Cross-subsidy for Northwestern Energy residential solar customers

An increasing number of residential customers are installing solar PV panels on their roofs. Installing these panels leads to dramatic reductions in both the customers’ energy consumption and power bills; however, the fixed cost of serving them does not drop proportionately, which creates a cross-subsidy between customers. Dr. Faruqui analyzed Northwestern Energy’s proposal to remediate the cross-subsidy and restore equity between customers, and benchmarked the proposal against best industry practices.