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Xcel pays Colorado solar homeowners 8 cents for their extra electricity. Then charges neighbors 17 cents to use it.

Home solar producers won’t benefit from the utility’s new time-of-use rates until late next year at the earliest, missing two summers of generation.

Solar panels are seen on the house of Sloan Lake resident Paul Aldretti on July 14, 2022. (Olivia Sun, The Colorado Sun via Report for America)
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Paul Aldretti loves to walk his shady neighborhood of Sloan’s Lake on a hot afternoon.

But as the clock nears 3 p.m. and the July sun bakes at a maximum, his mind wanders to his second-story roof, where his grid-connected solar panels are pushing more electricity out to Xcel Energy than his home appliances are sucking down. He heads inside to check his spreadsheets on a computer screen. 

Yes, indeed. Peak time rates for Xcel have kicked in, and the big utility is charging regular homeowners a few blocks away 17 cents a kilowatt hour in base rates to power their air conditioning and fans. 

But they’re only paying Aldretti 8 cents a kilowatt hour to buy his extra solar power. 

“I have these kind of ‘what-the-heck’ moments,” said Aldretti, replacing some words with off-peak profanities. “I’m doing all of the right things, but I’m not getting any of the benefits.”

Aldretti and more than 60,000 Colorado homeowners with solar panels on their roofs don’t yet have access to the smart meters that allow Xcel to charge — or give credits — at different peak or off-peak rates during the day under a system called “time of use,” a solar trade group says.

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Most solar owners will have to wait for full benefits until after Xcel installs smart meters for all the 1.5 million electric customers it serves, according to the Colorado Solar and Storage Association (COSSA). The solar trade group is furious at Xcel’s slow solar customer rollout of smart meters, which the customer and utility need to control and bill the new set of variable rates. 

Time of use encourages customers to use less electricity at peak times. Xcel said smart meter installation in Colorado started in late 2021, and is running at about 500,000 meters a year.

Sloan Lake resident Paul Aldretti tracks his solar panels’ energy consumption and output on July 14. (Olivia Sun, The Colorado Sun via Report for America)

Xcel in June told the solar association and regulators that it would have to push back its billing system for solar customers one more time, and that most of them would not come online with time-of-use smart meters until late 2023. That means two summers of generating credit losses for solar owners like Aldretti, the trade group says. 

The new delay is “unjustly discriminatory and shortchanges solar customers,” COSSA officials said. “Since 2016, Xcel has known this new rate was coming and expressly studied solar customers as a subgroup in early trials. There is no excuse for singling out this customer group and allowing such an extended delay.”

The group’s director of policy, Cathy Boies, has solar panels on her own home in central Denver.  Solar generators like Aldretti should be getting Xcel’s peak time credits at the same 17 cents a kilowatt hour that Denver residents with smart meters are paying. 

“Smart meters went in in my neighborhood about two months ago,” she said. “So my neighbor’s shiny new smart meter winks at me from my kitchen window.”

Xcel officials say they are working as fast as they can to install hundreds of thousands of smart meters every few months across the utility’s Colorado territory. They say a revolution in consumer control of their electrical bills doesn’t happen overnight, and that the net metering offered to solar customers — where they can both buy power and get credits for the extra power they generate for the grid — complicates billing systems.

It’s certainly possible to find solar customers who carefully trim energy use in afternoon peaks, generating more than they are using, and lose out on higher time-of-use credit rates for lack of a smart meter, said Jack Ihle, Xcel director of regulatory and strategic analysis,

But other solar customers with a different panel setup or facing different directions, Ihle noted, might be generating more at other times of the day, when Xcel is actually charging neighbors less than Xcel is paying the solar customer to put kilowatt hours back on the grid. 

“Many customers, or some customers, may not benefit in the same way” as a solar owner like Aldretti, Ihle said. “Very soon he will enjoy those time-of-use benefits. Solar systems usually last 20 years or so. And we’re talking one or two years of potentially waiting, depending on the customer.”

That’s unacceptable to the solar trade association. Solar industry officials said Xcel has been sharing its plans for distributing smart meters since at least 2016, and continues to miss targets for getting solar customers on board. 

“No one’s holding them accountable,” COSSA president Mike Kruger said. “There’s no feet to the fire, and they’re gonna rip off solar customers for two summers.” 

Net metered solar panels and Xcel’s smart meter program have many of the same goals. Colorado law mandates that 80% of electric utility carbon emissions be cut by 2030, from a 2005 baseline. The state’s utilities are switching from coal and natural gas to cleaner solar and wind generation. 

Encouraging homeowner-installed solar panels through net metering both lowers the amount of electricity they draw from the grid, and can boost clean energy to the grid at times of the day when solar panels generate excess power. 

Smart meters and time-of-use systems, meanwhile, help utilities avoid using fossil fuel backup plants to meet demand during peak hours, such as when customers get home from work on hot afternoons and flip on their air conditioning and ovens all at once. Xcel and regulators want to educate customers to shift optional electrical use to off-peak hours, such as starting dishwashers or charging electric cars, and to trade heavy duty electric oven use for countertop appliances. 

Shifting use to cheaper electricity hours — Xcel’s lowest overnight rate is nearly two-thirds lower than peak rates — also gives customers more control of their bills, particularly attractive in the high inflation era. 

Susan Nedell and her family lost their carefully designed house and beloved solar panels in the Marshall fire on Dec. 30, though they have plans now to rebuild as a certified passive home, with the goal of taking nothing from the grid. Before the fire, Nedell was always frustrated by Xcel’s “archaic” billing system for solar owners, including wasting money sending out tiny generation checks in early stages instead of crediting them online. 

Aldretti and Nedell both credit Xcel with extensive work on many climate change efforts that put it ahead of utilities in other states. Nedell, in writing an op-ed encouraging Marshall fire homeowners to rebuild green, has noted Xcel has thousands of dollars in rebates available for clean appliances and passive homes.

The delay of smart meters for so many solar customers is ridiculous, Nedell said, when they are the pioneers in seeking energy efficiency and climate responsibility for their homes.

“It’s certainly helping Xcel to have power coming from our house to our neighbors,” she said. “So we’re giving them benefits, and then we’re being shortchanged in the equation.” 


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