Maine PUC proposes rule to phase out net-metering

maine solar net metering

The ups and downs of Maine’s solar industry continue after its Public Utilities Commission issued a proposed rule that would make several changes to Chapter 313 concerning net metering. Under the Commission’s current rule, generation from a customer’s generating facility may be used as a kWh credit (currently energy plus transmission and distribution charges) to offset that customer’s electricity usage. The major changes to the proposed Rule beginning in January 2017 are summarized below:

• As new customers sign up over the next 10 years, netting of the T&D portion of the bill will be gradually reduced to reflect changes in the costs of small renewable generation technology.
• Netting regarding the supply portion of the customers’ bill will remain unchanged.
• The size cap for an eligible customer facility is proposed to increase by 50%, from 660 kilowatts to 1,000 kilowatts.
• Community net energy billing is explicitly authorized.
• Consumer protections and transparency in community net energy billing and leasing arrangements.
• Existing Net Energy Billing customer arrangements would be unchanged for a 15 year period.

RELATED: Maine solar bill defeated by larger installer lobbying effort — did it hurt the local installer? 

“The Commission received many comments over the last several months regarding this topic” noted Commission Chairman Mark Vannoy. “In light of changes in the technology and costs of small renewable generation, particularly solar PV, we felt that opening a rulemaking process to consider changes to the Rule was the prudent course of action to ensure that all ratepayers are treated fairly.” “We look forward to receiving comments on the proposed Rule from interested parties and the public,” concluded Vannoy.

In January 2016, Central Maine Power Company (CMP) filed a letter stating that, at the end of calendar year 2015, the cumulative capacity of the generating facilities for which CMP has net energy billing agreements under Chapter 313 is approximately 1.04 percent of CMP’s annual peak demand. Consequently, CMP requested that the Commission undertake the review of net energy billing required by Section 3(J) of Chapter 313. In response to the CMP January 14, 2016 letter, the Commission, on June 14, 2016, issued a Notice of Inquiry to obtain comment and information from interested persons regarding Maine’s NEB rules and whether the rules should be modified in light of changing economics and markets.

— Solar Builder magazine

Maine solar bill defeated by larger installer lobbying effort — did it hurt the local installer?

Maine solar energy

A solar energy bill was defeated in Maine last month, and the reason it was defeated, according to this feature in the Portland Press Herald, was a lobbying effort by the country’s largest solar installers. For those installers – SolarCity, Sunrun – getting involved in local politics to work on pro-solar legislation is nothing new, but this article claims that their efforts killed what some local solar installers in the area considered to be a positive bill for the solar industry.

From the Portland Press Herald:

Jake Hunt, an employee with InSource Renewables in Pittsfield, installs solar panels in East Vassalboro. Vaughan Woodruff, the company’s owner and an advocate of the proposed solar legislation, says an amendment late in the process served as a distraction and “gave shelter to opponents.” The bill ultimately failed to override Gov. Paul LePage’s veto by two votes.

The conflict between national solar companies and their Maine counterparts reflects deep divisions over how to credit the homeowners and small businesses for the power they generate on rooftops and in backyards.

Those credits are seen as essential to the expansion of solar power because they provide a payback for the upfront investments in solar equipment. A solar-electric system can cost $15,000 to $18,000 for a typical Maine home, with a payback period of up to 12 years after a 30 percent federal tax credit, depending on electricity prices.

Of course, net-metering sits at the heart of this story, as it does with all of these local political wranglings. The Maine solar bill would have replaced net metering with a new, untested alternative credit system that was “crafted by a coalition of local solar installers, top Democrats, the state’s public advocate, utility companies and the state’s clean-energy and conservation groups,” according to the Portland Press Herald. “Utilities would have bought the solar power in combined, long-term contracts at rates that would have decreased over time as prices fell and solar penetration grew.”

Net metering is regarded as hugely important in solar’s value proposition for a homeowner, and many in the industry fight for the full retail rate to be maintained. And while this definitely makes sense (getting paid for contributing energy back to the grid at the value it is allegedly worth), utilities and regulators often fight against it, and maybe rightly so. We only know that no one seems to agree on what compromise might satisfy all parties. New York has maybe found a solution.

But it is interesting that in this case the perspective of the larger, more powerful solar voices – who have won a lot of battles for the entire industry – might be clashing with some of the more local, smaller voices. Regardless, the issue is still unsettled and will now be handled by the state’s Public Utility Commission (PUC), which isn’t always a good thing for the solar industry. Maybe a risky gamble on the larger installers’ part.

Definitely read that full article for a lot more details into the lobbying effort and the bill’s demise.

— Solar Builder magazine

Solar vs. the state: Net metering, rate battles are heating up around the country

solar net metering

The extension of the Investment Tax Credit (ITC) got the big headlines, but the net metering and rate decisions being made around the country could have a dramatic impact on a solar installer’s business.
The most notable of these battles is taking place in Nevada, and the path taken to get here has been strange. Nevada made a commitment to solar in 2014, with SEIA reporting $569 million worth of installments as a result. The flood of installs, while encouraged by the state, was too much for them to handle and they hit the 235 MW cap on net metered systems a year later.

This means it was decision time, and a disruption in the energy sector that big and that fast caused a stir among utilities and regulators, leading to an unsurprising decision at the end of 2015 when the Public Utilities Commission PUCN voted to reduce the retail remuneration rate paid to net metering customers and also create a separate customer class for residential and small-scale solar. In addition, there was an increase in fixed charges as well as a decrease in the volumetric commodity charge.

The increased rate was enough to bring new residential solar business to a screeching halt, but the most controversial aspect is all of those changes are applied retroactively to all solar customers with the new rates phasing in over a 12-year period. So, if you installed a system based on the state’s urging and got a nice deal – whoops!

The impact of this decision was immediate within the state and may reverberate beyond its borders. In Nevada, big names like SolarCity and Sunrun (and Vivint Solar before them) decided to halt sales and leave the state, taking jobs with them. Those companies represent about two-thirds of the solar business done in the 2014 boom. Smaller, local companies Go Solar, Premier Solar and Radiant Solar Solutions also announced a combined elimination of 98 positions.

But other states were already poised for their own net metering battles, and this outcome, despite the negative headlines, provides a completed blue print that others could follow.

Around the country

As of Q3 2015, 42 states were considering 91 different actions, 22 of which involved net metering and 26 of which involved a residential fixed charge increase, according to NC Clean Energy Technology Center’s “50 States of Solar” report. Here are a few of the notable states to watch:

Maybe the most major of these debates was taking place in California. The margin was narrow, but in a 3 to 2 vote, California’s Public Utilities Commission upheld its net metering regulation, allowing homeowners with solar panels to keep selling the excess power back to their utility at the full retail rate.

Since California is the solar capital of the U.S., this was an important decision that has big implications for the solar industry and utilities. Most states have passed laws allowing net metering, but a 40 percent drop in the cost of residential solar installations in the last five years has prompted some to review those policies amid calls by utilities to roll them back.

But as the close vote indicates, there is still some indecision on this issue. There already were some concessions made that will drive up other costs. Solar customers will have to pay a new fee of between $75 and $150 to connect a system to the grid and will be required to move to time-based utility rates, paying more for power during peak hours. They will also be required to pay monthly fees of about $6 for certain utility programs.

The state’s three investor-owned utilities, Pacific Gas & Electric, Southern California Edison and San Diego Gas & Electric, initially argued for fixed charges for solar customers, but in the last month authored a new proposal that would preserve net metering but reduce the rate at which solar customers are compensated for the excess power they produce.

SolarCity CEO Lyndon Rive released the following statement about the California Public Utilities decision on net metering:

“Today’s decision by the Public Utilities Commission will empower Californians to contribute to a cleaner, more affordable, more resilient and more distributed grid. It will give us the time to prove distributed energy’s full benefits to the grid and all ratepayers, while continuing to deploy clean energy and creating jobs today.”

Hawaii has been the most progressive state in encouraging solar installations, but it did eliminate the previous retail rate net metering program in favor of two new options — those supplying power to the grid pay a new fixed rate, and those who do not receive a minimum bill.

Arizona is the next Nevada in terms of a contentious debate to watch. The Arizona Corporation Commission set a flat grid access fee of $5 or 70 cents per kW in 2013, but said it would consider the $21 or $3/kW fee the Arizona Public Service Co. wanted. The back and forth in the ensuing years led the ACC to open a solar cost-benefit analysis, which is still ongoing.

South Carolina’s Public Service Commission approved retail rate net metering in 2014 and will be reevaluating this in 2020. Any residential customer who installs a system before 2021 is eligible for the retail rate up until 2025.

In December, Mississippi set a policy that will compensate solar customers at a rate between the retail and wholesale prices ($0.07 to $0.075 per kWh).

Massachusetts hit its net metering cap last year and just kicked off 2016 by hitting its cap on Renewable Energy Certificates quicker than expected. There is a pro-solar bill sitting in the state’s Senate and pro-utility bill sitting in the state’s House. And they both may be sitting there for awhile. This is disappointing considering Massachusetts’ prominence in solar thus far.

“Massachusetts has been one of the top solar energy markets in the U.S. for the last decade,” said Sean Gallagher, vice president of state affairs for SEIA in a statement. “That leadership has brought over 12,000 solar jobs and more than a billion dollars of private investment in clean energy to the Commonwealth. The state has a unique opportunity to build on that success, but recent policy inaction has led to an uncertain business environment, and solar projects have stalled in hundreds of towns.

“We urge policymakers to raise the caps on consumer sales of electricity back to the grid. This must be achieved through quick legislative action to maintain investment and jobs. The legislature’s own task force found that every $1 invested in solar brings $2 in benefits to the Commonwealth.”

In March 2015, the Maine Public Utilities Commission released a study that put the value of solar at 33 cents/kWh, substantially higher than what state residents pay for traditional power. Solar advocates said the study underscored how the resource is underutilized in the state, but local utilities are fighting against net metering. To fight back, Maine solar installers, local and national businesses, environmental organizations, and the newly-formed Solar Energy Association of Maine delivered a petition with nearly 4,000 signatures to the state legislature, urging Maine regulators and lawmakers to preserve current net metering policy as a side-by-side option for consumers who want to go solar.

The petition comes on the heels of a letter signed by 15 groups, including local energy companies, the local IBEW union and national nonprofits, similarly calling for regulators to maintain solar net metering. Without a legislative fix that keeps net metering intact, nearly 400 solar jobs and almost 50 solar businesses in Maine are at risk.

Work to do

Bottom line is while the federal government seems to have backed the objectives and development of solar technology, there is still a lot to be figured out at the ground level. According to a new report from GTM Research, “Unlocking the Value of DER 2016: Technology Strategies, Opportunities and Markets,” despite distributed energy resources (DER) growth, few states are developing the policies, technology ecosystem and data infrastructure required to enable the location-based valuation systems that will underlie the development of distribution integrated resource planning and DER procurement processes for grid services.

The report describes the evolution of energy resource valuation as utilities and regulators move toward the development and adoption of locational valuation. In fact, a new GTM Squared study found that seven out of 10 regulators, utilities and solar industry providers expect customer-sited solar to be compensated based on locational factors in 2020.

“The development of an overarching, long-term algorithm for the value of distributed resources will be a foundational tool for utilities to compare procurement options and choose the optimal combination of low-cost, high-value grid upgrades that empower and leverage customer and utility investments to increase system stability, reliability, power quality and grid efficiency, as well as reduce carbon intensity,” said Ben Kellison, author of the report and GTM Research’s director of grid research.

A utility’s ability to plan, simulate, quantify and monetize the value created by DERs is a central challenge to the ongoing evolution of the electric utility industry. The success of this valuation effort will accelerate the deployment of DERs, while finally directing these resources to the optimal locations to provide value to asset owners as well as the network.

Chris Crowell is the managing editor of Solar Builder.

— Solar Builder magazine

Maine solar installers petition legislature to preserve net metering policy

maine solar installers

Maine solar installers, local and national businesses, environmental organizations, and the newly-formed Solar Energy Association of Maine delivered a petition with nearly 4,000 signatures to the Legislature today, urging Maine regulators and lawmakers to preserve current net metering policy as a side-by-side option for consumers who want to go solar.

The petition comes on the heels of a letter signed by 15 groups, including local energy companies, the local IBEW union, and national nonprofits, similarly calling for regulators to maintain solar net metering. Without a legislative fix that keeps net metering intact, nearly 400 solar jobs and almost 50 solar businesses in Maine are at risk.

“We opened Sundog Solar six years ago and began offering Mainers energy independence with solar energy products and installations. Along the way, we have created 10 new jobs and we are about to add more,” said Chuck Piper of the father and son business, Sundog Solar. “If Central Maine Power influences the Public Utilities Commission or Legislature into eliminating net metering, we will be forced to lay off our workers and Maine residents will lose the opportunity to own their power.”

Maine businesses and individuals around the state have benefited from reducing their electricity costs through solar net metering.

RELATED: Another solar win: California keeps net metering rates 

“I installed solar rooftop panels in 2012 and net metering has allowed me to cut my electricity bill,” said Steve Smith of Scarborough. “The proposed alternative may work, but we just don’t know. With the increased uncertainty in payback, I would be reluctant to install rooftop solar under the alternative system. We need to keep net metering as an option.”

“Maine needs stronger solar incentives,” said Steve Weems of Brunswick. “We must have clear incentives to install solar electricity over the full useful life of a system. Our citizens, businesses, and institutions are ready, but Maine’s energy policy has not been very supportive. Net metering is the lone bright spot. Net metering is understandable and useful, especially for smaller-scale projects. Don’t fix it if it isn’t broken!”

“If solar net metering ends, the solar market will grind to a halt and the job loss will be equivalent to another Maine paper mill shutting down,” said Chris Rauscher, Director of Public Policy for Sunrun and a Maine native. “Maine cannot afford to lose more well-paying jobs.”

“Maine needs a win-win solar policy that puts consumers’ interests ahead of monopoly utilities, while encouraging investment and good jobs in community and large-scale solar power plants,” said Glen Brand, Sierra Club Maine Chapter Director.

Utilities have attacked net metering across the country in order to stop competition from rooftop solar. Most recently, the Nevada Public Utilities Commission caved to pressure from the monopoly utility and gutted net metering right before Christmas. As a result, more than a thousand people lost their jobs and six national and local companies were forced to cease operations in the state. Solar advocates are calling for stronger leadership when it comes to consumer choice and competition in Maine.

National politicians from both sides of the aisle, including Republicans Chris Christie and Nikki Haley and Democrat Hillary Clinton, have spoken out and said that states should preserve solar net metering. They know that the policy increases consumer choice and helps homeowners save money.

Out-of-state interests are partnering with Central Maine Power (CMP) to eliminate local competition. Earlier this year, the national utility trade group, the Edison Electric Institute (EEI), intervened in the solar stakeholder process. It is attempting to bring its anti-competitive tactics to Maine and eliminate the fundamental policy of net metering before Maine’s solar market can take off. The legislature is expected to take up legislation this month that will determine whether solar net metering will continue for Mainers.

“Alternative policies, without the certainty of net metering as a side-by-side, give utility monopolies even more power. Utilities will have no incentive to make the new program work, which could lead to hundreds of hard-working Mainers losing their jobs and Maine ratepayers being forced to pay more,” Rauscher said.

The Solar Energy Association of Maine formed this week to protect consumers and support policies that advance the growth of solar power in Maine against efforts to undermine it.