The 2022 Innovation Case: Coming Regulatory Change Could Frustrate Small Solar Energy - Indianapolis Business Journal - Indianapolis Business Journal

The 2022 Innovation Case: Coming Regulatory Change Could Frustrate Small Solar Energy – Indianapolis Business Journal – Indianapolis Business Journal

The church’s solar system covers more than 90% of its electricity needs, says Reverend Jimmy Henson Rieger, minister of the Universal Uniting Church in Indianapolis. (IBJ Photo/Eric Laird)

Solar energy has been on Ray Wilson’s mind for over 40 years.

The idea of ​​adding solar panels to his family home first came to Wilson in the early 1980s. By 2012, that was a reality.

Wilson currently owns an 8.8-kilowatt solar system, which he said has paid more for himself. He and his wife have not paid for electricity for two and a half years.

“I come from a background of wanting to conserve, and this whole idea of ​​solar energy excites me,” Wilson said.

Wilson, a longtime member of the United World Church in Indianapolis, also led a program in the church to install two solar arrays — a 10-kilowatt system in 2012 and a 40-kilowatt system in 2017.

Reverend Jimmy Henson Rieger, the minister, said the solar system provides more than 90% of the church’s electricity.

“We are constantly looking at how we can continue to be more energy efficient and sustainable, and then by using solar panels we hope to create a surplus that goes out into the community,” Hinson-Rieger said.

But Wilson and the Universal Universal Church in Indianapolis are somewhat unusual in Indiana, which ranks 32nd in the country in terms of the amount of kilowatt-hours produced by so-called small-scale solar systems, which power individual homes or commercial buildings, rather than utilities.

And the state’s ranking could drop, given the changes coming this summer in the state’s small-scale solar policies.

Both Wilson and Church take advantage of the incentive known as net metering, which allows homeowners and businesses with solar systems to earn credit on their monthly electric bill for the excess electricity they produce from their system.

How this credit is calculated can make a big difference to a customer’s bill.

Indiana’s long-running net metering program is set to end on July 1 and will be replaced by a program called “distributed overgeneration,” which will dramatically reduce the credits small-scale solar owners receive for the energy they generate but don’t use.

Solar industry executives, installers and advocates told IBJ that they are concerned about what happens next for residential and small-scale commercial solar in the state.

Jim Stratter, founder of Ag Technologies Inc. Rochester-based: “Essentially, policies may prevent private ownership of solar energy from the market.”

what happened after that?

The path toward the end of net metering began during the 2017 hearing of the Indiana legislature.

When Governor Eric Holcomb signed Senate Registry Act 309 into law, it started with a ticking clock for solar-obsessed Hoosiers who get their sustenance from one of the five investor-owned facilities in Indiana — AES Indiana, CenterPoint Energy Inc. , Duke Energy Corp. Michigan Indiana Power Corporation and Northern Indiana General Services.

“Internet metering was a really important part of what made this work for us,” Hinson-Rieger said. The church’s push to install the Earth’s solar array when it did so was motivated by fear that the state would change the grid metering law.

And so, he said, “we were really working with a purpose, working by a deadline.” “we need [net metering] In order to have meaning.”

Under SEA 309, persons who set up solar arrays prior to December 31, 2017, are aggregated at the full retail net metering rate until July 1, 2047.

Those who installed the systems between January 1, 2018 and July 1, 2022, will receive full retail credit until July 1, 2032.

At the time the law was passed, residential and small commercial solar array owners were receiving roughly 11-13 cents per kilowatt-hour for the additional energy they produced. The law allowed this price to be available to new customers until July 1.

After July 1, the rate was expected to drop to an average of about 4 cents.

The five state-owned utility companies were also allowed by law to end net metering programs earlier if small solar customers were producing at least 1.5% of the facility’s peak load.

Danielle McGrath, president of the Indiana Energy Association, said individual companies plan to push net metering rates beyond July 1 — but it’s up to individual companies.

CenterPoint, formerly known as Vectren, became the first utility company to reach 1.5%. It then asked the Indiana Utilities Regulatory Commission to end its net metering plan, which was reimbursing solar customers 15 cents for every kilowatt-hour of energy they put on the grid each month beyond what they used.

IURC approved the company’s plan to offer credit to customers at a rate of 2.7 cents per kilowatt-hour — calculated on a spot, not monthly — roughly the wholesale price the company pays to buy power from major suppliers.

But the Indiana Bureau of Consumer Adviser’s Office, a government agency that represents customers in price issues, joined forces with a group of solar energy companies and environmental consumer advocates to challenge the decision in court.

The Indiana Court of Appeals ruled in January against Center Point, saying that state law does not allow for immediate measurement. CenterPoint and IURC have asked the Supreme Court to consider the case, leaving the measurement in limbo.

Ben Inscape, director of the Citizens Action Coalition, the plaintiff in the case, said CenterPoint’s plan would make it nearly impossible for customers to recoup their initial solar investment, let alone save money over the 25 to 30 years their systems operate.

“There is a growing demand from consumers and families, as well as businesses, for energy-choice solutions like distributed generation, more choices, more choices over their energy and giving them more certainty and stability on their bills,” said Inscape.

Solar installers are trying to get as much work done as possible before net metering and Indiana Supreme Court rules expire, said Laura Arnold, president of the Indiana Distributed Energy Alliance. Arnold said the case could extend into the fall.

“This sets the future solar and solar energy industry [distributed generation] Customers are somewhere between forgetfulness and agony,” Arnold said. “We are in Never-Never Land, and with supply chain issues, that makes it more difficult.”

The future of solar energy in Indiana

Kurt Schneider is a partner in the Indianapolis office of Phoenix-based Veregy, formerly Johnson Melloh Solutions. He led the team that installed the solar farm at Indianapolis International Airport and is president of the Indiana Renewable Energy Alliance, a coalition of solar installers that Schneider said want “the freedom to choose energy.”

Schneider said the end of net metering would make Indiana less competitive. It’s moving some of its solar jobs out of the state, including to Illinois, which passed the Energy Future Jobs Act in 2016.

Among its features, the Illinois law created a community solar program and required the state’s largest utilities – Commonwealth Edison and the two Princes of Illinois – to expand energy efficiency programs and reduce energy waste by 2030.

“I’m pushing my investment into other, more solar-friendly states,” Schneider said. “This is the biggest piece out there my friend. Jobs. Jobs. If you have a good enough policy, everyone wins.

“It’s crazy how you can build a company and create a family of employees under good policy,” he said. “Good politics means jobs. High paying jobs.”

Inskeep echoed Schneider’s predictions about solar companies doing business in Indiana.

“Why would a solar company in Indiana still try to sell uneconomic solar systems when they could only cross the border and get three or four times the compensation rates in places where there is a policy that actually supports or encourages distributed generation growth?” Inscape said.

Inscape cited Minnesota as a Midwest leader for rooftop solar policies and communities. He added that Kentucky almost ditched net metering, but lawmakers have reversed course and instead adopted a higher compensation rate.

With the net metering incentive gone, Schneider said Indiana’s solar systems will be smaller, and homeowners and business owners won’t be able to achieve the kinds of carbon emissions reductions they can under laws passed in other states.

“We do a lot of work in Ohio, Illinois, Texas, Arizona and California,” Schneider said. “All sun-friendly places.”

Other incentives

Another solar-friendly policy that Indiana lacks is a program of renewable solar energy credits — called SRECs, which allow homeowners to earn extra income from generating solar electricity.

The programs are built on state renewal portfolio standards, which require large facilities to produce a certain percentage of their electricity from renewable resources — which they can generate themselves, or they can pay someone else to put the renewables on the grid. Indiana does not have such standards, and therefore there is no state SREC market in which Indiana utilities can pay Indiana homeowners or businesses to produce solar energy.

Hoosiers can trade SRECs in other markets, including Ohio, according to Solar United Neighbors, a national nonprofit focused on solar power for roofs and communities.

A solar owner in Ohio can earn up to $130 a year through SRECs, while a single owner in Washington, D.C. can earn more than $5,500 from their own solar system, according to Energy Sage.

“Anyone in Washington who doesn’t have solar panels on the roof is crazy,” Wilson said. “If Indiana has this requirement for utilities to have a certain percentage of renewable energy, there is [would] That there is some incentive to pay for SRECs.”

down to the wire

With time running out before the end of net metering, Indiana solar companies are rushing to install new systems, but they are being held back by a nationwide supply chain crisis. This is partly due to the US Department of Commerce’s investigation into whether Chinese companies are getting around tariffs by moving solar panel components to other Southeast Asian countries.

“It caused a huge market turmoil,” Schneider said.

The turmoil this month prompted the Northern Indiana General Services Corporation to postpone the retirement of its largest coal plant due to uncertainty in the solar and renewable energy market.

“It has created uncertainty and is likely to delay projects,” said McGrath, of the Indiana Energy Association. “Our companies are working with developers of renewable energy generation to better understand what these impacts might be from a timing perspective.”

Despite deadlines and turmoil, Indiana residents living in homeowners’ associations took a breather after the last legislative session when Holcomb signed House Registration Act 1196 into law.

The new law, which came after six years of attempts, is making it difficult for residential homes to prevent homeowners from installing solar panels in their homes.

Zach Schalk, Indiana program manager at Solar United Neighbors, said the organization is grateful that the law went into effect immediately upon signature rather than July 1 so that homeowners could take advantage of it before the net metering deadline.

Schalk said the signature requirement remains a burden for homeowners who live in large neighborhoods with several hundred homes or more, and he would like to see Indiana pass a bill that would completely ban HOA bans.

“If they can do it in states like Missouri, Texas and Florida, we can do it here in Indiana,” Schalk said.

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