Jon Miller is ready to move on from tariffs to a topic he thinks is even more important to the future of solar power in Oregon.
But about those tariffs….
“It isn’t a great outcome, but it isn’t as bad as what SolarWorld and Suniva originally wanted, and now it’s done and we’re going to live with it,” the executive director of the Oregon Solar Energy Industries Association said on Tuesday, as the dust began to settle on the Trump administration’s decision in the closely watched trade case.
Miller figures the tariffs — 30 percent initially, sliding down to 15 percent over four years — will boost solar prices perhaps 5 percent for residential installations, a bit more for commercial projects and around 10 percent at the utility-scale level, where panels make up a higher proportion of the total system cost.
That’s a far cry from the 15 percent to 30 percent price increases analysts talked about when the trade case began last spring. But in a region with relatively low electricity prices, Trump’s tariffs could still have an effect, especially at that utility-scale level.
“In the Northwest, we’re always on the razor’s edge in making those work,” Miller said. “Bump that price up by 10 percent, and an investor might hit ‘pause.’”
Then again, the federal investment tax credit for solar is scheduled to ratchet down beginning in 2020. Could that lead an investor to hit ‘play’?
“You’ve got a lot of levers interacting with each other,” Miller said.
That’s uncertainty that Miller can live with — unlike the unfolding case before the Public Utility Commission to determine a resource value of solar.
“If that doesn’t get fixed, we’re in deep trouble,” Miller said.
The RVOS, as it’s known in energy circles, will be used to determine how much utilities will pay for power from community solar projects, which OSEIA sees as a potentially big new market in the next several years. It also could become a factor in the determining what residential and commercial solar adopters get when they return power to the grid.
In December, OSEIA expressed its concerns about the initial numbers from Portland General Electric and Pacific Power — around 5 cents per kilowatt-hour, less than half the residential retail price electricity in Oregon. Since then, the group has hired a consultant to help it fight its case before the PUC.
“RVOS is not a temporary thing like tariffs,” Miller said. “It’s not going to go away. We know it’s not going to be 5 cents, but is it going to be 7 cents? If that happens, it kills community solar and could depress commercial and residential markets for years to come.”
OSEIA will submit testimony by Feb. 16 on the utilities’ initial filings, and several rounds of back and forth will follow, with a decision expected in July.
The utilities, who say they want to be sure their non-solar ratepayers aren’t left subsidizing solar development, have said they expect the RVOS to be refined in that process.
If it doesn’t rise substantially, Miller said the industry won’t stop with the PUC.