Wall Street Journal questions solar subsidies, calls for net-metering reform

August 31, 2015

On its editorial page today, The Wall Street Journal casts a critical eye at the rooftop solar leasing business model and government-backed subsidies the industry currently receives.

The editorial (subscription required) says that while President Obama and solar boosters continue to paint a rosy picture for the industry, “the bigger story is that the government-inflated solar bubble could pop if subsidies shrink.”

Those subsidies include the 30-percent federal investment tax credit for solar projects, set to expire at the end of 2016, and net-metering policies now established in 44 states. “Maybe the biggest risk to solar profits is that many states are considering revising their net-metering policies, which are a key profit driver for the solar industry,” the Journal says.

The editorial goes on to explain that solar customers who rely on the grid avoid costs for transmission, delivery and grid maintenance when they sell excess energy back to utilities at retail rates required by net metering. The avoided costs then are shifted to other customers who pay more to make up the difference.

APS is currently seeking to address this issue for customers by proposing to adjust the grid access charge for future solar customers.