This fact sheet summarizes our recent research into an emerging business model: utility ownership of rooftop solar PV systems.

1. THE UTILITY-OWNED SOLAR PROGRAM DEBATE
Lower Customer
Barriers
Utility
Monoply
Not
Cost-Effective
Customer Adds
Grid Value
Utility Adds
Grid Value
Reduce Soft
Costs
$$$ $
Utility-Owned Solar Program Debate
FAVOR OPPOSED
COST
FAIRNESS
Is utility ownership unfair to solar
companies and violate anti-trust laws?
COST
Can a utility-owned solar program
truly be cost effective?
VALUE Is utility ownership necessary to
maximize the value of solar?
ROOFTOP SOLAR GROWTH IS CREATING
CHALLENGES FOR UTILITIES
With the recent unprecedented growth in customer-
sited solar photovoltaics (PV), forecasters expect
increased challenges for electric utilities — including grid
constraints and reduced revenues. To mitigate these
issues, regulated utilities are considering a wide range
of strategies, such as rate restructuring, changes in net
metering, and “value of solar” tariffs.
Another possible strategy has been the subject of
considerable debate: regulated utility-owned customer-
sited solar (RUCS). While some utilities have successfully
petitioned their state regulators for rate-based RUCS
programs in the U.S., historically there have been very
few. The first two (SMUD, LADWP) were established in
the 1990’s and since then there have been only five
additional programs (SCE, Duke Energy, Dominion, TEP,
APS) offered offered across the country. These programs
have had varying levels of success, yet serve as valuable
case studies for today’s solar and electric industries.
FUELING THE DEBATE:
FAIRNESS, COST & VALUE
EMI Consulting conducted an extensive review of
available literature and held discussions with key
stakeholders to assess industry perspectives and
explore current trends in RUCS. Research indicates the
debate centers on three key questions:
Utilities have been granted monopoly
status and have unfair advantages
Utilities can provide greater customer
choice and reduce barriers to
solar adoption
Utilities can reduce soft costs,
manage revenue loss better,
and may earn a rate of return
on solar
Regulators may not consider rooftop
solar to be the least cost option
compared to other larger scale
deployments
Utilities are best suited to manage
and add value for grid support
Customers are best suited to manage and
add value for grid support if compensated
appropriately
OPPOSEDIN FAVOR
Source: EMI Consulting, 2015
states allow regulated
utilites to own
customer-sited solar
homes and businesses with solar;
one third installed in 2014 alone
questions are
central to the
controversy35 600,000
Tech Insight:
Utility Ownership of Rooftop Solar

2. LIMITATIONS & LEGAL QUESTIONS
To date, regulators have limited the scope of RUCS
programs to either serve low-income and less credit
worthy customers or to provide electric grid benefits.
In many states, neither state legislators nor public
utility commissions have addressed the regulatory
status of RUCS, and the legal status remains unknown
or unspecified.
States in which third-party owners participate in the
solar market could potentially become regulatory
battlegrounds. As more utilities consider this business
model, it is likely that this topic will pervade regulatory
proceedings.
HOW SHOULD UTITILITIES, REGULATORS &
THE SOLAR INDUSTRY PROCEED?
As the number of distributed solar installations
increases, so will the national conversation
surrounding RUCS. There are valid points from both
perspectives regarding regulated utilities developing
customer-sited solar programs. EMI Consulting found
there is limited information regarding the true costs
and benefits of pursuing this business model.
Moving forward, utilities and policymakers alike will
need to fully comprehend the implications on fairness,
cost, and value resulting from the RUCS model. A
better understanding of the regulatory, political, and
market conditions of RUCS is critical to determine
if ownership of rooftop solar is an economical and
justifiable resource to explore.
For more information on how EMI Consulting can help bring clarity on this or other issues, please contact us.
*Refers to regulated utilities only. Some states have public or municipal utilities with utility-owned customer-sited solar programs.
CURRENT U.S. REGULATORY LANDSCAPE
FOR UTILITY-OWNED SOLAR
Copyright © Free Vector Maps.com
Ownership Allowed
Ownership Not Allowed
Status Unknown/Unspecified*
Pending Legislation
TPO Allowed
TPO not Allowed
Source: EMI Consulting, 2015
www.emiconsulting.com(206) 621-1160 info@emiconsulting.com 83 Columbia Street, Suite 400 Seattle, WA 98104
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