Editorial: Few ratepayers win in Avista’s solar lottery
Tue., June 2, 2015
Is it your time to shine? Enter an Avista Utilities lottery and find out.
Avista is the first investor-owned utility to launch a community solar project. Thirty Washington public utilities, Inland Power & Light Co. among them, have already put solar energy in the hands of property owners and renters who would not otherwise be able tap the sun for electricity.
Solar energy is a great resource that is becoming more cost competitive with other ways of generating electricity. The state has made it much more so by offering substantial incentives for the purchase of Washington-made solar panels and other equipment.
And utilities are required to pay very generously for the electricity that solar power generators, be they individuals or businesses, feed back onto their distribution systems. Home solar installations can pay for themselves in as little as five years, depending on where in the state they are located.
But if you are a renter, for example, you have not had access to those incentives. Soon, you might, but only if you are among the winners of a lottery Avista will conduct to distribute the 1,512 “subscriptions” it will offer at $1,400 apiece. The number of shares is determined by the maximum credit the utility can obtain against its state taxes.
Washington utilities last year received credits of more than $4 million against their state tax obligations.
For the utilities, it’s a zero-sum game: the money goes to the state or to ratepayers. But only the lucky ratepayers, because lottery winners truly are winners. Because of the incentives, those able to buy five-year “subscriptions” — the Washington credits expire June 30, 2020 — will net a profit on their participation of around $400 per panel.
That’s a not-too-shabby return on investment of about 28 percent over those five years, and winners will be able to subscribe for multiple panels; up to four for residences, eight for businesses.
So only an estimated 600 of Avista’s 240,000 electricity customers will benefit.
Inland’s program offered 900 units at $300, a price the cooperative set to keep them within reach of as many members as possible.
Inland, a cooperative owned by its members, knew early on that demand for its units would exceed supply, so it instituted the lottery systems that other utilities have copied. Demand exceeded available subscriptions by about seven to one. It will continue its program until 2034, even after the tax credits will have expired.
If they expire.
Several bills are still pending that would revamp Washington’s solar incentives. Among them are proposals that would reduce the payoffs to lottery winners, lower costs to the state and possibly allow companies that lease systems into Washington.
Like so much other business before the Legislature, a consensus behind one solar measure is unlikely. But a system that costs Washington taxpayers $4 million and rewards only a relatively few ratepayers/lottery winners cannot be the best way to spread sunshine.
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