Non-solar users may be subsidizing customers using rooftop solar panels, including large commercial operations.

 KOROR, Palau (May 16, 2025) — The Palau Public Utilities Corporation (PPUC) is not making money from people using rooftop solar panels, and it wants the law to change.

In a letter sent on May 13 to Senator Mark Rudimch, who chairs the Senate Committee on Ways & Means, PPUC Chairman Sam Belechel explained that the utility can’t collect enough money to cover its costs because of the current net metering law.

Net metering allows homes, businesses, and government buildings with solar panels to send extra power back to the grid in exchange for credit on their electric bills. But PPUC says it doesn’t earn enough from these customers to pay for maintaining the electric system, because solar users only pay for the power they take from the grid—not for the power they generate and use themselves.

“Our solar customers don’t pay the base rate that helps cover our operating and maintenance costs,” PPUC said in its letter. “So we’re not recovering those costs.”

The Senate had asked PPUC to explain how much money it is losing and whether non-solar customers are covering the difference. PPUC said it couldn’t give an exact number because its meters only track the extra power sent to the grid, not how much solar power is used on-site. But it agreed that the system is unfair and said the law should be updated.

The Senate also noted that solar use could already be costing PPUC more than $4 million a year in lost revenue. PPUC didn’t confirm that number, saying it depends on many factors, like the size of the solar (PV)systems, load demand, and other factors.  Information provided by PPUC showed that PV systems (this does not include the independent solar plant) generated about 6.5 megawatt and nearly half of that was from commercial customers, 3.003 megawatt.

When asked if regular customers are paying more because of solar users, PPUC said those costs aren’t added directly to other people’s bills—but because solar users avoid some charges, PPUC ends up with less money to run the system.  While affirming that non-solar customers are not directly charged to offset these losses, PPUC implied that the imbalance effectively shifts the cost burden, raising equity concerns.

PPUC also confirmed it is not buying power from rooftop solar vendors, and it is still not following a new law that requires power bills to show separate charges for fuel, solar, and other power sources. PPUC said it needs a software update to do that and is waiting for a programmer to help.

When asked if the Board approved this delay, PPUC said the Board knows about the problem and is working with management to fix it.

PPUC said it has tried for years to change the Net Metering Act and believes it may no longer be working for Palau. “We are trying to meet renewable energy goals, but the law may be outdated,” the utility said, asking lawmakers to support changes.