Amendments relax restrictions on net metering, but solar
advocates remain flustered
Despite changes to the regulations proposed to Senate Bill
309, solar advocates remain wary of State Sen. Brandt Hershman’s legislation.
Last week the Senate Utilities Committee convened to vote on
SB 309, which includes sweeping reforms that solar advocates argued could have
removed many of the benefits associated with homeowners adopting their own
solar arrays. The day of the meeting, amendments were introduced to the bill
that eased some of the restrictions previously posed against the renewable
energy industry, but opposition to the bill remained concerned.
Sen. Michael Delph introduced the amendments to SB 309,
which relaxed some of the restrictions proposed in the first version of the
legislation. Since the amendments were introduced, the proposal passed out of
the Senate Utilities Committee after an 8-2 vote.
With the amendments, those who already have solar arrays in
place will receive the present retail rate for their excess energy for another
30 years. Those who adopt renewable energy technology over the next five years
also receive a higher retail rate for energy sold back to the utility companies
until 2032. After 2022, should a consumer construct his or her own renewable
energy infrastructure, the incentive shrinks even more.
But still, when these deadlines are reached, clean energy
advocates worry that the industry still will suffer greatly.
“When I export energy if this bill is law, the exported
energy won’t be reimbursed at a one-for-one rate (after the deadlines are
reached),” said Chris Rohaly, the president of the solar panel construction
company Green Alternatives. “It will be credited at what they call the avoided
cost, which is, from a utility perspective, either I can buy from the coal
plants or I can buy from a private solar array. That’s down to about three
cents per kilowatt per hour, approximately.”
At three cents per kilowatt an hour, the rate after the
deadlines is reached is much lower than the 10 or 11 cents, depending upon
location in Indiana, that is the present market rate. So, when that rate takes
place, a large savings incentive is lost to solar users.
Additionally, the amendment also altered the percentage of a
grid’s total energy that could originate from renewable energy. Before, a cap
was set at one percent. When one percent of a grid’s energy came from renewable
energy, anyone above that limit would not be eligible for net metering. Under
the amendment, the cap increased to 1.5 percent.
Again, solar advocates worried about the cutoff’s impact on
clean energy industry growth.
“That extension only applies as long as we are under that
1.5 percent cap,” said Rohaly. “As distributed energy grows in popularity, it’s
quite possible that cap will be met well before the extension order runs out.
Right now that’s whatever comes first … I will say Indiana is really low there
as well. For instance, I just found out that in West Virginia, they just
reduced their cap to three percent. They’re still twice what we are. Our
neighbors I believe, Illinois and Ohio, are five percent. We’ve got a very low
cap.”
In last week’s meeting, Hershman defended his bill
vehemently.
Primarily, he argued that the extensions the amendments
provide are generous and that five years is time enough for those seeking to
adopt the technology.
He also claimed that if net metering persisted, it could
have a negative impact on the prices for utility users.
“Yes, there is a reason not to do this forever and at this
rate because, as it grows, the subsidy that was demonstrated by these
independent authorities grows to a point where it will have a negative impact
on rates for all consumers,” said Hershman during the hearing. “Not only
residential but industrial as well.”
The Hoosier Environmental Council, which already expressed
displeasure with Hershman’s proposal, also issued the following statement after
the proposal passed out of committee.
“Governor Eric Holcomb made innovation one of the central
themes of his State of State Address.
Gov. Holcomb has made fostering
entrepreneurship a central priority of his new Administration. Those priorities
— innovation and entrepreneurship — are presumably ones embraced by his Indiana
State Senate counterparts. But those priorities are not reflected in the
amended version of SB 309.
“This bill, without any disclosed, objective,
Indiana-specific study to justify this enormous change in policy, worsens the
investment landscape for rooftop solar by forcing an arbitrary reduction in the
value that our electricity grid assigns to solar energy and enabling the
possibility of utilities imposing a new fixed fee on customer-owned solar
generation; these concerns remain even with the amendment in Committee today.
“SB 309, if adopted into law, may well have long-term
impacts in terms of deterring investment in solar energy by both homegrown
entrepreneurs and those who may otherwise see Indiana as a promising investment
destination for solar. The most constructive way forward is for the Indiana
State Senate to call on the Indiana Utility Regulatory Commission to do a study
that transparently assesses the benefits and costs of solar and offers
recommendations on changes needed to Indiana’s solar energy-related policies in
order to ensure that our state is at the forefront of welcoming solar
entrepreneurs and advancing solar innovation.”
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