Photographer: Boston Globe via Getty Images

Solar Debate Heads to Cold, Foggy Maine, Where Panels are Scarce

  • Debate over net metering policies have national implications
  • `Everyone is watching what happens in these small states'

Despite long winters, a famously foggy coastline and relatively few solar panels in operation, Maine is emerging as a pivotal U.S. state for determining how consumers will pay for power generated by the sun.

QuickTake America’s Power Grid

U.S. solar installations have boomed more than 10-fold in the past five years, driven in part by a policy known as net metering that requires utilities to pay their customers for extra solar energy from rooftop panels. That’s lowered consumers’ monthly bills, and also cuts into revenue for utilities that still must contend with their own fixed costs -- spurring conflict between traditional power companies and solar providers.

Lawmakers in at least 17 states, from New England to the Sun Belt, are now considering changes to the economics of rooftop power, and the industry is watching every debate closely. Maine has proposed replacing net metering with a system that lets utilities sign 20-year contracts with residential solar customers. And instead of paying the retail price, as called for under current policies, utilities would pay rates set by regulators.

“Everyone is watching what happens in these small states, since they’re on the forefront of this issue,” said Autumn Proudlove, senior policy analyst at the North Carolina Clean Energy Technology Center.

The debate in Maine kicked off in June, after customers had installed enough rooftop panels to account for 1 percent of peak demand, triggering a review. Lawmakers ordered regulators to work with solar companies and utilities to develop alternatives.

While the state ranks in the bottom third nationally in solar capacity with just 13 megawatts of installed capacity at the end of last year, the effort drew significant players. The Alliance for Solar Choice, a national pro-solar group, flew representatives to the meetings. Sunrun Inc., a San Francisco-based rooftop installer that has no operations in Maine, and the Edison Electric Institute, the utility-industry’s lobbying group, also participated. That led to the proposed new legislation, which was introduced in February.

The measure has been endorsed by more than a dozen Maine rooftop installers, including Portland-based ReVision Energy, the biggest in the state with 130 employees.

“Our goal in Maine is to try not to have the same fight that is happening everywhere else,” said Fortunat Mueller, a ReVision partner.

Installers said the economics work out in their favor, primarily because long-term contract would eliminate uncertainty for solar customers.

‘Predicability’ is Key

“For our clients, predictability is really key,” said Vaughan Woodruff, owner of Insource Renewables, based in Pittsfield.

The Alliance for Solar Choice does not support the measure, saying it should include the option of net metering. Otherwise, the group says, the measure may put outsized control in utilities’ hands.

“You’ve got the utility lobby trying to absolutely strangle rooftop solar in its crib by attacking net metering,” said Chris Rauscher, Sunrun’s director of public policy and a spokesman for the Alliance for Solar Choice.

Efforts to roll back net metering in large solar states have drawn outcry, notably in Nevada. In December, regulators approved changes to the state’s net metering policy, reducing the amount people get for selling electricity from rooftop systems and raising a monthly fee. Sunrun and SolarCity Corp., the biggest U.S. rooftop installer, folded operations in Nevada after the changes took effect Jan. 1, saying the new policies made their offerings economically unviable.

While rooftop panels are an increasingly common sight in sunny California, Nevada and other parts of the country, they remain new territory for regulators in many states and lawmakers are looking for models.

New Hampshire is reevaluating net metering after its largest utility, Eversource Energy, in January reached its cap for how many customers it was required to allow into the program. Last week, the state’s House of Representatives passed a bill that would raise the cap and direct regulators to develop alternative ways to compensate people. Eversource has pushed to revamp the system, which it says lets solar customers avoid paying their fair share to maintain power lines and other electrical infrastructure, driving up prices for everyone.

“If you are getting a net-metered rate, all the customers who don’t have solar are paying for that,” said Lauren Collins, a spokeswoman for Eversource, which serves Connecticut, New Hampshire and Massachusetts.

The state senate in January lifted that cap by 25 megawatts, giving regulators time to work out a long-term solution. Solar companies say that’s not going to help much.

Solar Crossroad

“We could be at another crossroad in a matter of months,” said Bill Murphy, general manager of SunRay Solar LLC, which cut 9 of its 27 employees in January after Eversource said new net metering applicants would be placed on a wait list. He expects that to stifle demand unless the state devises a better long-term program.

Similar debates are playing out in Louisiana, Massachusetts and Iowa. In New York, regulators are working to replace net metering with a market mechanism that would pay solar customers fluctuating rates based on when and where power is needed. Regulators in California, the nation’s largest solar market, decided in January to uphold its net metering policy, handing solar companies a key victory.

Despite all this, solar is expected to continue growing.

“You’re going to start to see more penetration in states that were out of reach,” Sunrun chief executive officer Lynn Jurich said. “That means more battles over net metering.”

Before it's here, it's on the Bloomberg Terminal. LEARN MORE