A coalition of business owners and nonprofit groups urged Maine’s Public Utilities Commission on Thursday to delay major changes to a policy that allows the owners of small solar energy installations to receive credit for excess power fed back to the electric grid.
In April, the Legislature narrowly defeated a bill that would have changed how customers with solar arrays are compensated for energy they send back into the power grid. Failure to pass the bill means the PUC now must review and decide whether to change the policy – known as net metering – that allows homeowners and businesses to recoup some of the costs of installing solar energy systems.
But the installers of such systems – often called “distributed solar” because it is decentralized – as well as their supporters fear the PUC could further destabilize an industry heavily dependent on public policies that encourage solar development.
More than two dozen businesses and environmental groups – including eight solar businesses – sent a petition Thursday requesting that the commission:
• Delay any major changes to net metering in order to allow lawmakers and stakeholders to continue working on the issue.
• Make clear that any future changes will not affect existing net metering customers in order to allow the industry to grow in the meantime.
• Include both the costs and benefits of net metering – and the “full value” of solar energy – in any review.
“We know distributed solar provides excellent ratepayer benefits, predictability is critical to solar companies and users alike, and legislative action is forthcoming,” Dylan Voorhees with the Natural Resources Council of Maine said in a written statement. “So it seems sensible for the PUC to conduct a narrow review and stay the course, without changing net metering.”
Net metering has become a hot-button issue in Maine and across the country as the solar industry has surged, fueled by a drop in price for the technology and government incentives. While smaller users say the credits help them afford the costly installations, utilities contend that solar customers receiving credits for excess power are not paying their share of the costs of building and maintaining the massive electric grid infrastructure. Instead, utilities tend to favor larger, grid-scale solar installations.
Under Maine law, the PUC must review net metering rules when solar generation hits 1 percent of an electric utility’s total load. Central Maine Power crossed that threshold on a hot day last August.
The PUC has not formally opened a review of the net metering rules, so the group’s letter was a preemptive move. Commission spokesman Harry Lanphear said he expects the review will begin “in the very near future,” although he said he could not be more specific about the timing or how long he expects the review to take. The commission will solicit input from stakeholders – likely a large group – once the proceedings begin.
“We have the letter, we understand the concerns and we plan to conduct a review in the near future,” Lanphear said.
Supporters of the bill that fell just two votes shy of becoming law during the last legislative session have voiced concerns about how the PUC will handle net metering because all three commissioners were appointed by Gov. Paul LePage, a vocal critic of the policy. Yet it’s unclear how another solar policy bill would fare in the Legislature next year because of the November elections.
One of the petition signers, dairy farmer Caitlin Frame, said her business began exploring solar installation options this year in order to reduce energy costs and improve sustainability. Those plans were put on hold after the failure of a bill that would have implemented a new, alternative credit system.
“But now we cannot proceed with this project until we know where net metering will stand in the future in the state of Maine,” Frame, co-owner of The Milkhouse in Monmouth, said in a written statement.
After months of discussion, stakeholders produced a bill in the spring that would have replaced the current one-to-one credits offered to solar customers under net metering with long-term, fixed-price contracts. The bill, L.D. 1649, also aimed to increase Maine’s generation of solar energy from the current 20 megawatts to 196 megawatts over the next four years.
But LePage vetoed the solar bill on the grounds that the contracts could still increase electricity rates for all customers, who would effectively help subsidize solar installations on a small number of homes. And in a twist, two of the nation’s largest installers of rooftop solar campaigned against the bill because they feared the new, untested credit system would catch on in other states. Instead, Sunrun Inc. and SolarCity rolled the dice in hopes of protecting net metering during the PUC review process.
The sponsor of that bill, Democratic Rep. Sara Gideon of Freeport, said there is “no question that the Legislature will be taking up issues of solar policy” again next year. It is too early to say what, exactly, those policies will look like, but Gideon predicted some aspects of the failed bill will be incorporated into the revised product.
In the meantime, Gideon supports the group’s request to slow down or narrow the scope of the PUC review of net metering so stakeholders can have those discussions.
“Probably everyone can agree that policymaking belongs in the realm of the Legislature versus in a regulatory body like the PUC,” said Gideon, assistant majority leader in the Maine House. “So I think the request submitted today to the PUC to let the status quo remain … is probably the right thing to do.”
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