A proposal to limit incentives for homeowners is likely strengthened in wake of state and federal election results.
by Tux Turkel, staff writer
Portland Press Herald news story
Clean-energy advocates in Maine are seeking a path forward to save a controversial financial incentive for rooftop solar panels, following an election that might make it harder to overcome opposition from Gov. Paul LePage.
Generating power at home has broad public interest in Maine, for reasons that range from cutting electric costs to fighting climate change. Installing solar panels also creates jobs, and could bring economic activity to rural areas hit by factory closures. But LePage and others say solar homeowners are receiving a subsidy from the majority of electric customers who don’t have panels, and question why the industry still needs financial support when equipment prices have fallen sharply.
These opposing views have created a political divide that couldn’t be bridged in the last Legislature, and will face similar or even steeper challenges next year.
The divisions in Maine are happening against a national backdrop in which President-elect Donald Trump has spoken out against renewable energy and expressed support for fossil fuel industries.
Despite that, the solar industry is cautiously optimistic that the existing federal 30 percent investment tax credit for solar panels – which Congress voted in 2015 to fully extend for five more years – will stay in place. That’s because the solar extension was part of a bipartisan bargain which lifted a 40-year ban on crude oil exports.
Beyond that, some Trump-leaning states are embracing solar energy. The power grid operator in Texas, for instance, is projecting that the bulk of the state’s new generation over the next 15 years will come from solar.
Assuming the tax credit remains stable, the next-biggest incentive for solar is state-sponsored financial arrangements in which homeowners are compensated for the full retail price of generating power. The practice is called net energy billing or net metering. So what happens in Augusta over the next several months is considered crucial to the near-term growth of solar in Maine.
Last spring, a wide-ranging solar energy bill that was the product of a yearlong study and negotiations among stakeholders failed to become law. Supporters fell two votes short of overriding a veto from LePage, who relied on Republican allies in the House of Representatives to kill the measure.
This winter, a new Legislature will convene with a House in which Democrats maintain a slim majority, but where Republican have picked up three more seats.
Meanwhile, the Maine Public Utilities Commission has proposed changes to the net metering rule that would gradually reduce financial incentives over 10 years. Existing customers would continue to receive the full incentives, but only for 15 years.
The commission held a public hearing on its proposal in October. Residents who attended overwhelmingly opposed the rule changes. More than 300 interested parties filed written comments, many expressing views similar to this letter from Donna Busch, a resident of Union.
“I am writing to express my disappointment concerning the PUC draft changes to roll back solar net metering starting 1 Jan. 2017. Through net metering, thousands of homes, including ours, are able to produce their own solar power. Maine should be in the forefront of installing and using solar power to support local energy production, not lagging behind the rest of the region and the world. … Please leave net metering alone and allow the Legislature to institute a broad solar policy to benefit Maine’s economy, solar producers, and our precious environment – one of the greatest assets of this state.”
The PUC plans to make a final decision by year’s end.
LEGISLATIVE BATTLE AWAITS
Solar supporters are waiting to see the final PUC ruling. Whatever happens, Democrats plan to introduce at least one solar bill next year, although the specifics are still being refined. If, in their view, the PUC diminishes net metering’s current incentives, they will propose a law aimed at restoring the benefits.
To succeed, Democrats will have to convince enough Republicans that net metering in its current form is good for all ratepayers, and to override an expected veto from LePage.
“I don’t have a head count for Republican legislators who would vote for solar,” said Rep. Sara Gideon, D-Freeport, who will be speaker of the House next session. “But why be in lock-step with the governor in his last two years? There’s no advantage of doing that.”
Gideon said she plans to introduce at least one solar bill. Beyond preserving net metering, other proposals might pick up on last year’s efforts to craft new incentives to replace net metering while maintaining similar benefits for homeowners, as well as boosting solar in other sectors, such as commercial buildings.
LePage’s position will be championed in the Legislature by Rep. Ken Fredette, R-Newport, who has been re-elected House minority leader. Asked if he supports the PUC’s proposal, or would agree to keeping net metering as it is, Fredette offered a limited response.
“We have a lot of work to do this session and we look forward to having a positive conversation about solar,” he said.
Net metering is a decades-old rule that requires utilities to credit the bills of homeowners with roof-top solar panels for the full retail price of all the electricity they send into the grid. Those credits help homeowners recover the costs of solar-electric panels, which can average $10,000 or so. The credits continue to be paid as long as power is generated.
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, including LePage, say it’s time to trim the incentive. As solar’s popularity grows, they say, the credits are shifting the cost of serving homes with solar panels onto other customers.
Solar supporters dispute this point of view, and say net metering isn’t a subsidy. They say the value of this energy actually is greater than its cost. That debate is going on in states across the country, as utility regulators try to agree on how to value the power produced by thousands of homes.
In Maine, solar supporters know they need to focus their efforts on House Republicans. Vaughan Woodruff, owner of Insource Renewables in Pittsfield, said he will again try to convince lawmakers some of the layoffs at shuttered paper mills can be replaced with solar-installer jobs.
“This election showed the gap between urban and rural voters,” said Woodruff, who built a successful solar business in central Maine. “We have to make the case for what solar can do for our small communities.”
Dylan Voorhees, clean energy director at the Natural Resources Council of Maine, said a survey his group did earlier this year found 61 percent of Mainers want lawmakers to enact strong solar policies. The PUC’s proposal fails to do that, he said. Voorhees said the makeup of the incoming Legislature presents an opportunity to change some minds, especially with a solar bill that isn’t as complex and far-reaching as what was proposed last session.
“We were only two votes short,” he said. “That’s really close.”
Moderate Republicans, then, might hold the key to the future of net metering.
Sen. David Woodsome, R-Waterboro, said he thinks the level of compensation for homeowners should be reduced, but he still wants to encourage people to install rooftop panels.
“I don’t have a solution, but I’d like to see something worked out,” he said.
Woodsome has been co-chairman of the legislative committee that handles energy issues and is likely to retain that position next year.
During the debate last spring on the comprehensive solar bill, he and a Republican House member from rural Maine worked together to find a way to keep the measure alive. “We came close,” Woodsome said. “Maybe something like that can happen again.”