A compromise proposal to boost solar power development in Maine 12-fold over five years is being opposed by Gov. Paul LePage, casting a shadow over the hopes of clean-energy advocates and setting the stage for a fight in the Legislature.
The proposal, which is being drafted into a bill, has won the support of interest groups that don’t often see eye to eye. They include solar installers, Maine’s Office of Public Advocate and the state’s two investor-owned utilities, Central Maine Power Co. and Emera Maine. They are backing a plan that they say would create an estimated 800 jobs and help all ratepayers.
But staffers at LePage’s energy office who have participated in negotiations on the compromise have reached a different conclusion. They say the plan maintains subsidies for homeowners who install solar-electric panels on their rooftops at levels that hurt other ratepayers.
“We’re not opposed to solar,” said Lisa Smith, a senior planner in the energy office. “But we’re looking out for the cost to all ratepayers. We were in favor of a mechanism that went in a market-based direction, but this isn’t it.”
Critics and backers are preparing to make their cases next week, at a yet-to-be-scheduled public hearing before the Legislature’s Energy, Utilities and Technology Committee.
Government support and falling equipment prices have sent solar installations soaring across the country. The federal Energy Information Administration estimates that large, utility-scale solar projects being proposed this year will exceed the generation of any other single energy source.
New England is sharing in this movement, particularly in states where policies encourage solar energy. But in Maine, clean-energy advocates lament the lack of rebates and incentives, driven by LePage’s view that homeowners who can afford the upfront cost of installing solar panels are benefiting from the rates that power companies charge all of their customers to maintain the grid.
Advocates counter that the governor isn’t taking into account how all Mainers would benefit from solar power because of things such as cleaner air and job creation.
PARTIES ACHIEVED A BREAKTHROUGH
After a wide-ranging bill to expand solar failed last year following opposition from LePage and the utilities, lawmakers ordered a study group to seek a compromise. The group, led by Public Advocate Tim Schneider, included Smith from the energy office, environmental groups, utilities and solar installers. Six months of work led to a report that offered a framework for growth, but not a clear path forward.
That changed this winter when Schneider began meeting with interested parties that included Rep. Sara Gideon, D-Freeport, Rep. Nathan Wadsworth, R-Hiram, the Natural Resources Council of Maine and Fortunat Mueller, co-founder of ReVision Energy, Maine’s largest installer of solar panels. They were able to make a breakthrough and fashion an agreement that won the support of the utilities, which have opposed many solar expansion plans in other parts of the country.
The plan aims to grow solar capacity in Maine from about 18 megawatts today to 250 megawatts in five years, or 2 percent of the state’s power needs. Roughly half of the growth would come from homes and small businesses. Lesser amounts would come from utility-scale projects, community solar farms, and from the commercial and industrial sectors.
To hit the targets, utilities would serve as a so-called standard buyer, purchasing the output from each market segment and using revenue from the sale of the power to offset the cost of contracts running 20 years. The Public Utilities Commission would seek bids for the best rates.
The plan also would allow existing customers to continue net metering through 2029, an arrangement through which Maine utilities currently 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.
ROOFTOP SOLAR A STICKING POINT
Net metering rules were enacted years ago, when solar-electric panels were new and too costly for wide-scale use. Utilities say the system doesn’t fairly compensate them for the full cost of providing service to all customers, as more homes and businesses turn to solar power.
To overcome that opposition, the proposal requires new solar owners to be part of the standard buyer system and be compensated based on the rates set in the 20-year contract. It also opens the door for companies affiliated with CMP and Emera, which build renewable energy projects in other states, to participate in grid-scale solar ventures in Maine.
But Smith said this plan remains heavily skewed to rooftop solar installations, which she said is the most expensive form of solar generation. The proposal also would allow net metering to remain in effect while rules are being drawn up, which she estimated could take two years.
“Once again, this proposal has the state choosing to subsidize one type of energy generation over another,” she said.
BATTLE BREWING FOR LAWMAKERS
Net metering changes also are drawing opposition from the other end of the spectrum, from national solar companies that get most of their revenue from home installations.
“Nearly every solar job in Maine is because of net metering, and net metering should be retained as a side-by-side option for customers alongside any new proposal,” said Chris Rauscher, public policy director for San Francisco-based Sunrun Inc.
Sunrun is a member of The Alliance for Solar Choice, which is fighting erosion of net metering laws in other states. It recently commissioned a poll, which will be cited at the upcoming public hearing, that indicates strong, bipartisan support among Mainers for continuing the current net metering rules for homeowners. The survey found 91 percent of Maine voters favored rooftop solar and 67 percent wanted to keep net metering in place.
The governor’s stance has advocates bracing for a battle as the legislative session winds down. They already are calculating that they will need a two-thirds majority in the Legislature to overturn an expected veto by LePage, assuming a bill is sent out of the energy committee this month.
“There was never any question in my mind, that was where we will need to be,” said Gideon, the assistant majority leader.
But Gideon said her first focus is on trying to win enough votes in the energy committee for the bill to receive a favorable recommendation to the full Legislature.
“Right now, we’re in education mode,” she said of the proposal. “It’s very complex.”