Maine has hit an important solar juncture: Enough homeowners have installed solar panels on their roofs and enough community solar projects are in operation that the key policy that has encouraged so many solar panels is due for major revision.
The state will position itself well if it can strike the right balance between encouraging the growth of solar energy; recognizing distributed solar’s true value to the state, its ratepayers and the electric grid; and ensuring all utility customers share in the costs of maintaining the grid — even if some solar customers are less reliant on it.
Fortunately, a stakeholder group involving solar installers, the state’s utilities, current and potential solar customers, environmental groups and others have just completed some important work that has the chance of setting Maine on the right path toward the sun.
In a report submitted to lawmakers last week, the group indicated it has reached “substantial agreement” on a number of key solar policy goals:
— Adding 255 megawatts of solar capacity in Maine long-term (the state currently has 18.6 megawatts installed).
— Emphasizing a mix of small-scale residential solar installations, community solar projects, larger installations at commercial and industrial properties and “grid-scale” solar — commercial projects erected for the sole purpose of providing power to the grid, not offsetting customers’ electricity usage.
— Regular Maine Public Utilities Commission solicitations of solar power proposals so the PUC can enter into long-term power supply contracts with solar generators.
Where there’s far less agreement is on a future for net metering — the three-decade-old policy that allows utility customers with solar installations to collect bill credits for any excess power they produce and send back to the grid. (That’s the policy that, under state rules, is now due for revision because the capacity of net metering customers now accounts for 1 percent of peak electric demand in the area served by Central Maine Power Co.)
Solar installers have largely built a business on net metering. It’s a straightforward way for customers who install solar panels to eventually recoup the cost of their investment. But utilities say net metering customers can end up paying less than what it costs per customer to maintain the electric grid.
Net metering also is an imprecise way of compensating solar customers for the value of the energy they send to the grid. That’s because net metering customers receive bill credits based on current retail electricity rates, which reflect a mix of all energy sources, not the costs and benefits of solar energy specifically.
Last year, a group of consultants hired by the Maine PUC concluded that distributed solar power — small-scale solar installations located throughout the state — brings Maine benefits worth 33.7 cents per kilowatt hour (for most of the state, current electricity supply and distribution rates total about 13 cents per kilowatt hour). Those benefits come in the form of avoided costs for power from other sources, the avoided cost of transmission lines utilities don’t have to build since solar can ease pressure on the system at times of peak demand, and broader societal benefits from reliance on a clean energy source.
Working with a consultant last year, the office of Maine’s public advocate developed a net metering alternative that guided the stakeholder group’s discussions. Under the alternative, residential solar customers would receive a 20-year, guaranteed rate for excess power they sell to the grid. That rate would reflect the value of solar energy’s benefits to the electric grid. And the guaranteed rate would drop each year — offering a premium incentive for solar installations in the early years. Current solar customers would have the option of continuing with net metering — as they should as the state deploys a new way to pay for solar energy.
Solar stakeholder group members didn’t register objections to the design of the net metering alternative, but there’s little agreement on the particulars — such as the rate solar customers should receive for their excess power and the length of time that rate should be guaranteed.
Sorting out the particulars — along with decisions on setting long-term goals for solar and carving out a place for it in the state’s electric supply — now falls to the Maine Legislature.
Lawmakers — admittedly swimming uphill given Gov. Paul LePage’s disdain for solar energy — should adopt a value-based structure to pay for solar because it recognizes the benefits of a clean energy source that eases stress on the electric grid, encourages solar’s expansion and accounts for the costs of maintaining existing electric infrastructure.