Battle lines are being drawn for a fight over the future of rooftop solar energy in Maine, as the Public Utilities Commission prepares to hold a hearing Monday in Hallowell on proposed rules that would cut financial incentives for homeowners with solar panels.
Similar fights are taking place across the country, as utility regulators and politicians try to define the value and benefits of small solar-electric installations, as well as who should pay, and how much, to help expand their use.
The outcome of these skirmishes matters because thousands of jobs are tied to these home-scale installations, and shifting policies about compensation have led many residents to put off investing in solar. Maine installers say that began happening last spring, after the Legislature failed by two votes to override Gov. Paul LePage’s veto of a bill that would have restructured the financial incentives.
What’s happening this fall at the PUC is likely to be only a prelude to a rematch next year in the Legislature. Clean-energy advocates are talking about drafting another bill, all but assuring that the matter won’t be settled in the near future.
At issue is a decades-old rule that requires utilities to credit the bills of small energy generators for the full retail price of all the electricity they send into the grid. Those credits chiefly help homeowners recover the investment in solar-electric panels, which can average $10,000 or so. They continued to be paid as long as the power’s being generated.
This arrangement, called net-energy billing or net metering, was set up in the 1980s to help jump-start solar when the technology was new. But panel costs have fallen sharply in recent years, and utilities and some policymakers say it’s time to trim the incentive. As solar’s popularity grows, they say, the payments are shifting the cost of serving homes with solar panels onto other customers.
Last month, the three PUC commissioners – all appointed by LePage – proposed a change that would grandfather net-metering credits for 15 years for residents who already have solar panels installed at their homes, and limit benefits for new solar owners to 10 years.
DISPUTING VALUE OF HOME SOLAR
The PUC review was triggered by a requirement that net metering be revisited once peak solar power production hit 1 percent of Central Maine Power Co.’s installed capacity. But reducing the net-metering incentives drew immediate fire from solar installers and clean-energy supporters. They countered that the value of this energy actually is greater than the cost of service. And they pointed to a study done for the PUC in 2015, and updated last summer, to prove it.
The updated study concluded that the value of distributed solar – power produced near its point of use – is worth roughly 27 cents per kilowatt hour over 25 years. In Maine, the average home electric rate today is less than 16 cents per kilowatt hour, so solar advocates see a clear benefit.
But teasing out the components that contribute to that 27-cents figure paints a more-complicated picture. The PUC’s consultant found that just over 17 cents of the total value was from avoiding “market costs,” largely by not needing power from large generators. The other 9 cents or so were “societal benefits,” linked to emitting less climate-changing carbon dioxide and pollutants into the air.
In testimony filed Wednesday, Portland-based ReVision Energy, the state’s largest solar installer, reiterated its view that the cost-shifting claim isn’t supported by the study. It also criticized the PUC for proposing changes to net metering before any investigation of the facts.
“The failure to fairly, fully and rigorously evaluate the overall impact of net metering delegitimizes the proposed rule and this proceeding,” ReVision said. “The commission has made critical findings of fact and proposes to fundamentally change the existing, legislatively approved rule based on these findings – yet there is no sworn testimony in the record.”
Responding to this criticism, PUC spokesman Harry Lanphear said the commission laid out its reasoning in a notice of rulemaking last month. In it, the commissioners acknowledged that net metering supports state energy policies to promote renewable, clean electricity supplies, and that there may be environmental values to ratepayers. But they added that “programs that involve the cross-subsidization of ratepayer funds among customer groups should be reviewed periodically,” especially when the cost of the technology is falling sharply.
CMP is expected to amplify that point Monday. John Carroll, a spokesman, said the cost of rooftop solar has fallen by roughly half over the past decade, yet it’s still being subsidized at the same level as it was in the 1980s. He said CMP gets little benefit from rooftop solar because the values cited in the PUC study are largely tied to generation and energy supply, not to the cost of delivering power to homes. CMP contends that the cost of crediting solar homeowners shifted $1.3 million in expenses to other ratepayers in 2015, although solar advocates say CMP hasn’t substantiated those figures.
CMP has hired an expert witness to testify about the value of solar. Ashley Brown is a former Ohio PUC commissioner and executive director of the Harvard Electricity Policy Group, which studies power issues. He is expected to make a case for why net metering should be discarded and replaced with market-based pricing.
LePage, through his Governor’s Energy Office, will make a similar plea. The office has filed comments that say the PUC’s proposed rule should be scrapped. A system should instead be adopted that uses CMP’s smart meters to compensate small generators for the value of their power in real time, because costs vary hour by hour.
The office wrote: “During the duration of the proposed rule that extends through 2040, there are companies proposing the colonization of another planet – yet the proposal is stuck in 20th-century thinking and fails to utilize modern metering technology that has already been deployed across the state.”
SOLAR DEBATE IN OTHER STATES
These opposing views, in various forms, underpin the debate nationwide. The Solar Energy Industries Association website has posted links to cost-benefit studies from 17 states that are studying or have examined the value of solar. They include California, Arizona, Nevada and Hawaii. Various interest groups and think tanks also have weighed in with national studies.
But in Maine, as elsewhere, value studies are ammunition for larger political battles. In their filed testimonies, clean-energy advocates such as ReVision, the Natural Resources Council of Maine and SunRun, a national solar installer, urge the commission to hold off on any rule change and let the next Legislature set solar policy.
In a recent email message, ReVision also encourages its supporters to vote for candidates who will advance solar.
“We are confident that Maine’s Legislature can do the right thing for solar,” ReVision says, “and we will work to make the facts clear despite ongoing campaigns of misinformation and bullying on the side of anti-solar advocates.”
Tux Turkel can be contacted at 791-6462 or