House Natural Resources and Energy Chair Jim Gooch is pushing legislation to update Kentucky’s private solar energy policy to ensure costs remain fair for all energy consumers in the state.
Rep. Gooch explained the current law requires utility companies to pay certain private solar energy customers for any excess electricity they feed onto the energy grid at a rate that’s higher than utilities pay for other energy sources.
It’s common for private solar customers to produce excess solar power at certain times of the year or day, and requiring utilities to take that excess power provides a benefit to these customers. Private solar customers also rely on the utility’s energy grid when the sun isn’t shining.
The issue, Rep. Gooch said, is the price being paid to private solar customers for that excess power which is about three times what the energy is worth. The utility company is required to pay this escalated rate which needs to be corrected, according to Gooch.
“We are having [utility companies] pay the same price back to [solar users] that they charge when they are selling electricity. And that is about three times what the value of that generated [solar] electricity is. A solar panel is an electricity generator. But when the utility company sells you power, they are selling you more than just the cost of generation,” Gooch said, adding that factors like the cost of distribution, labor, maintaining the energy grid, and others are not incurred by private solar producers but they are being paid at a rate as if they were incurring these costs.
Gooch said he believes there is “no question” solar energy has a place in Kentucky and added HB 227 will not hinder solar energy.
“I think for businesses out there that can make the case that this is a form of electricity that they can use and generate at their businesses or their homes to make savings, I think that is a really good thing. And I believe that with this bill, they will be able to continue to do that,” Rep. Gooch said.
The legislation would continue to require the utility to pay for excess power generated by private solar customers while ensuring all customers pay their fair share of use of the energy grid.
House Bill 227 is important to Kentucky’s business community as the state’s reliable, low-cost energy is a big incentive for companies to come to the Commonwealth and the current law could be a deterrent as all consumers, including businesses, are currently required to unfairly subside private solar customers, according to Gooch.