Advanced Energy Perspectives

Fitch Report Sends Utilities Barking Up the Wrong Tree

Posted by Ryan Katofsky and Bob Keough

Aug 4, 2016 11:53:12 AM

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Fitch Ratings released a report last month analyzing the impact of rooftop solar and net metering on the creditworthiness of Investor Owned Utilities (IOUs), and the takeaway seems geared to raise alarm. In short, Fitch states that distributed solar, and especially net metering for solar owners, pose a risk to utilities’ financial stability and thus their ability to borrow at low interest rates. As discussed in a USA Today column, the Fitch report suggests that the best way for utilities to solve this problem is to recover more revenue through fixed charges and compensate rooftop solar owners for their excess generation at the lower avoided cost rate instead of retail, as is typically done under net metering.

While this may make a pithy message for investors, as guidance for utilities the Fitch advice is dubious. It seems to say the only way utilities can remain financially viable, and hold onto their rock-solid credit ratings, is to limit the options of their customers, ramp up charges that don’t correlate with usage, and discount the value of power contributed to the grid by customers. Instead, we would suggest that there are better ways for utilities and their regulators to look at the impacts of distributed generation on the electric power system. Utilities are responsible for maintaining a reliable, affordable electricity system, but this should not include punishing their customers who are availing themselves of new options for meeting their energy needs. It would make more sense for Fitch to point utilities, and their investors, toward more forward-looking solutions that make rooftop solar customers (and customers who invest in other forms of distributed energy resources) their partners, instead of their adversaries.

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Topics: State Policy Update, Energy Finance

Setting the PACE on Home Energy Improvements for Low and Moderate Income Americans

Posted by Bill Ritter, Jr.

Jul 21, 2016 12:34:34 PM

This is a guest post by former Colorado governor Bill Ritter, director of the Center for the New Energy Economy and an AEE Institute board member.

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The White House announcement yesterday on residential Property Assessed Clean Energy (PACE) is a welcome solution to a problem that has plagued states since 2010. It will go far toward helping all citizens, but especially those on a low and moderate income, to make efficiency improvements to their homes and lower their energy bills.

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Topics: Federal Policy Update, Guest Post, Energy Finance

Four Trends to Watch in Energy Finance

Posted by Dan Scripps

Jan 13, 2016 5:33:03 PM

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The changing of the calendar is a good time for lists. So far, we at Advanced Energy Economy have given you the Top Five State Policy Battles of 2015. Then there was our list of the Top 10 Advanced Energy News Stories of 2015 – in two parts! Looking ahead, we offered up our Top Federal Policy Areas to Watch. But we’re not done yet. Here are four topics in energy finance to keep an eye on in 2016 and beyond.

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Topics: Energy Finance

ENERGY FINANCE: White House Announcement Clears Up PACE; Tax Extenders Pass Senate Finance

Posted by Dan Scripps

Sep 1, 2015 11:47:08 AM

Energy-finance

The White House announcement last week, on the day of President Obama’s clean energy speech in Las Vegas, resolved two issues that have been dogging the Property Assessed Clean Energy (PACE) market over the past several years. Namely, it clarified how PACE loans could be paired with federally guaranteed mortgages, as well as how those loans could be transferred to new owners, rather than paid off, at the time of the property’s sale.

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Topics: Energy Finance

FINANCE: Residential PACE on the Rise; Innovative Solar Financing

Posted by Dan Scripps

Jun 24, 2015 5:03:09 PM

By Dan Scripps

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In 2010, the Federal Housing Finance Authority almost killed Property Assessed Clean Energy Programs (PACE) for residential properties. A lot can happen in five years, and what was once a program on the verge of foreclosure is now a booming market. Also, what a new financing model could mean for current solar consumers and producers.

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Topics: Energy Finance

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