Solar power installers have never been busier in Maine.
They’re covering roofs at dozens of homes. They’re putting up high-profile commercial projects, such as the Maine Beer Co. brewery on Route 1 in Freeport, which features 212 panels with two “tracker” arrays that follow the sun to maximize output. In April, a developer announced plans to build the state’s largest solar project. It would feature 9,500 panels at an abandoned naval facility in Gouldsboro and sell power to The Jackson Laboratory in Bar Harbor.
But all the activity, which echoes a national solar boom, masks the fact that solar energy is at a crossroads in Maine. Despite strong public interest, political support is eroding at a crucial time, making growth here uncertain in the near term.
Solar’s stellar rise is being subsidized by a 30 percent federal tax credit that has been essential to consumer affordability. The credit is set to expire for homeowners at the end of 2016, and drop to 10 percent for utilities and businesses. Congress could renew or modify the program, but the industry is pessimistic about winning a tax subsidy with divided government in a presidential election year.
If the solar investment tax credit goes away, the impact will be keenly felt in Maine.
Maine is the only New England state lacking a clear policy to promote solar development. Clean energy advocates were excited last winter when a handful of bills aimed at providing financial incentives for solar were introduced in the Legislature. But their hopes were largely dashed by opposition from Gov. Paul LePage and ideological differences between Republicans and Democrats.
One bill that would have offered a modest rebate for farmers who installed solar was carried over until next year. Although it was approved in the Legislature, supporters calculated that it didn’t have enough votes to survive an expected veto from LePage.
A far-reaching solar bill, championed by Rep. Sara Gideon, D-Freeport, the assistant House majority leader, was reduced to a study process of alternative ways to compensate solar generation, known as net metering. That study process, called a resolve, is expected to be vetoed by LePage and will face an override vote when the Legislature reconvenes Tuesday. Assuming the veto is overridden, that process will get underway this summer at the Maine Public Utilities Commission. It will include the Maine Office of the Public Advocate, lawmakers, solar installers, clean-energy advocates and utilities. They’ll try to reach a consensus the Legislature can consider next year.
In an interview last week, Gideon said she’s not discouraged by the outcome. Finding an alternative to net metering, she said, is crucial to the long-term growth of the solar industry, and the concepts being discussed in Maine are drawing national attention.
“We are setting ourselves up for the next generation,” she said.
The fate of Gideon’s bill, however, may doom the Gouldsboro solar project. The $9 million venture would have generated enough power for 500 or so average homes. But financing hinged on an element in the bill that would have required electricity suppliers to include new solar generation in their power portfolios. “I’m not sure whether the project is doable without the (solar renewable energy credits) but I’m continuing to explore alternatives,” Kim Kenway, president of Gouldsboro Solar LLC, said last week.
‘UNCERTAINTY ON THE HORIZON’
Nationally, solar electricity is still less than 1 percent of total generation, but it accounted for nearly one-third of new capacity during the first six months of last year, trailing only natural gas, according to the U.S. Energy Information Administration. Falling panel prices are contributing to the trend, putting solar power on par with coal and gas.
In Maine, however, doubts about the federal tax credit and the future of net metering, and Le- Page’s hostility toward subsidies for renewable energy, have solar installers pondering their business plans. One strategy is to expand elsewhere.
“We’re trying to respond to a strong marketplace demand,” said Phil Coupe, co-founder of the state’s largest solar company, ReVision Energy in Portland. “But there’s uncertainty on the horizon, between the tax credit and net metering, and we’re reluctant to buy more trucks and hire employees. If we had a stable environment, we could double our business in the next 24 months.”
Coupe has 60 workers in Maine. He said he’s backed up 10 weeks on installation jobs.
The lack of support in Maine has ReVision expanding in New Hampshire, which offers a rebate up to $3,750 on top of the federal credit. The company has an office there with 40 workers.
One of Maine’s oldest solar installers, Talmage Solar Engineering in Arundel, is using its proximity to the border to work in other states. It installed a 9,562-panel array in Sharon, Vermont, that generates enough power for 440 homes. The project is valued for taxes at $4.2 million by the town and benefits from a state law encouraging long-term contracts for solar power.
“I am having to leave Maine,” said Naoto Inoue, the company’s president. “I don’t do much in Maine. Maine happens to have the worst incentives in New England.”
Maine’s ambivalence toward solar is reflected in related economic activity.
Perhaps not surprising, California leads the nation in solar industry jobs, with 54,700 workers, according to The Solar Foundation. But the second-place state might be unexpected – Massachusetts, with 9,400 jobs at 353 companies. Maine ranks 43rd, with 400 jobs at 43 companies.
Nationally, companies are racing to finance and build projects before the federal tax credit expires. Much of the effort involves giant installations in the West, notably in California and Texas.
A mini-surge is underway in Maine, where a marketing campaign called Solarize Freeport has 39 homes signed up. The Solarize concept started six years ago in Oregon. In Freeport, the community discount for bulk purchase is worth about $800 for each home. Coupled with the 30 percent tax credit, it knocks more than $5,000 from a typical $15,000 installation, if participants sign up by Sept. 30.
“Every morning I wake up and think about January 1, 2017,” said Vaughan Woodruff, owner of Insource Renewables in Pittsfield. “Next year is going to be a total seller’s market. People are going to be calling off the hook and we’re going to be able to pick projects because we can’t do them all.”
Woodruff has seven employees and said his business could double in size to handle the workload. Much of his work is in Freeport and southern Maine, where there are more affluent homeowners. He’d like to stay closer to home and says the solar incentives could have created business in rural Maine. Ideally, he said, he’d train laid-off paper millworkers as solar installers.
Woodruff’s view is echoed by Rob Taisey, co-owner of Assured Solar Energy in North Yarmouth. He’s working with Solarize Freeport and installed the Maine Beer Co. array, as part of an earlier contract.
“It’s a shame,” he said. “While (the Legislature) has been fiddling for the last three years, Mainers are losing out on the ability to leverage a lot of private capital to improve the economy.”