NEW ORLEANS, La. (WVUE) - If you’re thinking about getting solar panels on your home, you may not want to wait much longer -- new solar installs will get less money back from utility companies next year after a rule change voted in Wednesday (Sept. 11) by the Louisiana Public Service Commission.
In the sun-drenched south, people like Jean Vegas see the benefits of home solar panels.
“Before we had the solar panels it was like $135 a month," Vegas said.
The family installed solar about a year and a half ago and Vegas said they have seen a dramatic drop in their electricity bills. But, a new rule change may eat into that saving.
Louisiana’s five-member Public Service Commission voted 3-2 to change a rule that will allow utility companies to pay homeowners that produce excess solar energy the wholesale rate, instead of the current retail rate.
Thomas Neyhar is the CEO of Posigen, a company that provides solar services in Louisiana, and opposes the change.
“It was another win for the monopolies here in Louisiana," Neyhar said. "Entergy now is selling solar for retail, but they won’t pay more than 3.5 cents to the little old lady that over produces in the middle of the day. It’s not fair.”
Retail is between 10 and 11 cents per kilowatt.
The rule change could make adding solar panels like these less affordable for families, and opponents like Neyhart say this is a step backwards and will slow new install.
Neyhart referenced another change that reduced the value of solar installs in Louisiana a few year ago. He said,
“We had a very robust solar industry. They took away the tax credit and a number of solar companies, such as myself, stayed in the state, but we went from 180 solar companies to 18," Neyhart said.
Entergy Louisiana said this move balances the benefits to those with solar, against the interest of most of their customers, Entergy Louisiana representative Mike Burns explained in an email.
“For every $10 of your utility bill, about $6 to $7 are needed to cover fixed costs like poles, wires and power plants. The rest covers variable costs like fuel used to produce electricity at our plants," Burns wrote.
According to Entergy, with the current pricing structure, non-solar customers are picking up that cost.
“The commission’s decision today changes the estimated savings by less than $10 per month relative to the current rules. We do not believe this modest change in savings will suddenly discourage people from installing solar," Burns said.
But Neyhart said solar does benefit the whole grid.
“The more solar you have, the less you have to invest in the infrastructure," he said. “So, it’s a value for the system, it’s a value for the other rate payers."
Vegas said the change seems like the wrong decision.
“Entergy is a Fortune 500 company. They do not need to have decisions made in their favor. These are regular people out here who are struggling financially to try and pay their electricity bills among other things," she said.
While solar remains environmentally and financially advantageous, this change will drop the return on the homeowner’s investment in the sun.
Current users and those completing installations by Jan. 1, 2020 will be grandfathered into the retail rate for 15 years.
Entergy New Orleans customers will not be effected, as the utility is regulated by the New Orleans City Council.