Oklahoma solar users could be in the shade when it comes to excess electricity generated from their photovoltaic panels.
Just ask Enid resident Kyle Clark. The Oklahoma Gas and Electric Co. customer spent about $50,000 to install 30 solar panels on his house. Lured by tax credits and the promise of lower electric bills, Clark wanted to be able to reverse his meter and push power back into the grid.
So Clark was surprised to see a $14 bill last May after he'd built up more than 1,400 kilowatt-hours of credits. The typical household uses about 1,100 kilowatt hours of electricity each month.
After making calls to OG&E and solar power experts, Clark found out Oklahoma doesn't allow customers to carry forward credits for excess power for more than one month. That's more limited than OG&E customers receive in Arkansas, which allows credits for what's called net metering up to one year.
“I watched those credits build up through winter,” Clark said. “I know it sounds cheap, but it's the principle of the thing.”
Net metering is available to all electric utility customers, although generation capacity must stay below 100 kilowatts. Most net metering customers use wind or solar, but it's also available for other types of renewable energy such as geothermal electric and biomass.
At a minimum, Oklahoma Corporation Commission rules for net metering allow credits to be built up until the end of the customer's monthly billing cycle. What to do with excess generation after that is left to the “management discretion” of utilities and cooperatives, said Brandy Wreath, director of the commission's public utility division.
Wreath said officials at the Corporation Commission are studying the rules surrounding net metering. He expects a report to be finished by the summer. Any changes likely would involve the Legislature.
“This is becoming more and more of an issue as the costs of solar and wind installations come down,” Wreath said.
Chris Gary, owner of Sun City Solar Energy in Oklahoma City, said the typical customer spends between $8,000 and $12,000 to install solar panels. Energy savings and tax credits for renewable power can mean the investment pays for itself in six or seven years, Gary said. Depending on home energy use, customers can cut their monthly electric bills by more than half.
As the cost of solar panels and equipment comes down, so have the installation costs, Gary said. Five years ago, the average cost per watt installed was about $13.50. Today, it's between $4.50 and $5.50 per watt. A typical residential solar panel can generate 225 watts of electricity, enough to power a window fan or 42-inch LCD TV.
“Solar power is really taking off in Oklahoma,” Gary said. “Five years ago, nobody really cared.”
Still, the numbers of customers signed up for net metering is small. OG&E has about 100 customers signed up for net metering, while Tulsa-based Public Service Co. of Oklahoma has 69, utility spokesmen said. Combined, OG&E and PSO have more than 1.2 million customers in the state.
Chris Meyers, general manager of the Oklahoma Association of Electric Cooperatives, said most of the state's co-ops fall outside of Corporation Commission jurisdiction. But they tend to have similar rules for net metering.
OG&E spokesman Brian Alford said the utility prefers Oklahoma's method for dealing with excess net metering credits. Arkansas law requires credits roll over for up to one year.
“We believe the methodology in Oklahoma is more appropriate,” Alford said. “It keeps the credits closer to the actual consumption.”
Alford said carrying credits longer than a month can create subsidy issues for other customers. He compared it to buying a beach ball in January when prices are low, then returning it to the store in summer when prices are higher and expecting a full-price refund.
Clark, who has more panels than the typical solar power user, said customers like himself are helping utilities during peak hours by not putting extra stress on the grid. He just wants to keep the credit for the excess power he generates.
“This doesn't seem like it's that complicated,” Clark said. “With the sun at full strength, these solar panels are running like they're on fire. I'm giving them electricity during the peak times.”
In a January report, the trade group Edison Electrical Institute included generation from residential wind or solar power as one of the potential “game changers” to the electric utility industry.
The institute said such distributed generation takes away about 1 percent of the demand for electricity nationwide, but that share is expected to grow as the costs come down.
“While tariff restructuring can be used to mitigate lost revenues, the longer-term threat of fully exiting from the grid (or customers solely using the electric grid for backup purposes) raises the potential for irreparable damages to revenues and growth prospects,” the report said. “This suggests that an old-line industry with 30-year cost recovery of investment is vulnerable to cost-recovery threats from disruptive forces.”