Refunds on horizon for Colorado solar customers facing utility delays, after thousands waited months to connect to the power grid this year

In a state known for its sunshine, Colorado homeowners have been struggling to go solar this year.

The Colorado Public Utilities Commission found the utility company facing the majority of customer complaints over delays with solar interconnections was Xcel Energy.

Customers have been frustrated this year that it's taking months for Xcel to connect their pricey solar installations to the power grid. In fact, in January, Xcel admitted it had a backlog of 4,000 solar interconnection applications, according to public records filed with the PUC. 

Since February, there have been talks about possible reprieve for those Xcel customers. So, CBS News Colorado took a deep dive into the latest with the backlogs and where the proposed refunds stand. 

"We began 2023 with a massive influx of solar, homeowners who were interested in solar," explained Mike Kruger, President of the Colorado Solar and Storage Association, which has been a key player this year in championing legislation, and speaking out in administrative proceedings with the PUC, to hold monopoly utilities like Xcel accountable for delays.

Kruger explained one of the reasons for the delays dealt with meter upgrades that are required on a home when solar panels are installed. Kruger says Xcel had been behind on those installations, and customer service staff was "dreadfully understaffed."

"We started to see individuals who were waiting six, nine months," Kruger said. "The solar was ready to go, but the paperwork and the approvals hadn't been done."

The team leader for Xcel's solar programs in Colorado, Tyler Will, says the company was overwhelmed at the start of the year by the influx in solar panel interconnection requests. 

"So just the sheer amount of applications and our capacity to be able to process it at that time was a cause for those delays," Will said. 

Since then, he says Xcel has reduced the backlogs for meter installations, and solar customers can now expect to have their meters upgraded within 20-30 days. 

"We're going through these applications very quickly, and the majority, a very high percentage of customers, are going through this process with ease," Will said. 

He said the reason for the improvements comes after Xcel hired more staff and streamlined its systems for processing solar applications to work through those backlogs faster. 

"With the process improvements we have, and the added resources, we're prepared for these types of increases," Will said. "Part of our process is having daily operation reviews where we're constantly monitoring these volumes, and being prepared for those influx of applications, so we've become able to react a lot more quickly when those surges occur."

Kruger agrees Xcel has made improvements since the start of 2023, following the implementation of a new bill passed in the last session that institutes fines of up to $2,000 a day for utilities who leave customers experiencing long solar delays.

However, another issue leading to delays in solar hookups is the outdated power grids in Colorado. 

CBS News Colorado spoke with a Lakewood resident, Matt Erskine, who has been waiting nearly eight months to turn on his $36,000 solar panels he installed on his roof last spring, because the transformer in his neighborhood needed upgrading to accommodate the demand it takes to push the solar energy back into the grid. 

"The roof panels up there, just sitting there looking pretty, I guess," Erskine said. "Xcel has infrastructure that couldn't handle our increase in solar for the neighborhood. Our house is probably 30 years old."

CBS News Colorado found many other older Colorado neighborhoods also aren't ready for solar. Click here to see if your neighborhood is ready. 

Xcel says right now, there are 156 solar customers waiting for transformer upgrades, a number the company says is lower than earlier this year.

"It is kind of ironic, like all this pushing to go green, to help out, get rid of the fossil fuels, or cut back on that, but then you can't do it," Erskine said. 

Despite Xcel's progress, supply chain shortages are still causing delays for transformer upgrades. Xcel says solar customers should expect a three to six month wait for those upgrades to take place. 

Erskine says if that's the case, customers should at least be warned of waits before they purchase panels. He says neither Xcel nor Sunrun -- the company who sold him these panels -- gave him any heads up before he signed on the dotted line. 

"I wish communication was a bigger thing," Erskine said. 

Asked about notifying customers about the delays, a spokesperson for Sunrun said:

 "Our sales, installation, and experience teams work closely together to provide customers with updated project timelines and to give them advance warning of any potential delays. We identify potential delays based on the hosting map that Xcel has shared with us. The accuracy is dependent on Xcel updating the map, but it does give us an idea of what the feeders look like for the area where a customer lives. Specifically in Weld and Arapahoe counties, we now wait on the full interconnection pre-approval before submitting permits to avoid future delays."

Xcel says it's training solar companies to make sure they're getting that message out to customers upfront.

Erskine's transformer was finally upgraded earlier this month, but then he was told it would take another month and a half for his new meter to be installed, but just one day after CBS News Colorado inquired about his case, Xcel sent someone out to change the meter.

Now he says Sunrun tells him they're waiting on Xcel to give them the green light before his panels can start soaking up the sun, so still, he waits.

"It's disheartening, very frustrating," Erskine said. 

In the meantime, documents show the state is requiring Xcel to implement a refund policy to pay customers back if delays continue, and that refund policy should be approved in a PUC hearing scheduled for Friday, December 8.

However, sources say it's unlikely those refunds will be retroactive for customers like Erskine.

"I'd like to see that energy bill dwindled down to nothing or near nothing, then I'll push how great solar is," he said. 

Christopher Worley, Director of Policy at Sunrun, issued the following written statements to CBS News Colorado for this report:

"Sunrun works hard to ensure the best customer experience possible for those who choose to go solar. While Sunrun has no control over utility equipment and interconnection delays, we support solutions to remove obstacles that have been delaying solar interconnections for many households in Colorado. For example, earlier this year, the Colorado Public Utilities Commission required Xcel Energy to publish solar interconnection timelines and fees and then refund customers if they failed to meet deadlines. Sunrun will continue working with stakeholders and utilities to address interconnection challenges in order to ensure the best possible solar experience for Coloradans."