Utility Incentive to Grow Utah’s Solar Industry by 600 Percent

By SARA BALDWIN

After nearly a decade of strategic collaboration, two regulatory dockets, more than 170 stakeholder comments, hundreds of hours of meetings, and a 6-inch regulatory archive binder, sunny Utah has made solar history. On Oct. 1, the Public Service Commission of Utah approved Rocky Mountain Power’s (RMP’s) request to offer a significantly expanded solar incentive program that will support 60 megawatts (MW) of distributed solar energy — that is more than six times the amount of solar photovoltaics (PV) currently installed statewide. It will generate enough energy to power 8,750 average Utah homes. RMP, an investor-owned utility, serves about 80 percent of Utah’s retail power customers.

Since 2003, the local energy nonprofit Utah Clean Energy (UCE) has championed the utility incentive program. UCE coordinated with nearly 200 government leaders, businesses and citizens to make the case for an expanded solar incentive program.

“It goes to show that persistence, collaboration and sound data carries the day,” said UCE Executive Director Sarah Wright. “We are thrilled to see this expanded program approved and broadly support- ed by so many diverse entities. Not only is this program beneficial for ratepayers and Utah’s economy, this program will attract new economic opportunities and support more energy choices for Utahns.”

Rebate Structure and Cost Breakdown

In addition to paving the way for a strong, stable solar market and new job growth in the state, the program is designed to provide a cost-effective resource for Rocky Mountain Power and Utah rate-payers. Absent a real renewable portfolio standard or solar carve-out, UCE and its allies spearheaded a novel approach to demonstrate that a utility-solar incentive program can be an economical energy resource. According to the Utility Cost Test (which Utah’s Commission adopted as the “threshold” cost-effectiveness test for distributed generation and efficiency programs), the solar incentive program is shown to have a benefit-to-cost ratio of 1.63 to 1 — in other words, for every $1 invested in the program, ratepayers can receive $1.63 in benefits. “We believe this approach has tremendous potential for other states and utilities,” said Wright. In essence, the solar incentive program functions in a similar fashion to demand-side management programs and energy- efficiency incentives in providing the utility with a low-cost energy resource to meet growing demand.

The program will provide approximately $50 million in rebate incentives for residential and non-residential projects built during the five-year program (2013–2017). This is more than 50 times the size of RMP’s previous five-year pilot utility-incentive program. Starting in 2013, the incentives range from $0.80 to $1.25 per AC watt, with incentives declining annually by $0.05 per watt. Residential and small commercial projects will receive up-front incentives, while larger non-residential projects will receive annualized payments over five years. The Utah Solar Incentive Program closed its capacity reservation applications on Jan. 28. Program details can be found in the table and at utahcleanenergy.org or rockymountainpower.net/env/nmcg/usip.html.

Sara Baldwin (sbaldwin@utahcleanenergy.org) is senior policy associate at Utah Clean Energy, a non-profit public-interest group working to accelerate the clean energy transformation in Utah and the West.