AUGUSTA — Advocates for a plan to increase solar energy projects in Maine by more than tenfold over the next five years said Thursday that the proposal will spur development and jobs while protecting electricity ratepayers.
The plan, backed by environmental groups, solar installation companies and lawmakers, is an attempt to address the challenge posed by homes and small businesses that generate power when the sun shines but depend on the utility companies when it doesn’t. In doing so, the proposal seeks to do away with a practice called net metering – except for existing customers – and replace it with hourly metering and a 20-year price guarantee on the rate that businesses and homeowners are compensated for producing electricity.
The elimination of net metering is one of the most significant elements of the proposal – and its most controversial.
In net metering, Maine utilities provide a one-to-one credit to customers on their bills for power they generate and feed back into the grid. The practice essentially means that customers with solar panels pay only for the “net” amount of electricity they buy each month, that is, what they consume minus what they generate. Homeowners who generate more electricity than they consume receive a credit toward future bills.
DIFFERENT TYPES OF SOLAR PROJECTS
Utility companies have sought to get rid of the practice because it affects their bottom line. Advocates for solar power and the industry have fought to protect net metering because it has helped spur the development of solar projects while ensuring that the businesses and residents producing electricity are fairly compensated for the excess electricity they send to the grid.
Net metering for solar projects is a national issue, generating debate in Congress and other states.
Tim Schneider, Maine’s public advocate, said hourly metering is possible because of the smart meters used by Central Maine Power.
Overall, the proposal presented Thursday to the Legislature’s energy committee seeks to increase Maine’s current solar generation from about 18 megawatts to 250 megawatts over five years. That’s enough power for 40,000 homes.
Roughly 40 percent of the 250 megawatts would come through the development of residential projects. About 60 would focus on grid-scale projects, which are solar arrays that produce up to 5 megawatts and are the preferred choice of utility companies. The proposal also sets goals of 45 megawatts from community projects, which are created by towns or several residences sharing the electricity produced by an array of panels, and 25 megawatts from commercial projects in which panels are installed on businesses.
The price of home solar-electric systems can vary, but Efficiency Maine, which administers energy-efficiency programs, offers an example online that shows a typical residential installation would cost $11,900, after the owner took an available 30 percent federal investment tax credit. Maine currently has no solar tax credit.
The system described by Efficiency Maine would save the owner an estimated $900 a year on electricity payments, for a simple payback period of 13 years, based on current rates.
Larry Pritchett, a Rockland city councilor, said the proposal presented Thursday could be a boon for municipalities, especially those seeking to install solar arrays on capped landfills. He said there are 1,800 acres of capped landfills across the state. If those areas were developed into solar projects, Pritchett said, it could yield up to $30 million in revenue for the host municipalities.
The proposal will soon become a bill for lawmakers to consider this session. Schneider said groups representing several interests support the plan, which has been in development for more than six months.
SAVINGS, MORE JOBS, AND SKEPTICS
Assistant House Majority Leader Sara Gideon, D-Freeport, said the proposal strikes the right balance between encouraging solar development, growing jobs in the industry and protecting ratepayers.
“Our challenge here has been growing solar in a way that gives people energy independence, creates jobs and mitigates climate change,” she said. “Now we’ve created a way to do that and to do it in a way that remains sustainable in the future and will drive significant solar growth.”
Rep. Nathan Wadsworth, R-Hiram, said the proposal could produce $100 million in savings for ratepayers.
Advocates said the proposal would triple Maine’s solar workforce by adding 800 jobs. It also seeks to increase opportunities for community solar farms. Currently, solar farms are capped at 10 participants. The proposal would get rid of the participant cap, thereby creating the opportunity for larger cooperatives for multiple Maine households and businesses.
The Natural Resources Council of Maine, the Maine Association of Building Energy Professionals and Central Maine Power are among the groups that supported the proposal Thursday.
FATE OF NET METERING A BIG ISSUE
Nonetheless, the pending legislation is expected to face opposition, particularly to the metering component. Supporters of the plan described hourly metering as an accounting change that consumers wouldn’t likely notice. Utility companies long have argued that net metering is sometimes subsidized by other ratepayers who end up footing the bill when power companies upgrade infrastructure – such as transmission lines – to accommodate the additional power generation from renewable sources.
The proposal would still provide solar customers with a credit for their excess electricity, but that credit would be tied to a rate set by the Maine Public Utilities Commission. The rate would be guaranteed for 20 years.
Chris Rauscher, director of public policy for Sunrun Inc., a publicly traded company that boasts the second-largest number of residential solar energy systems, said he had not seen the details of the proposal. However, he said his organization would continue to fight for net metering as an option in the bill. He said net metering is the best way to ensure that solar customers receive a return on their investment.
He said when Nevada eliminated net metering, solar customers lost out and solar companies went bankrupt.
“Now everybody is suing everybody,” he said.