Solar customers may be credited less

City board members recently listened to a proposal to lower the credit electric customers with solar panels could receive for generating excess electricity.

Phil Stokes, electric director for Siloam Springs, discussed the proposed credit decrease and explained net metering during the Dec. 17 city board meeting. Stokes said net metering is the difference between what a solar panel is providing to a house and what the city’s electric system is providing to that same house. If a house generates more electricity than it uses on a bright sunny day, the excess is sent back into the city’s electrical system. However, on other days the residence may need to use electricity from the city to meet its needs.

Currently, the city purchases electricity from the Grand River Dam Authority (GRDA) for 2.5 cents per kilowatt hour and sells it to customers at 9.6 cents per kwh, according to Stokes. Solar customers who produce more

electricity than they use are credited the same 9.6 cents per kwh that they pay for the city’s electricity.

Under the new proposal, the city would pay solar customers 2.5 cents per kwh for the excess energy that they produce — the same rate the city pays GRDA for electricity. Solar customers would still be charged the normal rate of 9.6 cents per kwh when they need electricity from the city, Stokes said.

Stokes said one of his reasons for making the change is the concern customers without solar panels could have to subsidize those who have them in the future. The city is presently losing $2,000 a month in lost electricity sales — about 0.2% of it’s monthly electricity sales revenue — to the 30 customers who have solar panels, he said. No customers are currently getting paid from the city for the excess energy they produce, they are just receiving credits toward the cost of the city electricity they use, he said.

“If we don’t do this then we are going to have to raise our rates or change our rate structure because as these solar panels become more popular it could become a huge number, not only to GRDA, but to us as lost revenue,” Stokes said.

The city of Siloam Springs entered into a contract with GRDA to purchase electricity in October of 2007, according to an article in the Herald Leader published the same month. As part of the agreement, the city is allowed 12 million watts annually and customers are allowed 100,000 watts per residence, according to Stokes.

City Administrator Phillip Patterson said the city does not have an ordinance governing solar energy. He credited Stokes and the Arkansas Municipal League (AML) for looking at the numbers.

“I think where we are and what Phil’s (Stokes) been working on to propose is the best place to try to find that balance between what the rules say with GRDA, what the state allows us to do on the net metering side,” Patterson said.

Mayor John Mark Turner said tax incentives made solar panels popular in the past. Those tax incentives are gone so the price for panels will go back up, which will probably discourage some people from having solar panels installed, he said.

The proposal for decreasing the solar energy credit is expected to go before the board in February, Stokes said.