Iowa government unironically tables a “sunshine tax” on solar system owners, which is as regressive as it sounds

Des Moines Iowa Capital Building Government Dome Architecture

Stuff like this is why California’s fight for a Solar Bill of Rights matters. In Iowa, utilities are moving a “sunshine tax” through the state legislature. The bill, which is in front of the full House Commerce Committee, would impose fees of about $300 a year on solar customers under the guise of “grid fees,” says the Waterloo-Cedar Falls Courier. That would be a massive blow to owners of PV systems – killing their ROI – and effectively end Iowa’s market for new solar customers.

From the Courier:

That would extend the payback on small-scale solar power generating units from less than 10 years to as long as 20 years, former legislator and current Cedar Rapids City Council member Tyler Olson told the subcommittee.

“If the life of system is 25 years — no one going to make that investment,” he said, adding that it could lead to the loss of some or all of the estimated 800 solar industry jobs in Iowa, he said.

Pretty much. Fixed charges like this, proposed as fairness to the utility, have been fought and defeated all over the country for years because of faulty calculations of PV’s value as a resource vs. grid costs. The article notes that at least one member of the committee wants to delay this action until the results of a utilities board study. Well, to save some time, here is some easy to access information that Iowa legislators are free to Google or find in our archives. We will repost here to save some time.

Benefits of DG solar energy to the grid

Avoided energy costs. Solar energy systems produce clean, renewable electricity on-site, reducing the amount of electricity utilities must generate or purchase from fossil fuel-fired power plants. In addition, solar photovoltaic (PV) systems reduce the amount of energy lost in generation, long-distance transmission and distribution, which cost U.S. ratepayers about $21 billion in 2014.

Avoided capital and capacity investment. By reducing overall demand for electricity during high-load daytime hours that form the peak period for most utilities, solar energy production helps ratepayers and utilities avoid the cost of investing in new power plants, transmission lines, distribution capacity, and other forms of electricity infrastructure.

Reduced financial risks and electricity prices. Because the price of solar energy tends to be stable over time, while the price of fossil fuels can fluctuate sharply, integrating more solar energy into the grid reduces consumers’ exposure to volatile fossil fuel prices. Also, by reducing demand for energy from the grid, solar PV systems reduce its price, saving money for all ratepayers.

Increased grid resiliency. Increasing distributed solar PV decentralizes the grid, potentially safeguarding people in one region from other areas that are experiencing problems. Emerging technologies, including smart meters and small-scale battery storage systems, will enhance this value.

Avoided environmental compliance costs. Increasing solar energy capacity helps utilities avoid the costs of installing new technologies to clean up fossil fuel-fired power plants or meeting renewable energy requirements, and avoid the cost of emission allowances where pollution is capped.

There’s also this 2014 paper from the Lawrence Berkeley National Laboratory that concluded residential solar has little impact on residential rates but could erode shareholder returns.

— Solar Builder magazine

Reminder, Iowa: New net metering cap rules to go in effect this April

Iowa solar energy net metering

Net metering seems to be slowly losing its political favor. We turn to Iowa today where the state’s Utilities Board accepted a proposed rule change from Alliant Energy would place an arbitrary cap on net metering in order to curtail the number of residents able to make the move.

Why the change?

Under the current rules, net metering has a natural cap of a customer’s total annual energy usage — how many kilowatt-hours (kWh) of electricity are used in a year.

According to the Gazette, the utilities board asked Iowa’s utilities last summer to develop net metering pilot projects, but “for the purpose of expanding renewable distributed generation in Iowa.” According to the board, the aim was to clarify Iowa’s net metering rules and encourage development of more solar and wind projects. The Gazette doesn’t mince words about the likely outcome of these new rules and how its editorial board feels about them.

 

 

Under the new rules, the net metering cap for residential and small business customers will be based on a percentage of the customer’s annual energy usage. We’ve calculated that the change will reduce available net metering by 62 percent for residential customers and by 68 percent for small business customers. Solar installations larger than the cap won’t make financial sense.

Here’s an example: Under the current rules a typical Iowa household using about 12,000 kWh of electricity per year could purchase a 10 kW solar installation that would save the family $1,560 in the first year and pay for itself completely within 10-11 years. Under the new rules, only 3.43 kW of the same 10 kW installation would be eligible for net metering, and would save the same family only $979 per year, taking 18-19 years to pay for itself.

It gets worse. If a customer builds a smaller system that matches the new net-metering caps, that customer still has to pay all of the same fixed costs, including the grid interconnection, feasibility study, and more. The smaller the system, the higher the cost per watt. Small solar systems simply hit a point where they are not financially viable. On top of that, Alliant Energy increased the fees for its solar interconnection process from $50 to $425 or more for a typical residential project.

 

— Solar Builder magazine

Iowa Utilities Board accepts proposal that will cap growing net metering program

The Iowa Utilities Board (IUB) recently accepted a proposed rule change from Alliant Energy, one of Iowa’s two major electric utility providers. This new ruling will drastically change how net metering works in Alliant Energy’s service territory and will reduce the financial viability of new solar installations. The new rules are scheduled to go into effect on April 1 of this year (but are no joke!). Alliant Energy services over 488,000 electrical customers across Iowa.

Iowa solar energy net metering

Solar industry insiders are surprised by the IUB’s decision. Solar is a growing industry and many of Iowa’s neighbors, Illinois, Minnesota, and Missouri, have adopted pro-solar policies. Forbes recently reported that, “In the United States, more people were employed in solar power last year than in generating electricity through coal, gas and oil energy combined.”

RELATED: Solar vs. the state: Regulatory news in Utah, Maine, Maryland 

Net metering was encouraged in 2016

In 2016, the IUB asked Iowa’s utilities to develop net metering pilot projects “for the purpose of expanding renewable distributed generation (DG) in Iowa.” According to the IUB, the aim was to encourage development of more solar and wind projects. Alliant Energy’s proposal will have the opposite effect, according to solar industry experts.

Steffensmeier Welding & Manufacturing of Pilot Grove, Iowa, saves over $90,000 per year with its solar 400 kW installation. The savings have been used for more training and more jobs. Similar economic boosts for rural communities like Pilot Grove are desperately needed throughout Iowa, but now they’re off the table with the new net metering ruling.

What Alliant wants to do

Alliant Energy’s new net metering rules will add a cap on how much solar generation is eligible for net metering. Under current rules, net metering is naturally capped by a customer’s total annual energy usage – how many kilowatt-hours (kWh) of electricity are used in a year. Under the new, more complex rules, net metering will be capped based on an arbitrary percentage of a customer’s annual energy usage the year prior to the solar installation. Typical small business and residential customers will see a 65-70% reduction in net metering eligibility.

Channing Congdon, Director of Design at Ideal Energy, one of Iowa’s most senior solar firms, said that the result will be a 70% or greater reduction in solar installations for residential and light commercial customers in Alliant Energy’s Iowa service territory. “You typically only want to install what you can net meter,” he said. He went on to say that because of the reduction in system size and the fixed costs associated with each solar project, “this ruling effectively ends residential solar for Alliant.”

— Solar Builder magazine

Iowa’s largest utility-scale solar project installed with Solar FlexRack’s G3 Fixed Tilt system

Solar FlexRack Installed in the largest solar project in Iowa

The largest utility-scale solar power generation project in Iowa, a 2.3-MW plant (the largest of the series, which will include five systems and total 5.5 MW) was just installed using Solar FlexRack’s G3 Fixed Tilt system. When completed, the five solar electric plants will reduce over 5 million tons of carbon emissions annually.

Developed and installed by Azimuth Energy, the installations under construction are primarily located in the central and eastern regions of the Hawkeye State. Central Iowa Power Cooperative (CIPCO), Iowa’s largest cooperative energy provider, will commission the carbon-free, solar plants and the clean energy will be delivered to their membership. CIPCO is part of a powerful movement among electric cooperatives to procure sustainable solar power as a part of their energy offering. (Cooperatives across the US have over 500 MW of solar power installed or in the works.)

RELATED: New single-axis tracker, turnkey service launched by Solar FlexRack 

The G3 Fixed Tilt

One of the most cost-effective racking solutions, Solar FlexRack’s G3 Series was independently verified for its ease and speed of installation.

Steve Daniel, EVP of Solar FlexRack said, “We are pleased to have been selected for these projects by an engineering, construction and development support services company as dedicated to quality work and customer service as Azimuth Energy. The rigors of their quality assurance program distinguishes their work and helps to ensure long-term project reliability.”

“We work closely with our clients and want to ensure we find the best solutions for their needs. Solar FlexRack met our demanding requirements, providing the most versatile solution with the ability to accommodate varying terrains and duplicate design configurations – reducing engineering time and installation cost,” said Marc Lopata, President, Azimuth Energy.

— Solar Builder magazine

Iowa’s largest utility-scale solar project chooses Solectria inverters

Yaskawa – Solectria Solar, a leading commercial PV inverter manufacturer, announced at Intersolar North America that its transformerless three-phase inverters were chosen for Central Iowa Power Cooperative’s (CIPCO) utility-scale solar project that spans five sites across its service delivery territory. The five sites total 5.56 MW and are part of CIPCO’s plan to incorporate emissions-free resources to their assets.

Yaskawa - Solectria SolarYaskawa – Solectria Solar’s inverters were chosen by the largest EPC firm in the Tri-State area, Azimuth Energy of St. Louis, based on design flexibility, reliability, MPPT granularity, decreased BOS costs and allowing a robust energy production during maintenance. Azimuth Energy has used Yaskawa’s inverters on other projects.

“We’re pleased to work with Yaskawa – Solectria Solar again on this group of utility-scale projects,” said Marc Lopata, PE President of Azimuth Energy. “We’ve found their products and support to be top notch and unmatched by any other inverter supplier in the industry. By utilizing Yaskawa, we’ve met all production and uptime targets on previously completed utility-scale projects.”

RELATED: Yaskawa-Solectria adds new cost-saving features to string combiner lines 

“The CIPCO project demonstrates the advantages of using Yaskawa’s inverters in utility-scale systems,” stated Mark Goodreau, Director of Sales of Yaskawa – Solectria Solar. “Yaskawa’s transformerless inverter solutions reduce Balance of System and O&M costs while maximizing energy production. These significant benefits are crucial to EPCs and system owners when choosing suppliers for long-term investments.”

— Solar Builder magazine