SANTA CLARA – A new policy governing residents’ use of solar power was approved Wednesday by the Santa Clara City Council at the council’s regular meeting.
The solar feed-in tariff policy changes the rate the city pays for solar power that residents feed into the system and increases the allowed solar capacity.
Currently, there are only a few homes with solar panels in Santa Clara, but that number is increasing and city officials have been working for months to put a system in place that is fair to all city residents.
Previously, residents were paid 8.5 cents for every kilowatt-hour their solar systems fed back into the city system. Under the new policy, residents will be paid 5 cents per kwh, Santa Clara Public Works Director Jack Taylor told the council.
Although the price of electricity can vary widely, 8.5 cents per kwh is roughly the retail rate, while 5 cents per kwh is the wholesale price the city pays, Taylor said.
This leaves a margin to cover the city’s fixed costs, such as substations, wires, transformers, maintenance and tree trimming. In addition, there is capacity built into the system which was paid for through bonds, and the city still has to make the bond payments.
“It’s to make sure that when we have a cloudy day or a rainy day, and their solar systems aren’t working, we still have to have the capacity,” Taylor said. “We still have to have the wire and the transformer that’s big enough to handle their load when their solar system doesn’t work; we still have to back that up.”
The new policy also increases the allowed capacity for residential solar installations from 10 kwh to 100 kwh capacity.
“They can put up as much as they want, as long as it’s not obtrusive,” Taylor said.
“The thing you have to realize about solar is, it’s great and we want it; we want the customers to put it on their homes,” Taylor said, but solar is not providing nearly what users need. Most solar users are not installing batteries, he said, and cannot store electricity.
“You’ve got to have the power, the muscle, to back that up,” Taylor said.
The new policy will compensate those that feed electricity back into the system, protect the utility system and make sure no costs are pushed onto customers that do not have solar installations.
“We don’t want to penalize those that can’t afford it,” Taylor said.
Most residents who are installing solar power are older, have bigger homes and are wealthier.
“We feel like it’s a win-win for everybody,” he said.
Shawn Alldredge, of Legend Solar, told the council there are better options available than the feed-in tariff, and that the policy, if passed, would double the length of time it takes homeowners to recoup their investments in power solar systems.
Alldredge said there are other, better options available to the city. One such option is a net metering policy, he said, where the customer only pays for the net power that they use in a month – what they actually use, less the amount they put back into the system.
Many such net metering systems impose a small monthly fee on residents with solar power, $5 or $10, Alldredge said, and this amount is enough to offset any risks to the city.
Mari Smith, a representative of the Southern Utah Home Builders Association, told the council she had not gotten a copy of the policy, and asked the council to postpone their decision.
However, the council said a copy of the policy had been sent to SUHBA, and that it had been discussed at length. The resolution implementing the feed-in tariff passed unanimously by a roll call vote.
The policy will be reevaluated by the city at least once a year to determine if power rates have changed enough to adjust the payment schedule for power generated by residents; and the council is open to making other changes or improvements in the policy over time.
How it works
The new policy goes into effect immediately, Taylor said. When a resident installs solar panels, the city will sign a contract with the homeowner to purchase any excess power produced.
An extra power meter will be installed by the city, at no cost to the homeowner, to measure electricity going back into the city system.
At the end of the month, residents will be credited on their power bills. For example, if a solar installation produced 1,000 kwh, the credit would be $50. An average-sized home in Santa Clara uses about 1,500 kwh hours per month, Taylor said.
If the home is sold, the agreement goes with the house and the city will honor it. The installation of solar panels requires a city permit and inspection, as would any changes made to a solar system.
The feed-in tariff policy applies to other alternative sources of energy, such as wind and geothermal.
City officials are always planning for future needs and population growth, Taylor said, and must bond for large projects.
Future projects include a gas generator near Veyo to be completed within the next year, which will harness heat from a Questar Gas high-pressure line and turn it into electricity.
Among other potential sources of power are additional natural gas generators and a planned nuclear plant in Idaho.
“We’re constantly trying to plan for our resources in the future,” Taylor said.
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