Future of Solar Power in Maine Hinges on Negotiations

Feb 11, 2016

Advocates of solar power in Maine, and around the country, are taking steps to preserve a financial incentive they say is critical to the continued growth of the industry.

In Maine, key players are crafting an agreement they hope to sell to the Legislature, but the proposal is exposing a rift between local solar businesses and Big Solar.

Sara Gideon of Freeport wants to bring more solar power to the state’s energy mix, which she says will save money for all electricity users at the same time.

“Growing our production of solar energy in Maine is really the goal that I am looking for,” says Gideon, the assistant House Democratic leader. She has been at the center of negotiations between solar installers, utilities, environmental groups and the state’s public advocate, who is charged with protecting the interests of all electricity rate payers.

They’ve agreed to encourage the build-out of new solar capacity in Maine to reach 250 megawatts over 5 years. That’s almost 15 times as much solar power capacity as the state has now.

It would also encourage installation of large industrial solar arrays and grid-scale solar plants by allowing them to enter long-term energy contracts.

“Really, we are all driving towards the same thing. It’s just a matter of understanding what is a complex issue,” Gideon says.

And some of the complexity has to do with a debate over “net metering,” in which residential users with solar arrays can get paid for any power they supply back to the grid.

Maine’s solar capacity has grown to the point that regulators are now reviewing the state’s net metering policy. Stakeholders behind the new plan are hoping that Maine does not follow the example of Nevada, which recently decided to do away with net metering, a move that threw the industry there into turmoil.

Tim Schneider is the state’s public advocate, and he’s drafting the proposed legislation that would require the PUC to set a price that’s sufficient to ensure the continued economic viability of the industry. He says the idea is that the owners of rooftop solar arrays shouldn’t see much difference in what they are paid for energy they put on the grid, and that will ensure continued growth over the next 20 years.

“Because the targets were based on net metering, based on the assumption that net metering would continue, I think it will be challenging for those prices to be significantly lower than retail,” Schneider says.

At least in the initial years. Over time, as solar technology becomes less expensive and as more and more is put on the grid, the price generators get could drop, but still be a good deal for them. And in case it isn’t, the new plan would require regulators to review prices every six months, and boost the price if necessary.

Utilities like Central Maine Power and Emera say that the existing net metering policy is unfair, because when solar generators put power back on the grid, they benefit at the expense of all ratepayers, whose bills pay for upkeep and administration of the transmission lines.

CMP calculates that the cross-subsidy, as it’s called, grew from $860,000 to $1.3 million in 2015.

“I don’t know if that sounds like a lot of money to people or not,” says John Carroll, a spokesman for CMP. “It’s $1.3 million of lost revenue that would have gone to pay for maintaining our lines, trimming the trees, building new equipment, that we will need to recover from the rest of the customer base.”

But some don’t buy the utilities’ arguments.

“The electric utilities in Maine want to kill net metering because rooftop solar equals the rooftop solar industry, and rooftop solar is the only competition that utility monopolies have seen in 100 years,” says Chris Rauscher, a lobbyist for SunRun, one of the big, publicly-traded solar power companies that lost business when regulators wiped out net metering in Nevada.

Rauscher helped deliver a petition with 4,000-plus signatures to the Maine Legislature this week calling for net metering to stay in place, even while the new pricing proposal is tried out as an experiment.

Some of the stakeholders argue that kind of “side by side” regulation would just dilute the effectiveness of the new plan. But Fortunat Mueller, CEO of Maine’s largest residential solar company, ReVision, says he’s keeping an open mind.

“The higher confidence we have that the new program will be successful and is designed in a way to be successful, the less important the side-by-side is for us,” he says.

Mueller is waiting to see how all the details pan out over the next few weeks before he gives a final yes to the plan. Then the question will be whether the stakeholders can stay unified while it goes through the Legislature.

Correction: An earlier version of this story incorrectly reported Maine would like to grow its solar capacity to 250 megawatts over the next 20 years. Maine would like to reach that capacity in 5 years.