The Montana Public Service Commission will decide in September whether to approve NorthWestern Energy’s application to purchase 11 hydroelectric dams from PPL Montana for $900 million.
Whether you think the purchase is wise, or not, your electric rates will go up if the purchase goes forward. Montana press reports that if the hydro purchase goes forward, NorthWestern’s electric rates will be “nearly the highest of any major electric utility in the region.”
If paying some of the highest electric rates in the region doesn’t sit well with you, and if you’re concerned that electric prices could go even higher in the future, you may be interested to know that there’s a viable option for taming your electric bills. It’s called solar.
After decades of hype, innovation and investment, rooftop solar energy is finally reaching economic competitiveness with the old centralized power generation that underpins our electric grid. The cost of solar energy has dropped 80 percent since 2007.
Today there are companies in Texas willing to install and maintain solar panels on a customer’s home at no upfront cost, if the homeowner agrees to buy the solar energy output for a price as little as 12 cents per kilowatt-hour. These contracts are typically only signed when customers are paying more for utility power than they would for solar.
For comparison, NorthWestern’s electric rate is likely to be more than 11 cents per kilowatt-hour if it acquires the hydro dams. That puts current solar contracts within economic striking distance of NorthWestern’s utility delivered electricity.
Buy your own system
Over the long run, utility rates tend to go up. Meanwhile, the cost of solar has been steadily declining for more than a decade and continues to drop. And the type of contract described above is just one particularly convenient way consumers are getting their hands on solar in other states. Owning a system outright is likely the only option currently available to Montanans right now. But if you can afford or finance the upfront costs of a solar array, owning is likely to return far more savings to a homeowner than a solar contract. It’s no longer a question of whether or not solar will save you money, it’s a question of how much it will save you, and how quickly.
This intrusion of choice and competition isn’t likely to be welcome news to NorthWestern, which makes money by selling electrons to consumers previously obligated to buy their energy or none at all. NorthWestern has, unsuccessfully, attempted to pull the rug out from solar homeowners before, most recently in the 2011 Legislature. We can hope we don’t see a return of those tactics in the 2015 Legislature.
Going forward, our Legislature should focus on ensuring that the competition to supply Montanans with energy is as level as possible, and that the benefits of solar are as widely accessible as possible. That means allowing utility customers without a roof suitable for solar, or apartment owners without a roof of their own, to be able to buy into a community solar project, and receive benefits according to how much of the project they own. This approach allows for the broadest number of people to take advantage of solar’s falling prices. It also allows projects to achieve better economics by being appropriately sited and sized.
Due to falling solar costs and rising electric rates, Montana’s rooftop solar industry is well positioned to grow. Policymakers should not shield the monopoly utility from the competition. Instead, they should give people more control and choice in purchasing energy by allowing customers to obtain for themselves what they value most: environmental responsibility, rate stability, cost savings, or self-sufficiency via rooftop solar.