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Business and Economy

Maine official warns community solar projects might not be as 'clean' as they suggest

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Dave Kolpack
/
Associated Press/via Bangor Daily News

So you signed up to participate in one of the new "community solar" projects that are popping up around the state, and feeling pretty good about using renewable energy. Not so fast, though. One state official says the program's structure can result in customers consuming more fossil-fuel energy than before, potentially undermining Maine's green energy goals.

Since lawmakers authorized the community solar program in 2019, thousands of Maine residents and organizations have signed up to make payments that help finance the development, construction and operation of midsize solar power plants. In return, they will receive per-kilowatt-hour credits on their electricity bills that should save them money overall.

But Andrew Landry, deputy director of the Maine Office of the Public Advocate, had a counterintuitive message for lawmakers last week. The electricity that subscribers to the community solar credit program actually receive "is more dirty than the power you get from the grid," Landry said.

It's bit of a brain teaser, but here's how Landry's analysis works. When a megawatt of electricity is created from renewable sources like the sun, it has two valuable attributes: one is the energy itself, which is sold into the regional grid at the going rate. The other is what's called a renewable energy certificate, or REC, which the developers can sell to the highest bidder.

The bidders usually are energy suppliers — middlemen who have to make sure the mix of electricity they sell to retail consumers meets state clean energy standards.

But when a community solar developer strips the RECs and sells them on the open market, the electricity itself from the project no longer qualifies as renewable energy.

"As a result there's no certainty that when you participate in the (solar credit) program that you're getting renewable energy. In fact if the developers are not doing anything to back that power with renewable attributes," he says, "then the power that they're buying is not as clean as the power they would get if they simply stayed with the standard offer or with a competitive supplier."

In other words, while the solar subscribers are helping increase the supply of clean energy that's put on the grid, they may also be increasing their own dependence on electricity that isn't subject to the renewable standards.

Other energy experts in Maine agree. But they also emphasize that over time, every addition of new renewable energy sources to the grid will help to displace fossil fuel sources.

"When a new solar project is built in Maine, the electric grid becomes cleaner than it otherwise would be, and it doesn't matter where the RECs go, who buys them or who retires them — the grid is cleaner," says Richard Silkman, a competitive energy supplier in Portland.

Silkman says he has counseled some community solar developers to make sure their marketing materials don't mislead subscribers into thinking they are procuring renewable energy to serve their own needs, but rather just helping to increase overall green energy supply.

But Landry says the issue is bigger than messaging. With hundreds of megawatts of solar capacity potentially coming online under the new program, he says, the state's efforts to significantly expand renewable energy consumption is in danger.

"It does increase the amount of clean energy that's produced in Maine, but it reduces the amount of clean energy that's consumed in Maine. You have to have both sides of the equation or else you don't meet your clean energy goals," he says.

Landry has submitted a bill to the Legislature that could require community solar developers to keep the RECs with the electricity they produce or buy them on the open market.

That's getting pushback from community solar developers and their advocates, like Jeremy Payne, executive director of the Maine Renewable Energy Association. He says community solar developers are relying on the sale of RECs for 20-30% of their revenues.

"I guess the assumption is, 'Oh they'll just figure it out.' The answer is no, they won't. Projects will fail, deals will crumble. And I think what it also does is call into question how serious is the state about its clean energy transition," he says.

Payne notes that lawmakers already put brakes on the program last year, after utility regulators warned it was growing so fast it could throw tens of millions of dollars of new costs onto nonsolar electricity consumers. That shook the financial community's confidence in Maine as a reliable place to invest, he says. More retroactive policy making he says, would make matters worse.

"It's ridiculous. There are lots of things that you learn through the course of seeing policy implemented and functioning. What you've seen other states do is they've applied those lessons to the next iteration of the policy," he says.

Landry says he has no doubt that the next time the state creates a new program to encourage renewable energy, it will address both the production and consumption sides of the equation.

Meantime, though, he believes the community solar developers have a big enough revenue cushion to absorb the bill's potential costs. Legislative leaders last week declined to send the measure to committee, but they didn't quite kill it either, leaving its fate in the shortened legislative session an open question.