January 20, 2018
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Why money is the real power in Maine’s solar energy debate

By Darren Fishell, BDN Staff
Updated:
BDN file | BDN
BDN file | BDN
A herring gull perches near solar panels on the roof of Becky's Diner in Portland on May 27, 2014.

At least 2,000 Maine homeowners have sunk thousands of dollars into solar power arrays. Part of their calculation in making the purchase is the ability to sell excess power back to the grid, called net metering.

That means their electricity meters can reverse during times when their system generates more power than they use at home. The power companies give them bill credits for it, and the savings help solar customers recover the cost of the equipment faster.

It’s only fair that they get paid something for their power, right? But the question is how much.

Maine’s now taking on a debate playing out across the country over how to value that power, how to adapt the simplistic incentive of net metering to a maturing market, and whether it’s fair to change the game on existing customers.

(For the basics on net metering, and how it affects everyone’s power bill, read this.)

The stakes for solar in Maine are small, but growing.

A report issued last week by Environment Maine shows that solar capacity in Maine lags much of the country and the region. But it’s clear that the industry’s momentum is at stake.

According to estimates from the U.S. Energy Information Administration, Maine’s small-scale solar capacity rose 63 percent in the last year, compared with about 42 percent across New England. Only Rhode Island had a lower estimate of small solar capacity, at about 11 megawatts, to Maine’s 16.1 megawatts.

Maine outpaced the region and country for the amount of solar it generated in the past year, although the state’s relatively low capacity makes it easier to grow quickly.

After a law to replace net metering with new incentives failed, solar installers say keeping net metering is crucial to maintaining that growth.

Some say net metering customers are paid too little.

One study, updated last week, showed that a solar installation generating power for 25 years would deliver a value of 27.2 cents per kilowatt-hour back to the grid. That includes all of the avoided costs of building transmission lines and the environmental benefits of reducing emissions.

Maine solar installer ReVision Energy argued that net metered solar customers are actually getting paid too little, with residential customers getting around 13 cents per kilowatt-hour and small commercial customers getting less than 12 cents per kilowatt-hour.

In comments to the PUC, ReVision Energy wrote that net metering “is not perfect, but it provides ‘ rough justice‘” for the value small solar generators provide to the grid.

Others argue that net metering customers are paid too much.

Prices for solar installations continue to fall, but they still cost the typical homeowner more than $15,000. Not everyone can afford that.

The Dirigo Electric Cooperative criticized net metering as “a reverse Robin Hood program, taking from those who cannot afford self-generation to give to those who can,” in a 2008 case cited in comments by the Governor’s Energy Office.

Central Maine Power Co., in its comments, advanced the idea, writing that the commission’s review of net metering should “address the inappropriate subsidization between net energy billing customers and other utility customers.”

And the Maine Public Advocate’s Office has argued that state and federal solar policy largely limits the benefits to landowners with high federal tax liability. In other words, the well-to-do.

The federal tax credit for solar installations does not come to taxpayers as a cash rebate, but instead discounts any existing tax liability. The Public Advocate’s Office wrote that then “requires that customers have sufficient tax liability to realize this benefit.”

“If all customers bear the costs of the program, all customers should have the opportunity to participate and obtain those benefits,” the Public Advocate wrote.

There’s no way for renters to benefit from net metered systems either.

But the solar industry and others argue that doesn’t mean net metering should go away for the relatively small group that has it now and counted on it to help recover their investment in the equipment.

Net metering customers worry that what happened in Vegas won’t stay in Vegas.

In Nevada, things got heated when regulators changed the rates of about 17,000 solar customers who had installed the photovoltaic systems.

The case rankled entrepreneur Elon Musk’s SolarCity and installer SunRun, leading to a lawsuit, a November ballot initiative and calls for a special session of the legislature.

The fate for existing customers poses a lingering question in Maine as well. National and local solar installers want customers to be grandfathered into current net metering rates “in perpetuity.”

But utilities and the Governor’s Energy Office have argued those customers should eventually transition away from their current arrangements, being grandfathered for no more than three years.

That prompted sharp criticism from Assistant House Majority Leader Sara Gideon of Freeport, who called the governor’s suggestion a “reckless, ill-conceived plan.” Gideon sponsored a solar policy bill last session that proposed a successor to net metering and would have grandfathered existing customers for 12 years.

The Office of the Public Advocate, which represents ratepayers, suggested grandfathering current net metering customers for 10 years from the start of the operation of their solar systems.

CMP and Emera Maine said they were not opposed to grandfathering current customers, with CMP suggesting that around 10 years would be appropriate for customers to get a payback on their initial investment.

Environmental advocates echoed the solar industry, arguing that current customers should keep their net billing arrangements for the life of their existing solar installations.

“In the event that changes are proposed, it would be massively disruptive, legally questionable and virtually unprecedented to change net metering rules for existing customers,” the Conservation Law Foundation wrote.

Now the issue is in the hands of regulators.

Public Advocate Tim Schneider led a compromise last year among utilities, solar installers, his office and others to give small solar generators access to long-term contracts. The proposal promised to keep solar adoption on track for growth projected under net metering, while introducing some market dynamics into the pricing.

The system would have set up a “standard buyer” for solar power — likely the utilities — that would solicit bids and could enter long-term contracts with certain solar generators, grouped by size. The utilities would aggregate renewable energy credits for each megawatt those customers generated, selling that into the regional cap-and-trade program and using those proceeds to defray costs for all electricity customers.

That plan’s failure landed the solar policy back in the laps of regulators. They will now play referee and consider whether they, without the Legislature, can or should dust off the compromise plan and enact it themselves.


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