Idaho Power Proposes Massive Decrease in Rooftop Solar Compensation Rate

Advocates continue to raise alarm about unfair rate calculations

April 3, 2025

Boise, ID- Idaho Power has filed an applicationwith the Idaho Public Utilities Commission (PUC) to significantly decrease the compensation rates for the excess energy produced by rooftop solar owners, known as the Export Credit Rates (ECRs) in another attempt to hurt rooftop solar financial viability in Idaho as electricity rates continue to rise.

Idaho Power proposes a 60 percent drop from 6.18 cents per kilowatt-hour (which took effect in January 2024) to 2.46 cents on average annually. This is a 72 percent drop overall from the previous average compensation rate of 8.8 cents per kilowatt-hour in place for over a decade. The PUC is expected to make a decision in May before the new rates take effect on June 1.

"People in Idaho go solar because it lowers their power bills, gives them energy freedom and security, and helps the environment," said Alex McKinley, owner of the local small business Empowered Solar. "Idaho Power is trying to take that opportunity away from people by skewing these rooftop solar rates in its favor. It's not right."

If approved, the new rooftop solar ECRs will take effect on June 1, right before the peak summer season for solar energy production. This is all part of the utility's new "Net Billing" program, which was approvedby the PUC in December 2023 in the face of ongoing public backlash. The new program involves updating the ECRs every year, making it impossible for Idahoans to calculate a payback period on a rooftop solar investment, which discourages solar adoption.

"We invested heavily in solar for our property, looking forward to low power bills under net metering. Right after the installation, the PUC decided that Idaho Power could switch to net billing. Now we have a solar installation bill on top of a power bill, said Fred Johnson, a Marsing resident."They have completely removed the incentive for solar power."

Rates vary based on seasons and the market value of solar energy on the grid. From Oct 1- May 31, when there's not as much electric demand, Idaho Power pays solar owners less. Under this new proposal, rates would plummet 80 percent to less than 1 cent per kilowatt-hour for those 8 months out of the year. At the same time, the company will charge other customers at least 8 cents per kilowatt-hour for the same electricity to pad its profits (see this chart).

Idaho Power is using an internally produced "Value of Distributed Energy Resources Study" from 2022 as the basis of its annual ECR calculations. Sierra Club and other environmental groups hired an independent analyst that concludedIdaho Power is severely undervaluing rooftop solar's value by using selective data and calculation methods.

"How can our state regulators just let this happen? The PUC is supposed to double-check the utility's math to make sure Idaho ratepayers aren't being taken advantage of," said Lisa Young, Director of the Idaho Sierra Club."Distributed solar is worth morethan the retail electricity rate, not less. The PUC needs to stop turning its cheek on corrupted math and letting this monopoly utility pad its pockets even more."

"With changes at the federal level, it's more important than ever for local communities and individuals to be empowered to help transition our electric grid to cleaner energy sources," said Mike Engle, Chair of the Portneuf Resource Council based in Pocatello. "We need the PUC to help enable every Idahoan's right to generate their own clean power, not hinder it. This latest proposal from Idaho Power makes an already very bad deal for homeowners and businesses even much, much worse. The PUC needs to deny this request that dramatically decreases the solar export credit rate."

The proposed reduction in rates coincides with unpopular fixed-rate increases on customers. As of January 2025, Idaho Power customers are paying a $15 flat monthly fee, up from $5 several years ago. Fixed rates disproportionately impact lower-income people and discourage energy conservation and rooftop solar.

A public hearing date for the solar rates has not yet been announced. Members of the public can submit public comments at puc.idaho.gov/Form/CaseCommentand reference Case #IPC-E-25-15.

Read more about coalition organizations at their websites: Idaho Sierra Club, Portneuf Resource Council, Climate Action Coalition of the Wood River Valley, and Empowered Solar.

About the Sierra Club

The Sierra Club is America's largest and most influential grassroots environmental organization, with millions of members and supporters. In addition to protecting every person's right to get outdoors and access the healing power of nature, the Sierra Club works to promote clean energy, safeguard the health of our communities, protect wildlife, and preserve our remaining wild places through grassroots activism, public education, lobbying, and legal action. For more information, visit www.sierraclub.org.

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