Alabama Power’s charge on solar: 5 years of stunting solar growth

Residents in Alabama pay the second highest residential electric bills in the country, over $1,700, on average, each year. Energy efficiency investments and rooftop solar power are among the only ways families can lower their electric bills and decrease the amount of energy they buy from Alabama Power.

Five years ago, Alabama Power essentially killed off rooftop solar in the state by imposing a solar charge on customers that claws back at least 50 percent of savings homeowners would see over the lifetime of their rooftop solar system. This unjustified, unfair fee applies to customers who install and use solar panels to power some of their energy needs at their homes, businesses, and schools.

It’s akin to going to the grocery store and getting an extra tax on your bill because you have a tomato garden in your backyard. Alabama Power has a monopoly. Solar is one of the few ways that people can actually control their electricity bills.

Katie Ottenweller, senior attorney and leader of SELC’s Solar Initiative

Alabama Power’s charges are based on the size of a homeowner’s solar system, and is added to other fixed and variable charges that these customers continue to pay each month to Alabama Power.

While other Southern states like North Carolina and Georgia have seen a solar power boom over the past five years, Alabama continues to lag behind. In much of the country, the unprecedented growth of the solar industry in recent years has resulted in significant energy savings and lower monthly bills for consumers, while creating thousands of local jobs. Across the country, the solar industry is adding workers at 12 times the rate of the rest of the economy—but that’s not the case in Alabama.

Alabama Power’s charges put a huge dent in customers’ return-on-investment in a residential solar system; essentially cutting by almost half the savings that homeowners would otherwise receive from going solar. Implementing these restrictions on energy choices and removing any incentive for residents and businesses to invest in solar has halted the growth of Alabama’s solar market.

Other Southern states are enacting policies that clear the way for homegrown clean energy investments, providing savings for homeowners and new job opportunities in solar, an industry that is growing 17 times faster than the U.S. economy.

Alabama Power claims the fee is necessary to serve solar customers. But a charge of this magnitude is clearly not based on Alabama Power’s actual cost to serve customers with solar, rather it’s an attempt to protect future company profits by stifling competition from solar.

It is no secret that utilities view solar as a threat to their traditional business model. However, that is the nature of market competition which, unless thwarted by monopolies, results in lower costs and more choice for consumers.

Alabama Power should not be allowed to punish customers who choose to reduce their electricity purchases on their own properties. Alabama Power’s actions demonstrate that it feels entitled to sell you a certain amount of its product — an abuse of its monopoly power that infringes on the property rights of all customers.

It’s time to put Alabamians before Alabama Power. By removing Alabama Power’s solar charges, Alabama can begin to realize its true clean energy potential and the economic growth, bill relief, and energy choice that come with it.