PUC Approves Revised Solar Power Incentives

Feb 1, 2017

State regulators Tuesday approved new rules for the incentives received by Maine residents who install solar-power systems.

The Public Utilities Commission’s plan won’t take effect until next year, and in the meantime, the latest action is getting a thumbs down from lawmakers and solar advocates who support strong incentives and from those who want smaller ones, including Gov. Paul LePage.

The existing rules center on what’s called “net energy billing” or “net metering,” which give small energy producers — think rooftop solar panels — a credit when they create more electricity than they need and put that energy back on the grid. But over the last year, debate has grown over whether the rate they get for that excess energy is too generous, shifting unfair costs onto all electricity customers.

The commission is now offering a revised version of a plan to phase out the net metering system over 15 years. Commissioner Carlisle McLean says the goal is to make sure solar power generators are still able to recoup their upfront costs over a reasonable time period of 15-20 years, while taking into account steady reductions in the cost of new solar panels.

“The cost to install is declining. In the face of that news, as a regulator I am striving to keep the subsidy incentive as low as it can be while still achieving its intended aims of incentivizing renewable, indigenous generation,” she says.

Existing solar power generators and homeowners who install the systems through the end of this year will still receive the full retail rate for excess electricity — a rate that is expected to rise over the next several years. Under the new rule, compensation for installations made after this year will be reduced by 10 percent annually, until the rate is the same wholesale rate that big electricity generators receive.

Advocates for growing solar power’s presence in Maine say the new rule will at best keep the status quo, and Maine will continue to lag the rest of New England in the adoption of solar power.

“Holding people’s benefit from solar flat seems like a very narrow and distorted goal,” says Dylan Voorhees, clean energy director at the Natural Resources Council of Maine.

Voorhees says the Commission fails to recognize that small solar power generators actually provide value to all ratepayers. And, he says, by grandfathering solar systems installed by the end of this year but reducing credits after that, the commission will create short-term demand but long-term uncertainty.

“Solar companies who in normal times might react to increased demand by hiring more Mainers are not going to hire more Mainers, because there’s a cliff coming,” he says.

LePage doesn’t like the Commission’s action either. In a press release, he says the commission will force ratepayers to subsidize solar generators at rates far above fair market for the next 25 years — while Mainers are already burdened by the 11th highest electricity rates in the nation.

Legislative leaders, meanwhile, say they hope to enact a comprehensive fix for the PUC action. But prospects could be dim: LePage vetoed a comprehensive solar reform bill passed last year.