Facing exorbitant electricity costs and other billing controversies, state regulators all across New England are reassessing the way they subsidize residential and commercial solar power.
Solar power, considered an integral part of the burgeoning renewables industry, has been widely adopted by progressive leaders in the Northeast. Not only does every state in this region implement some form of incentive for solar technology, but lawmakers have taken great strides in increasing their renewable energy industries altogether.
However, such an embrace of this intermittent power source has not come without its costs. The region pays far more for electricity than any other region in the U.S. and New England’s grid operator determined it was at risk of rolling blackouts due to continual closures of more reliable power plants. Additionally, lawmakers are being forced to respond to growing complaints from utilities and ratepayers on the implementation of net metering — a subsidy program that compensates panel owners for the amount of solar power they send back to the grid.
Many state governments implement some form of net metering. Under such programs, a utility company must compensate a solar panel owner for any excess power that is sent back to the grid, typically at a higher value than it’s actually worth. This provides an incentive for people to purchase solar panels. However, this arrangement has attracted controversy. Such a system of paying panel owners more for their power than it is worth ultimately raises rates for non-net metering ratepayers. Customers are paying more for their power even if they aren’t involved in a net metering program.
New England leaders have taken notice and are changing the rules.
Connecticut — rated in 2017 as the most expensive state in terms of its energy costs — was one of the latest to reform its solar subsidies. A bill that reduces the amount solar panel owners are compensated for the energy became law after it sailed through the state legislature and was signed by the governor in May. Maine had taken similar measures in 2017, with regulators putting in place a buy-all/sell-all system meant to streamline the process. The governor of Maine has twice vetoed legislation passed by state lawmakers to undo this.
“Rooftop solar has grown from a funny little blip to a mainstream industry that employs (nationally) hundreds of thousands of people and generates significant amounts of power,” Sean Gallagher, vice president of state affairs at Solar Energy Industries Association, said in a statement to Energy News Network. “Utilities have started to become concerned about the impact of rooftop solar on their business models.”
New Hampshire Republican Gov. Chris Sununu has been proactive in fighting the expansion of solar subsidies. He said he was saving his state between $5 and $10 million after vetoing legislation that would have raised net metering caps. Sununu’s office in April called on the state to move away from renewable energy subsidies and embrace more reliable sources of power, like natural gas and nuclear.
The Vermont Public Utility Commission determined in May that compensation to solar panel owners needed to be scaled back in order to balance growth of the program.
“These financial incentives also make net-metering the most expensive of Vermont’s renewable energy programs because the utility is essentially ‘buying’ the net-metered output at substantially more than market rates for comparable renewable energy,” the commission said in a released statement. “[A] number of Vermont utilities expressed concern about the effect on rates of continued high net-metering prices.” (RELATED: Another Day, Another State Reduces Costly Solar Industry Subsidies)
Both Massachusetts and Rhode Island have adopted programs to help balance net metering costs.
The compensation program in Rhode Island, called Renewable Energy Growth, is an alternative that allows solar users to be paid at a fixed price that is even higher than the retail rate, but those who are involved are not allowed to benefit from various other solar subsidies. A program in Massachusetts, called the Solar Massachusetts Renewable Target, or SMART, reduces incentives the more solar owners are compensated.
“It’s a tough time for utilities trying to figure out how they move forward in this world,” Janet Gail Besser, executive vice president of the Northeast Clean Energy Council, said of the changing landscape in New England.
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