An Untested Solar Policy Without Net Metering Is A Recipe For Disaster In Maine

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There is a bill making its way through the Maine state house that could harm the emerging solar industry by making major concessions to monopoly utilities. Sound familiar? That’s because it’s a common theme in states across the nation. Sensible and proven market structures, designed to protect rooftop solar consumers and jobs, are constantly under attack from lobbyists and lawmakers who refuse to read the writing on the wall when it comes to forging a more sustainable energy future.

maine lighthouse shutterstock_302111207 (1)As usual, the target in Maine is net energy metering (NEM). Under NEM, Maine’s utilities currently provide fair one-to-one credit to customers on their bills for power they generate and feed back into the grid. There is no zeroing out your bill in Maine – everyone still pays a minimum access charge. Net metering is a proven policy in 42 states that protects consumer choice. But Maine legislators and the state’s anti-renewables Governor, Paul LePage — who recently endorsed Donald Trump for President — want to replace NEM with an untested version of a Value of Solar Tariff (VOST).

VOSTs are generally a “buy-all, sell-all” approach in which solar owners sell the energy they produce back to the utility for a certain price, and then buy the energy they need back from the same utility at a different price – often much more. This creates taxable revenue for the system owner, which potentially wipes out the benefit of the federal Investment Tax Credit or the benefit of the solar array altogether. Enacting a VOST while at the same time eliminating a side-by-side NEM policy could stop Maine’s rooftop solar industry in its tracks. Although the policy may have good aspects for large-scale businesses and other market segments, it would seriously jeopardize residential and small commercial investments.

As currently written, the Maine bill has far-reaching consequences that could devastate local solar companies. If passed, it would eliminate NEM, deny full grandfathering to existing solar owners, expose consumers to discriminatory taxes, allow monopoly utilities to throttle private investment in solar by controlling rates for a competitive product, and create extreme market instability and uncertainty. It would also shift the entire risk of the problem onto customers  – whereas NEM only eats into utility investor profits. Ensuring a smooth transition to a clean energy future requires keeping the stable policy of NEM as an option.

For an example of what not to do, Maine lawmakers would be wise to look west to Minnesota, where a battle over this same turf erupted two years ago. In the end, while Minnesota lawmakers created a VOST, it has yet to be implemented. Fortunately, legislators from Minnesota – the first state to adopt net metering – maintained net metering as an option for customers. Had the state not maintained NEM as a consumer option, the years of debate over the Value of Solar price and structure could have destroyed the Minnesota solar industry. Under a VOST-only system, utilities are no longer encouraged to provide a fair value to solar customers. That’s because without the proven policy of net metering in place, utilities have all the leverage to bog down regulatory processes and undercut solar competition.

NEM as a side-by-side option is the right choice for Maine. That’s probably why most major pro-solar stakeholders have filed joint comments in Maine endorsing a NEM side-by-side option, including NRCM, ReVision Energy, the Sierra Club, UCS, Insource Renewables, and many others. These groups thoughtfully and correctly suggested running NEM as a side-by-side option with the new program for a period of time, then reviewing the new program to see if it’s working. At that point, lawmakers can decide if further changes need to be made, or if a VOST, NEM, or both are worth continuing. This will ensure that Maine’s solar market continues to grow without risk to private investment and the economic security of both solar and non-solar customers.

Image via Shutterstock

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Peter Allen

is an independent media strategist based in San José, CA. You can read his many musings on Twitter @pjallen2.

Peter Allen has 29 posts and counting. See all posts by Peter Allen

12 thoughts on “An Untested Solar Policy Without Net Metering Is A Recipe For Disaster In Maine

  • Interesting divergence of views. Who to believe?

    • It actually seems to be a solidly written feed-in tariff. If you use your own solar power during the day, you pay nothing. If you save it in batteries and use it at night, you pay nothing. If you export excess during the day, the utility pays you a fixed rate which is guaranteed for 20 years. If you have to buy excess at night, you then have to pay the utility rate.

      Totally fair.

      The measurements are hourly, so they can’t scam you by using minute-by-minute peaks or anything stupid like that. This is simply separating daytime and nighttime costs. It’ll probably be great for the battery market.

  • OK, I don’t have all of the details, but, boy, this post from Fred Greenhalgh sounds like an obvious load of horse shit. It reads like a sleazy lobbyist wrote it.
    At the end of the first paragraph, there is an obvious lie, “….We are pleased that after a long process of bringing a number of stakeholders to the table – public advocate, solar installers, utilities – we have a policy that everyone supports.”
    I didn’t know whether to laugh or cry when I read it. So, “everyone” supports the elimination of net metering? Really? No.

    • I work at one of the solar companies (ReVision Energy) that was misrepresented in the article. I also have a solar job in Maine and would be personally affected by this policy.

      • Perhaps I was too quick to condemn your efforts. This subject may be too complex and nuanced for me to have comprehended, and passed judgement so quickly. I have read your (ReVision) article twice, and considered some of the respected commenters opinions here. Up until this point, my experience has been that if one reads that net metering is being eliminated or altered, it simply means that the utilities are trying to maintain their grip at the expense of the public. It is difficult for me to imagine utilities working with anyone in good faith.
        This, however, does appear to be a more unusual scenario. Quite a bit grayer than, say, Nevada. I was too quick to judge.
        So……. let me put it this way. While I don’t know enough to give blanket approval of your efforts in Maine, please accept my reversal of the above condemnation. I hope you are one of the good guys. And I hope I live long enough to see the full transformation of the grid.

        • It is so seldom I see a reversal of any point of view when confronted with facts that I must say I admire John Moore (whoever he is) knowing nothing about him. I begin to wonder if the comment section has any constructive value… In the spirit of his honesty and candor I also fear Mr. Moore might end up being more right than wrong, not about the writer but that the Utilities are in fact making public statements in agreement with the now Governor vetoed bill, based on back door understandings with the Governor and his Energy Office knowing they take little real risk but gain public support as the public monopolies they are, or at least have been.

          Facts are: solar works over time for all ratepayers, it does not work out so well (increasingly at an increasing rate – unstoppable) for the Utilities… Solar can be slowed by forces pretending to represent the public good, but tomorrow its vast store of energy will shine one more time and increasingly be harnessed by growing independent Mainers who also have a right to a return, not just an ongoing expense…

          Soon I will also operate an electric car with a 200+ daily mile range purchased for around 29K and will seldom need to purchase gasoline (or natural gas) again, but will fuel it with power generated from the Maine sun. Maine has pretty clean air, but burns too much fuel oil – this will also help, and save me money. Hear me now, believe me soon enough, this all matters and the trend benefits us all! Governor, please don’t protect us from this…

    • I own Insource Renewables, which was also mentioned in this article. Fred is far from a sleazy lobbyist, and he is correct in commenting that the solar companies in Maine support this bill. The author is partially correct in that the entities did sign a letter of support in January that supported the case of net metering running side-by-side with the alternative. As is often the case with policy, there were negotiations on key points and we were able to have some key mechanisms included in the bill that would provide the accountability we hoped that net metering would provide. It should be clarified that net metering is “paused” as a result of this bill and becomes the default policy should the solar goals in the bill not be reached. I hope that Peter can run an update to this article with this clarification. I have a letter here that was signed by 20 solar companies in Maine that express support for the bill. I am happy to share it with CleanTechnica.

  • It’s an FIT. The main difference with Germany and the UK as far as I can see is that these do not penalise self- consumption: the FIT applies to actually exported net output, not all solar production.

    The post is very one-sided. Unadjusted net metering is a crude, rough-justice policy that fails to adapt to falling solar costs as historic FIT schemes have done. Remember that the early FIT rates in Germany, the UK and Japan were far above retail, and in the former two are now well below. That looks good policy to me. Maintaining net metering as costs fall implies a growing subsidy to solar households, not a falling one. It rewards latecomers more than pioneers.

    The problem with FITs and VOST tariffs is the high risk of an opaque and politicised process. In Germany the original guiding target of a reasonable ROI was replaced by a target rate of installation; in the UK no discernible rationale has applied consistently.

    • Yep. This is a FIT which (a) applies only to ACTUALLY EXPORTED solar — if you use it yourself, you pay nothing (as you should), and (b) any income from this counts against the fixed grid charges on your bill.

      It’s actually a good deal.

      It doesn’t allow you to generate electricity during the day and count it against electricity used at night, but if you wanna do that, get a battery. Which is allowed — nay, encouraged — by this tarriff.

      Zach should check his article-writers better and get a counterpoint published.

      The best deal for someone under this tarriff, assuming they have the capital available, is to:

      (1) get enough solar to cover full anticipated needs

      (2) get enough batteries to cover anticipated nighttime usage, and fill them with the solar power, exporting only after that’s done

      (3) make money off sales of excess solar after the batteries are filled

      (4) still have access to the grid as a “backstop” at minimal charge in case of low-solar or high-usage days.

      This is exactly the right tariff.

      • Can we get that in Oz too please, it sounds so rational? 🙂

      • Well, I hope that in about two years someone will be able to report back that the new plan has been a screaming, howling, foot-stomping success.

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