Policy update from Amicus Members
LightWave Solar is a founding member of Amicus, a solar cooperative consisting of leading solar installers across the U.S. Amicus members pool their buying power to get industry-best pricing and share best practices. As part of our monthly blog post for May, we asked a few members to discuss current solar policy activity in their areas.
Fred Greenhalgh with Revision Energy in Maine had this to contribute:
Maine has struggled to get comprehensive solar policy passed for several years now. It is no secret that Maine’s Governor, Paul LePage, is a strong opponent of solar (and renewables in general) and new solar policy – even if broadly supported – has not managed to survive his veto pen. Despite policy headwinds, Maine’s solar industry has been growing steadily, as a result of dropping prices of solar, a solid solar resource, and relatively high prices for electricity which consumers can offset with retail net metering.
The First Regular Session of Maine’s 127th Legislature wrapped in July 2015 with one successful solar bill: LD1263, a Resolve which ordered a stakeholder group to explore a post-net metering for solar. Almost unbelievably, a wide coalition including solar advocates and installers, environmental groups, utility companies, the Office of the Public Advocate, municipalities, faith-based groups, and colleges and universities, all agreed on a framework for a replacement to Maine’s retail net metering, an idea that hinged on a ‘Standard Solar Buyer’ (SSB). This framework was polished up into a bill that became LD1649.
The framework for the SSB is a bit complex, but the jist of the idea is that exported solar production from the solar fleet that would be built as part of LD1649, would all be aggregated by the SSB and then various attributes of the solar would be sold into various energy markets, ranging from RECs to wholesale generation. This would all create revenue that would benefit ratepayers as a whole, and in turn also provide revenue to compensate the solar producers for their exported power, at rates that would be designed to be fair and also result in an ambitious amount of solar getting built.
Under LD1649, net energy billing as we know it today would have been replaced with fixed 20-year contract prices, giving transparency to pricing and also opening up the solar market to customers who can’t benefit from net metering, such as community solar, large-scale municipal solar, large scale solar farms, etc. Numerous protections for Maine’s ratepayers were built in, such that solar exporters would not be unfairly compensated and such that the program would overall save ratepayers in the order of $100 million by the programs’ completion.
Despite broad support both amongst the stakeholders, Democrats, and many moderate Republicans (since the bill addressed nearly every previous Republican concern with solar policy, and was built using free market principles), the bill faced fierce opposition from a vocal minority as soon as it was brought before the Energy, Utilities, and Technology Committee. A strange alliance formed between the Governor’s office (who propagated misinformation about the bill and aggressively lobbied Republicans against it) and national solar companies, who viewed any modification of retail net energy billing as a dangerous precedent to set. Maine’s solar industry, while wary of modifying net metering as well, was unanimously in support of the bill since its overall goal: get more solar built, at a fair price for everyone, and avoid future battles with the utilities at the PUC – was more important than maintaining net metering at all costs.
In the end, the broad bipartisan support was not enough to overcome the veto from the Governor and the recurring themes of misinformation propagated among opponents. Despite overwhelming evidence to the contrary, many lawmakers still believed the bill would hike electric rates, and in the end, by a slim majority – 3 votes – LePage’s veto was sustained.
The shadow that hangs over Maine’s solar industry now is that the PUC will be conducting a ‘review’ of net metering this summer. The PUC has large room to modify net metering under Maine’s current law, and all three PUC commissioners were appointed by Gov. LePage. While we supported LD1649 when tit was presented as an option, we will now focus on vigorously defending net metering as a fair and simple program for compensating solar. Maine’s own ‘Value of Solar’ study found that exported solar power was worth 33 cents per kWhr to the grid – almost double the current retail rate of power. While not ideal for certain classes of customers, net metering is the cornerstone of Maine’s solar industry, and any changes threaten hundreds of jobs and the investments of thousands of working class people. In the meantime, ReVision Energy continues to go out and install solar throughout the beautiful Pine Tree State, and is encouraging customers who want retail net metering, to get a system installed today, as a hedge against any potential future changes to net metering.
David Dixon from Native Solar in Austin, TX had this to contribute:
Texas has a very interesting solar story to tell. With the state’s large and growing population, continuous development, it’s primed for a huge distributed solar boom. Combine this with a dedicated, state-wide grid connecting the second largest state market of potential rooftop solar through a patchwork of deregulated markets, electric cooperatives, and municipally owned utilities, and we should have quite the makings for a solar energy playground.
Yet, a recently released report from the Center for Biological Diversity, entitled Throwing Shade: 10 Sunny States Blocking Distributed Solar Development, highlighted Texas as one of the worst states when it comes to supporting solar friendly policy.
“Thanks to weak and nonexistent policies, the distributed-solar markets in these states have never been given a chance to shine,” Greer Ryan, sustainability research associate with the Center for Biological Diversity and author of the report, said. “There’s room for improvement in solar policies across all 50 states, but it’s especially shameful to see the sunniest states fail to lead the transition from fossil fuels to clean, renewable energy.”
Unfortunately the state’s legislature and regulators have made little progress on distributed solar policy in recent years. Texas met its 2025 renewable portfolio standard goal of 10,000 MW in 2010 with primarily wind generation and no tangible improvements have been made since. In fact, there were efforts in 2015 to repeal it. A “nonwind sources” carve-out for the state’s RPS was approved in 2005, only to be later blocked by the utilities commission. In 2007 a bill that would have mandated statewide net metering was blocked by the Public Utilities Commission (PUC). In 2009, 2011 and 2013, efforts to circumvent the PUC’s authority to require that retail electricity providers offer net metering to their customers failed to pass the state legislature.
But it is not all bad news. Texas’ solar-rights law and allowance for third-party ownership puts it a step ahead of many other states and recent efforts by the rapidly growing solar industry organized through the Texas Solar Power Association has been successful in the last two sessions supporting important legislation limiting the ability of homeowner associations to restrict rooftop solar.
Rooftop solar is growing steadily in Texas, but we are a long way from realizing the potential that exists in the Lone Star State. We look forward to seeing what steps can be made in the 2017 legislative session.
Gordon Woodcock with Taitem Engineering in New York had this to contribute:
I was both excited and intimidated by the Amicus blog topic this month. Policy, especially energy policy, is a topic riddled with bias and opinion. It’s also incredibly important because policy establishes goals that may otherwise be unmet if we rely on the status quo to accomplish what is desired. And I cannot think of another industry that has influenced and been influenced by policy as much as the energy industry. Our foreign policy has been dictated by energy interests for decades, and domestic policy has driven energy infrastructure development for an even longer period of time.
Almost 40 years ago President Jimmy Carter proclaimed in his State of the Union Address:
Let our position be absolutely clear: An attempt by any outside force to gain control of the Persian Gulf region will be regarded as an assault on the vital interests of the United States of America, and such an assault will be repelled by any means necessary, including military force.
Oil and gas are so vital to our economic interests and national security that we have deployed military forces around the world to ensure steady supply of petroleum resources and avoid disruptions due to internal strife and external aggressions. While this is not specifically energy policy, it is a direct connection between energy industry interests and foreign policy. And it should be considered when we establish domestic energy policy intended to provide economic stability, protect the environment, and support a flourishing democracy for future generations.
Our domestic policy has long promoted the “next” energy source. A fledgling coal industry benefitted from subsidies in the mid-19th century to help replace wood as a fuel source. Tax incentives, low royalty payments, state sponsored geologic surveys, and research and development (R&D) funding have since helped the coal industry attain a dominant position in the United States that has only recently been displaced by natural gas.
Natural gas has also seen costs reduced thanks to public policy. Interstate pipelines, cheap access to federally controlled lands with gas reserves, and more R&D dollars are a few examples of how domestic energy policy has encouraged growth of an energy source seen as preferable to coal. This intent holds true for every energy source we have at our disposal. Federal funds have built dams for hydropower. And the federal government limits the liability for nuclear power plants or no private insurer would ever accept such risk.
Solar photovoltaics and renewables in general are at the forefront of public policy debate both at the state and federal level. We have seen the residential solar industry virtually destroyed by penstroke in states like Nevada or allowed to blossom in places like California due to policy encouraging the “next” step in our energy infrastructure development. Here in New York we are embarking on an uncertain and ambitious effort called Reforming the Energy Vision (REV). REV is described as a:
“comprehensive energy strategy for New York to help consumers make better and more informed energy choices, enable the development of new energy products and services, protect the environment and create new jobs and economic opportunity throughout New York State.”
REV involves distributed generation, energy efficiency, renewable energy, and cooperation between utilities, government, and private industry. We are still in the early stages, and pilot projects are just now being developed. Effective policy must have a strong vision as espoused by this initiative, and also engage the people affected by it. As individuals we have responsibility to influence these policies that so powerfully affect our daily lives and influence what the future holds.
Kelsey Gibb with Sunsense Solar in Colorado had this to contribute:
As anyone in the industry can tell you, solar and policy are fundamentally interconnected—at least for the time being. From the federal to local level, solar policies affect our daily business operations. Thankfully for us here at Sunsense Solar, the Roaring Fork Valley of Colorado has various progressive, solar friendly policies set in place that help make going solar easier for our community.
First of all, each of our local utility companies still offers some type of solar rebate. From Xcel’s production based incentive (PBI) to Holy Cross and Glenwood Springs Electric solar incentives, our utility companies’ policies help make solar financially viable for our customers. However, these rebates are never guaranteed and can change anytime. So we are always striving to stay on top of what we like to call the “solar coaster.”
Another local policy that demonstrates the commitment of this valley to energy efficiency is Pitkin County and the City of Aspens’ Renewable Energy Mitigation Program (REMP). Enacted in 2000, this policy mandates that “homeowners and commercial property owners who wish to consume additional energy for snow melt, outdoor pools, spas or excess square footage have the option of installing a renewable energy system onsite or paying a mitigation fee instead” (http://aspencore.org/programs/remp/). When owners choose not to install renewable energy, their mitigation fee directly funds our local non-profit, Community Office for Resource Efficiency (CORE). CORE uses these funds to administer rebates to eligible homeowners and business owners in the valley who make energy efficiency upgrades—which includes going solar. REMP is an incredibly successful program and has raised over $12 million for energy efficiency rebates throughout the Roaring Fork Valley.
In addition, our own local Town of Carbondale government integrated the 2012 International Green Construction Codes (IGCC) into their building bylaws. These codes dictate that for any new construction or remodel, a portion of the building’s energy usage must be offset by renewable energy. These building codes coincide perfectly with the Town’s dedication to clean energy and are only one part of what is known as “Carbondale 2020”(http://www.cleanenergy2020.com/carbondales-clean-energy-goals/) . With guidance from local non-profits such as CORE (http://aspencore.org/) , Clean Energy Economy for the Region (CLEER) (http://www.cleanenergyeconomy.net/) , and Garfield Clean Energy (http://www.garfieldcleanenergy.org/) , in 2009 the town created clean energy goals that we hope to reach by 2020:
1) Increase energy efficiency by 20% by 2020
2) Reduce petroleum consumption 25% by 2020
3) Obtain 35% of energy from renewable sources by 2020
As a solar company, we are fortunate enough to live in a community where clean energy and energy efficiency are priorities not only to the general public, but also to elected officials and that this is reflected in our local policies.
As for LightWave Solar, we have used the term “solar coaster” often to describe local solar policy and its effect on our business. The Tennessee Valley Authority delivers solar policy, and over the years there have been many TVA solar program changes, restrictions and closures that have put a damper on rooftop solar. On top of it all, there has been downward pressure on rates even as bills are increasing.
TVA’s 2016 Green Power Providers (GPP) program for small-scale residential and commercial solar projects (50kW or less) pays participants for 100% of their solar generation at the escalating retail rate for 20 years. This is a good deal for homeowners and business owners who want to install solar. Unfortunately, TVA severely limits the program in overall capacity – only 10 MW total with 5MW for commercial projects and 5MW residential projects. As of May 6, 4.6 MW has already been applied for, and most of it is for commercial projects. Only about 30 percent of the commercial capacity remains, and we expect the program to close well before the end of the year.
The best part of the GPP program is that TVA will buy 100% of solar generation at the escalating retail rate for 20 years. Over the last 10 years, the cost of electricity in Tennessee has increased over 4 percent each year. According to the U.S. EIA, commercial rates in Tennessee have gone up 4.2 percent each year on average between 2005 and 2015. For residential customers, rates have increased 4.8 percent each year on average. As electric rates increase, solar electricity becomes that much more valuable.
However, since 2010 in Tennessee, electric rates have increased only about 1 percent each year for both commercial and residential customers. Even still, electric bills are on the rise. TVA and local power companies are “keeping rates low” while increasing monthly service fees and adding new demand charges, which solar generation cannot affect as much (none whatsoever under the TVA’s GPP program). Keeping electric rates low while increasing overall electric bills with fees appears to be a deliberate effort to minimize the value of solar in order to limit rooftop solar adoption.
TVA clearly recognizes the value of solar generation. Just last month TVA green lighted 16.7MW of solar project applications from local power companies. Earlier this year, TVA announced they would buy solar generation from an 80MW solar facility in Colbert, Alabama, near a recently retired coal plant. But just as TVA contracts with more utility-scale solar, there seems to be an organized effort to severely limit private businesses and homeowners from investing in rooftop solar by way of small, arbitrary program caps and system size limits, and now the unexplained restructuring of electric bills.
With solar prices at their lowest and with the federal tax credit extended, TVA and local power companies should not be able to quietly increase electric bills through added monthly fees and new unclear, unverifiable demand charges that discourage clean, distributed generation. If they must increase revenue to cover the cost of providing reliable power to customers, TVA and the local power companies should do it in the usual, transparent way of raising the kilowatt-hour rate. This encourages energy efficiency and clean, renewable energy like solar.