Maine Solar Companies, Utilities Agree On Alternative To Net Metering

Posted by Joseph Bebon on February 29, 2016 No Comments
Categories : Featured, Policy Watch

Maine legislators have announced a comprehensive bill to replace the state’s net-metering policy with a market-based program aimed at increasing the current amount of solar installed more than ten-fold by 2022.

Lawmakers say the bill is the result of a six-month stakeholder process, and the legislation is a compromise backed by a coalition of solar businesses, workers, municipalities, community leaders, utilities and other stakeholders. The bill comes as solar stakeholders and utilities in some other states continue to battle over net-metering policies, especially in Nevada.

According to a bill summary, the legislation would require Maine’s regulated electric utilities to enter into long-term contracts for 248 MW of solar by 2022; that compares to the state’s current installed solar capacity of about 20 MW.

The new program would be divided among four market segments: residential and small business, grid scale, community solar, and large commercial and industrial. The summary says that the program would use market-based mechanisms (or a proxy) to obtain the lowest-price, long-term contracts for ratepayers for each market.

The majority of the new solar procurements under the program would come from the residential and small business segment, totaling 118 MW of new solar by 2022.

Under this market, new customers would receive a 20-year contract at a set price for net exports (measured hourly) for solar PV projects less than 250 kW. They would have the option of installing a separate meter and selling the entire output of their facility, or using their generation to offset their own load and selling the excess.

Bill supporters suggest the new program would offer more certainty for solar customers. The summary says that unlike net metering, where the price may change depending on fluctuations in electricity prices or rate design, the contract price would be set by the Maine Public Utilities Commission (PUC) at a level high enough to meet the installation targets, subject to an overall cap on program cost. Customers would receive that price for 20 years, the summary says, adding that the contract price would step down over time as the level of installations grows and the cost of solar installations continues to decline.

Interestingly, the summary says existing net-metering customers would be able to choose between opting into the new program or staying under the current net-metering rules for 12 years after the new program takes effect.

From the grid-scale segment (projects up to 5 MW), utilities would be required to buy a total of 60 MW of new solar by 2022 under 20-year power purchase agreements. In addition, the bill calls for a total program procurement of 25 MW from the large commercial and industrial segment through reverse auctions, as well as a total procurement of 45 MW from the community solar market, also through reverse auctions.

Several Maine solar installers and state utilities have voiced their support for the bill.

“ReVision’s top priority is to ensure that residential and small business customers in Maine continue to have a fair opportunity to invest in solar and take control of their own energy future,” says Fortunat Mueller, partner and co-founder of solar installer Revision. “We think this legislation does that.”

John Carroll, spokesperson for utility Central Maine Power, says the bill “moves the debate into the next generation of clean energy production.”

“This proposal creates an opportunity for our customers to benefit from solar energy and help our environment,” adds Alan Richardson, president and chief operating officer of utility Emera Maine. “The proposal is the result of meaningful collaboration amongst stakeholders with different perspectives. We believe it represents a fair balance, and we are glad to support it.”

“Over the past six months, this group of stakeholders came together, bringing diverse perspectives to the common goal of developing a modern solar policy for Maine,” states Maine Public Advocate Tim Schneider. “Their hard work developed a solution that maximizes the value of distributed generation and will save ratepayers money.”

“It’s time that we update Maine’s approach to solar and other distributed generation resources,” says State Rep. Nathan Wadsworth, R-Hiram, the ranking Republican on the Energy, Utilities and Technology Committee. “We’re looking at savings of close to $100 million for ratepayers and job creation for our own Maine-based business.”

The bill summary says there would be a program review after 18 months, or 21 MW of capacity is installed, whichever is sooner. At that time, the PUC would conduct an evaluation to determine whether the residential and small business market segment is likely to meet its installation targets and reduce costs to all ratepayers. If not, and if the program cannot be revised to meet those goals, the summary says the commission would report to the state legislature.  If the legislature does not otherwise take action, the summary adds, net metering would be reinstated.

The complete draft bill is available here.

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