by Dylan Voorhees, NRCM Clean Energy Project Director
Senator Thibodeau and Representative Fitts,
Thank you for the opportunity to provide written testimony on this legislation. I strongly urge you to pass this bill and continue this committee’s recent unanimous support for the small renewable program. It would be unfortunate for the people and clean energy businesses of the state if a legislative drafting error cut short this program four years before the committee had intended for it to end.
In 2009, this committee and the entire Legislature unanimously passed legislation (LD 220) to extend this rebate program for small solar and wind projects until December, 2015. It was scheduled to expire in 2010. The original bill also would have increased the size of the rebate fund, which is perennially underfunded in relation to demand. The committee decided not to increase the fund, but to extend it into the future. One of the principle reasons was to provide further continuity to the small but burgeoning business sector of clean energy installers. Unfortunately other legislation passed that year overwrote this change in expiration date and the program ceased last December.
When the Legislature passed LD 220 in 2009, small renewable installers thought they had achieved a reasonable degree of certainty about the level of demand for their work for the next several years. They made investments in equipment, training, and employees. Making Maine more business friendly should include some basic consideration of these business decisions and not include pulling the rug out from under them.
This is precisely the sentiment expressed by Governor LePage’s spokesperson, Dan Demerit, in response to a suggestion to put a moratorium on wind power: “Once rules are established, businesses are going to be able to count on them, and they can expect the state to abide by them. There will be no moving targets in the LePage administration.” ( There are several different types of public benefits from an incentive program for small renewables. First on our minds are environmental benefits. Small renewable power generation directly displaces fossil fuel generation and the associated emissions. Solar thermal projects are most often displacing oil burning boilers. These benefits are commensurate with the scale of projects and with the program, which are admittedly smaller than we would prefer. But they are real and part of the strategy Maine needs to reduce pollution. They fit nicely with energy efficiency, which must be our highest energy priority. (Incidentally, distributed renewables have nearly the same effect on the grid as energy efficiency—a PV panel reduces power plant generation “at the margin”, usually natural gas, when the sun is shining. A CFL or efficient motor reduce the same power plant generation, at the margin, when they are actually operating in the place of an inefficient piece of equipment.) As several others testified, this incentive program also provides economic and job benefits. There are dozens of small renewable installers in Maine, some of them with dozens of employees, and many of them have grown as a direct result of increased demand for equipment. In fact, the most recent rebate levels spurred private investment at a ratio of nearly 10:1 (ten dollars of private investment for each dollar of public incentive.) That’s a good economic return. Reducing our use of heating oil, which solar thermal projects usually do, reduces the flow of money out of our state to buy fuel and turns those dollars around into our own economy. Projections are significant for further growth in solar jobs in Maine—as much as 30% in the coming years by some estimates. Many of Maine’s university and colleges are very excited about the prospects for training the next generation of workers for clean energy jobs, from the Northern Maine Community College to the Kennebec Valley Community College. Without local markets, these programs will train our young people simply to see them migrate south to states with strong renewable programs. Finally, small renewables provide energy benefits to Maine. They provide direct benefits to the program participants who invest a significant amount of their own money for the renewable systems. The cost-effectiveness of these technologies varies significantly and depends heavily on the context. We believe consumers are generally able to determine whether or not a renewable system makes sense for them financially, although we believe the Efficiency Maine Trust should require strong standards, including of installation and performance. If a customer chooses a system with a 20-year payback, that’s one thing. But no one wants underperforming systems or sub-par installations. Perhaps more important from a public policy perspective, the use of distributed generation provides energy benefits to ratepayers because they lower the total costs of our energy system, including transmission and distribution costs, over the long-term. Distributed generation—especially when production coincides with peak load, as solar does—incrementally reduces the need for and costs of upgrades to our system. It is difficult to measure this benefit in an agreed upon, quantifiable way. However the proceedings around the Maine Power Reliability Project, CMP’s large transmission upgrade proposal, revolved in large part around this fact. The final settlement agreement, endorsed by CMP, the PUC, Public Advocate, IECG, NRCM and many others, included distributed solar generation to provide exactly this benefit to ratepayers. Solar rebates provide this benefit on a smaller scale (and at lower public costs.) We recommend the committee charge the Efficiency Maine Trust with specifically reporting on the costs and benefits of the small renewable rebate program, including those that are difficult to quantify, in order to evaluate the program over time from a policy perspective. It is important to keep this program in perspective. It is a modest program and we do not mean to oversell the magnitude of the benefits. But it is providing real benefits for businesses and energy consumers that make it worthwhile. It would provide larger benefits if it were increased. We appreciate that the program has a cost for ratepayers. The ratepayer cost of this program is almost too small to measure—it may actually be small and positive, due to the T&D benefits over time—but the direct rates impact is much less than 1/100th of a cent/kwh. Eliminating this program would be pound foolish and, maybe, 1/100th of a penny wise. Please pass this legislation and keep Maine moving in the direction of a more affordable and sustainable energy future. Thank you.
