Legislators in Maine have introduced a novel solar policy that could boost solar capacity in the state and offer a viable alternative to net energy metering, a policy at the center of several state-level political battles.
“In Maine, we come together to find innovative solutions to our challenges,” said Assistant Majority Leader Sara Gideon, a Democrat who sponsored legislation that kicked off a dialogue on the future of solar in Maine. “Our challenge here has been growing solar in a way that gives people energy independence, creates jobs and mitigates climate change. Now, we've created a way to do that and to do it in a way that remains sustainable into the future and will drive significant solar growth.”
The bill proposes to replace net metering -- which credits rooftop solar customers at the full retail electricity rate for excess energy they send to the grid -- with a 20-year contract at a set price for net exports measured hourly.
The contract price would be determined by the Public Utilities Commission at a level high enough to drive the rooftop solar market, but subject to an overall program cost cap. Customers would have the option to contract for the purchase of all the solar power they generate, or to use their generation on site and sell only the excess.
Existing rooftop solar customers can choose to stay on Maine’s old net metering policy for 12 years after the new program takes effect. Or they can choose to switch to a long-term contract.
The plan hinges on the concept of a solar “standard buyer” that would purchase and aggregate the output from solar systems, and sell it into New England’s wholesale energy markets. The legislation designates this role to the state’s investor-owned utilities, which could use the market revenue to offset program costs.
The bill proposes that utilities in Maine enter into long-term contracts for a total of 248 megawatts of solar power over the period from 2017 to 2022. Residential and small commercial projects would make up 118 megawatts of the overall target, which is equal to the National Renewable Energy Lab’s median estimate for the amount of distributed solar that would be installed under traditional net metering, according to the bill summary. The remainder would be made up of community, large commercial and industrial and grid-scale solar projects.
Maine currently has fewer than 20 megawatts of solar capacity, nearly all of it at the residential and small-commercial scale.
A next-generation debate
Concepts laid out in the legislation stem from a report conducted by Strategen Consulting on behalf of the Maine Office of the Public Advocate. Strategen's Lon Huber, author of the report, believes the proposal offers a cost-effective and transparent mechanism to grow Maine’s solar market.
“In essence, the framework we created transforms a customer’s locally produced electrons and enhances it for regional market participation,” he said. “Moreover, this platform is highly adaptable and can evolve as markets and technology evolve.”
The program is designed so that the 20-year contract price steadily declines over five years as the rooftop solar market continues to scale and costs continue to drop. However, the program is subject to review, and utility regulators must look into raising rates if installations fall below 85 percent of NREL targets.
On Thursday, the bill received endorsements from a bipartisan coalition of lawmakers, utilities, environmental groups, solar installers and consumer advocates. It’s estimated to create 800 solar jobs and result in $100 million in savings for ratepayers.
Putting an end to net metering is one of the most controversial elements of the bill. But as Maine’s largest utility, Central Maine Power, approaches the state’s net-metering cap, solar installers view the proposal as a promising path forward.
“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,” said Fortunat Mueller, partner and co-founder of the New England solar firm ReVision. “We think this legislation does that. We also know that distributed solar in Maine provides substantial benefits, not just to solar customers, but to all ratepayers. And because the new solar policy helps ReVision and other companies create hundreds of quality jobs, moving ahead is really good news for our state.”
According to John Carroll, spokesperson for Central Maine Power, the proposal "moves the debate into the next generation of clean energy production" and will "benefit consumers more equally."
"I’m glad we have a chance to get beyond a backwards looking debate about a 1990’s era net metering mechanism," he wrote in an email. "A lot has changed in the past 25 years in the structure of the utility industry and de-regulation, interest in renewables, and the technology itself. Net metering is a narrow mechanism that was developed in response to a minor issue. This bill moves the state, and the whole topic of solar energy and [distributed energy resources] forward for Maine."
"I think we've solved a problem"
Maine Public Advocate Tim Schneider said it took six months of meetings to get stakeholders on board with the plan. The aggregation concept is especially important, he said, because it gives Maine a mechanism to bring distributed resources into other markets in a way that benefits all ratepayers.
For utilities, the standard buyer proposal allows them to end retail-rate net metering, which they say amounts to a subsidy for solar customers and hurts their bottom line. Instead, they can group solar projects together and recuperate some of the program costs in the market. At the same time, customers continue to see an economic benefit for going solar, and the guaranteed purchase rate gives them confidence that their solar savings won’t disappear if electricity rates increase. For installers, it guarantees the solar industry will continue to grow.
While Maine currently has a tiny solar market, this new bill could offer a model for other states considering an alternative to traditional net metering.
“I think we’ve solved a problem other folks are trying to solve,” said Schneider, in an interview. “I don’t want to be so presumptuous to think others will agree…but every time we talk to someone engaged in net metering or in the trenches on [net metering] battles, they want to hear more.”
A recent report by the NC Clean Energy Technology Center found that 46 states took policy action on solar in some way or another in 2015. Twenty-seven states considered or enacted changes to their net metering policy as several states ran up against net metering caps, including Maine’s neighbors New Hampshire and Massachusetts.
Despite winning support from a variety of stakeholders, passing the bill in Maine is not a slam-dunk. Proponents still have to win over a governor who has actively sought to dismantle the state’s renewable energy policies. The proposal is also bound to see pushback from national solar companies, despite the fact that Maine represents such a small solar market, because they see net metering as a fundamental element of their overall business model. This model has helped residential solar grow exponentially in recent years.
Solar installers have fought tough battles in other states to keep retail-rate net metering in place. In Nevada, where the policy was recently changed, solar installers are currently engaged in several legal and political challenges.
The Alliance for Solar Choice (TASC), which represents national solar installers, is still reviewing the Maine legislation, according to spokesperson Lauren Randall. But she noted that in January, TASC joined with 15 other solar advocates to request that traditional net metering continue to be offered alongside the new 20-year contract option. However, that provision was not ultimately included in the bill.
Some lawmakers in Maine seem insistent on finding a new solution.
“It’s time that we update Maine’s approach to solar and other distributed generation resources,” said Representative Nathan Wadsworth, the ranking Republican on the Energy, Utilities and Technology Committee, in a statement. “This bill positions Maine consumers to reap the full benefits of changes in technology and what’s taking place in the energy industry.”