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home : most recent : statewide implications August 16, 2017

4/11/2017 12:05:00 PM
EDITORIAL: Gov. Holcomb should take a hard look at the evidence before signing solar bill


Jacqui Bauer doesn’t have to wait to see what the impact will be of a bill passed by the Indiana General Assembly this year that reduces incentives for private investment in small solar power generation.

Bauer, sustainability coordinator for the city of Bloomington, said she’s already seen it in responses to Solarize Bloomington, a program offering local residents and businesses an opportunity to install solar systems on their properties at a discounted cost.

She said hundreds of people attended information sessions this year about the program, a collaboration between the city, the Bloomington Commission on Sustainability and the Solar Indiana Renewable Energy Network (SIREN), a solar advocacy organization. A couple of hundred of those people subsequently signed letters of intent to install solar systems.

Then, as Senate Bill 309 advanced through the Legislature, Bauer said there were two reactions: People either tried to have their systems installed as quickly as possible or they held off, uncertain what the legislation would do to the cost calculations they had made about the wisdom of a solar investment.

She expects passage of the bill will create a mini-boom for the solar industry this year, but after that, Bauer isn’t sure what will happen.

SB 309, authored by Sen. Brandt Hershman, R-Buck Creek, could be on the governor’s desk by the end of the week. Environmental groups and solar advocates already have started a telephone and email campaign to encourage Gov. Eric Holcomb to veto the bill, calling it anti-jobs and anti-technology.

The measure makes substantive changes in what is known as net-metering, a program that allows small renewable energy generators to send excess power to the transmission grid of an investor-owned utility in exchange for a credit on energy they take from the grid when power from renewable sources (solar and wind) is not available. Electricity flowing both ways now is credited at the retail rate charged by the utility.

The bill essentially ends net-metering in 2022. After that point, any small power generator that sends power to the grid will be credited at the wholesale rate, plus a 25 percent premium. Existing systems will be grandfathered at the higher retail rate for 30 years; the bill provides a shorter grandfathered period for systems installed after Jan. 1, 2018, and before July 1, 2022.

The lower the compensation rate, the longer the “pay-back” period to recoup an investment. Bauer said under the current rules, a home solar system has a pay-back period of between 10-15 years. Obviously, the math isn’t going to work as well for homeowners, schools or small commercial installations once SB 309 goes into effect, which will be July 1 if signed by the governor. Hence, the chilling effect on the state’s solar industry that bill opponents fear.

Those opponents have made more convincing arguments to keep net-metering in its current form than supporters — utility companies and their lobbyists — have made to change it. State Rep. Matt Pierce, D-Bloomington, a member of the House Utilities, Energy and Telecommunications Committee, has called the bill “a solution in search of a problem.” We concur and would encourage the governor to take a hard look at all the facts before signing it into law.

One of the documents he should review is the annual net metering summary that the state’s investor-owned utilities are required to file with the Indiana Utility Regulatory Commission. It shows the positive impact that net metering has had in the growth of small, renewable energy systems, particularly solar.

After the Legislature in 2011 expanded net metering to all classes of utility customers, installed solar capacity jumped from less than 1 megawatt to 15.4 megawatts by the end of 2016. There also was significant, though lower growth in small wind generation systems, from less than half a megawatt to 4.4 megawatts. For Duke Energy Indiana, the 2016 report shows total installed capacity in net-metering systems of 9.4 megawatts involving 507 total customers. The bulk of those customers — 412 — were residential, according to the IURC report.

Despite such growth, the overall capacity of net-metered systems is miniscule, compared to the large, investor-owned utilities. The IURC calculates the total installed capacity of net-metered systems at 0.12 percent of the peak summer load of the utility companies. For Duke alone, the percentage was a bit higher, 0.16 percent, but still negligible.

It is hard to believe the state’s utilities are so damaged by such a small number of renewable energy systems plugging into their distribution network that they required relief from the Legislature. SB 309 directs the IURC to examine the rates utilities charge net-metering customers for backup power, as well as pay for the power that flows into the grid from those customers.

If there is an imbalance in the system, it is there the utilities should seek correction, and a future Legislature should take notice of what the commission finds.

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• Bill could eliminate financial incentive for Hoosiers to install solar panels
• Madison County approves solar park as revitalization area
• EDITORIAL: Senate Bill 309 helps power companies, not Hoosiers
• IKEA Fishers to install massive solar array
• Indiana tech execs urge veto of net metering elimination
• Elkhart County solar proponents fear bill could hurt fast-growing industry
• Solar power users in Elkhart County - many Amish - seek self-sufficiency, care of creation
• Not all solar producers concerned about Indiana Senate bill
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• Indiana solar power advocates urge veto of legislation eliminating net metering

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