS) introduced this extremely complicated electric, water and sewer rate increase .
Before the rate increase, all of Lafayette’s residential electric customers were usually charged a flat $6 monthly service fee, plus the cost of energy and fuel on a per kilowatt hour basis.
Starting on November 1st, LUS begins implementing a rate structure that discriminates against solar customers. The new rate plan will result in a $7 monthly service fee for all residential customers, and energy rates will increase by 9% (from 4.01 cents per kWh to 4.371 cents per kWh). Solar families, however, will see an $11.31 monthly service charge plus an additional $15.95 “wires” fee. The new net meter rate decreases the energy value to $0.038961/kWh, but this isn’t enough to overcome the additional solar tax.
LUS’s new solar tax is so high that it means that, in some months, it would be cheaper for my family to not have solar panel
s at all. I took the last 12 months of our electric bills and calculated what they would have been with the new LUS solar tax. Our bill under the old rate structure was $347 for the year. If we were a non-solar family, our annual electric cost would likely have been $706, so we saved $359, which helps us pay off the $5,000 cost of our system. But if LUS’s solar tax had been in effect last year, our power bill would have been $575. That $216 annual bill increase represents a 73% rate hike on my family. For August and September, the new solar tax means we will actually be paying a higher monthly power bill than if we did not have any solar panels on our home.
How’d this happen? The new electric, water and sewer rates were introduced as a 60 page ordinance at a 4:30PM public meeting, the same week as Louisiana’s historic, 1,000-year flood. In the media, the rate increase was simply billed as “Lafayette utility rates will increase 9 percent over the next three years,” without any mention of the exceptionally bad solar power policy. Twenty two days later, the rate was finalized and approved. Not a single member of the public came to any meeting to provide comment on the new solar tax.
Electric companies, their regulators, customers, and stakeholders all over the country are grappling with how to fairly compensate solar families. Some utilities have proposed outrageously high fixed charges on solar power users, but those efforts have generally been beaten back due to their highly unpopular status and woeful lacking of scientific support. As far as I can tell, LUS’s solar tax doesn’t even grandfather in existing systems like my own.
In related news, this past weekend, Tesla introduced its new solar power roof system and its battery Powerwall 2.0. The new sleek roof systems are aesthetically incredible, and likely to cost the same as a new roof plus the cost of energy. The roofs are designed to effectively outlive the house. The new Powerwall 2.0 doubles the amount of energy storage, and lowers the cost of storing power. As electric companies continue to increase electric rates, and penalize solar users, Tesla’s system (and many, many others like it) will be a tempting option for residents and homeowners to go off-grid.
I don’t know for certain exactly why LUS decided to request the new solar tax. But it’s a dark cloud hanging over new residential solar power development in the city. The local City/Parish Council should immediately rescind the new net metering rules. If LUS is interested in developing a new solar policy, those considerations need to be brought to light in a fair and public forum.
My next blog on this topic will likely either be “Lafayette restores smart solar policy” or “Living off-grid in Suburbia.” Stay tuned.