Solar panels on the Belfast landfill (Photo by ReVision Energy)
Solar panels on the Belfast landfill (Photo by ReVision Energy)
Renewable energy advocates and utilities are once again squaring off over the future of solar policy in Maine. Last week, the Legislature’s Energy, Utilities and Technology Committee held a public hearing for a bill (LD 1373) that would reverse a controversial decision by the Maine Public Utilities Commission to reduce incentives for installing rooftop solar panels beginning in 2018. 

“Maine is at a critical crossroads on solar power,” said Dylan Voorhees, Climate and Clean Energy Director for the Natural Resources Council of Maine, in a prepared statement. “Solar power presents opportunity to expand our economy, protect our environment, create jobs, and lower energy costs. But the PUC net metering rollback is so extreme that it includes a new tax on solar akin to utilities charging people who use less electricity an extra fee because they dry their clothes on a clothesline. Inaction by the Legislature, combined with the anti-solar action by the Public Utilities Commission, threatens to move Maine further backward.”

Currently, Maine’s net energy billing (NEB) rule allows homeowners and businesses with grid-tied solar panels to receive a credit, valued the same as the standard retail rate, for any excess power that they send to the grid. They can then save those credits for up to a year and redeem them for power from the grid when the sun isn’t shining. Under the new PUC rules, existing solar power producers would be compensated at the full retail rate for 15 years, but anyone who waits until 2018 to install solar would see their credits gradually reduced over time. The new rules would also require that a second meter be installed on a solar user’s house to measure the total amount of power the arrays produce. 

It typically takes about 13 years for the credits to fully pay back the cost of installing solar. According to PUC Chairman Mark Vannoy, the solar pay-back will be roughly the same under the revised rate structure because the cost of solar photovoltaics is projected to drop another 40 percent in the next decade. Nevertheless, solar advocates argue that Maine, which ranks last in New England for installed solar capacity, isn’t doing enough to incentivize the technology. 

LD 1373 would restore net energy billing to current rates in law and prohibit the PUC from allowing utilities to charge customers for using grid-tied solar. It would also reinstate a solar rebate program, which expired in 2010, and would also remove the 9-meter limit on the number of participants a community solar farm can have. LD 1373 would also allow third-party ownership of solar installations, which advocates say will help reduce up-front costs to install solar. The committee has not yet scheduled a vote on the bill.

Belfast & Waldoboro Weigh In

Both the City of Belfast and the Town of Waldoboro testified in favor of the bill. Testifying on behalf of the Waldoboro Select Board, Chairman Clinton Collamore wrote that the PUC’s recent decision has “sown confusion.”

“It has made planning more difficult for municipalities that currently invest in solar power and for municipalities considering long-term investments in solar power,” said Collamore. “The Legislature must act now to reverse the PUC decision and to restore net metering. Doing so would enable Waldoboro to install solar projects that would help to stabilize its mil rate and to save taxpayers hundreds of thousands of dollars during the next years.” 

The Industrial Energy Consumers, an energy advocacy group representing Maine manufacturing interests, argued that the new PUC rules represent a “an administrative taking of the right to self-generation” and “a threat to the continuation of that right for all consumers.”

However, testifying against LD 1373, Central Maine Power argued that net energy billing costs its 2,800 net-energy billing customers approximately $1.7 million a year. CMP lobbyist Joel Harrington said that solar producers “do not pay their fair share” for the cost of building and maintaining transmission and distribution infrastructure because they are offset by the customer’s excess power generation. 

“Private rooftop solar customers use the grid more than other customers because they put power onto the grid and take power off the grid,” said Harrington.

PUC Chairman Mark Vannoy defended his decision to cut rates for solar, arguing that the state shouldn’t intervene in the free market when it comes to energy. 



“I think the rule proposed by the PUC was the best effort to slowly move us to markets while preserving the industry, preserving the incentives and allowing that to shift to more of a market construct,” said Vannoy, who voted last year to deliver a $1.5 billion subsidy to natural gas companies to build a private interstate gas pipeline. 

The PUC decision has been panned by both solar supporters and the LePage administration, which stridently opposes any investments in renewable energy. Vannoy admitted to the committee that he didn’t know of any energy stakeholders that supported the rule change.

Several LD 1373 supporters cited a 2015 PUC-commissioned study that determined the value of solar power produced in Maine to be twice the current rate solar producers receive for their power because solar power displaces more expensive fuel sources, creates less air and climate pollution, adds more price stability and energy security to the state’s energy portfolio, and reduces the need to build more power plants to provide enough power during times of peak electricity demand.

But Ashley Brown, director of Harvard Electricity Policy Group — a utility-funded think tank at Harvard’s Kennedy School of Government — questioned the accuracy of the value-of-solar study. Brown, who has been hired by the utility trade association Edison Electric to testify against solar incentives across the country, argued that there is “no agreed-upon methodology” for measuring the value of solar. Brown said that Maine’s study inflates the value of solar because it doesn’t identify the location of the solar power sources, the exact time when they generate or what exact power sources rooftop solar is displacing as the resource is only intermittently available depending on the weather. He also questioned to what extent solar displaces the need for building more transmission capacity, which is argued to be the case because current technology does allow the ability to store solar to provide reliable base load power supply.

“No value-of-solar study could ever capture all that because it’s far too demanding, there are too many moving parts,” said Brown. 

Edison Electric has long warned its investor-owned utility members of the financial threat that “disruptive forces” like solar voltaics and energy efficiency pose to their investors. In 2013, the association issued a report that recommended eliminating solar incentives and imposing fixed monthly service charges on solar customers because the technology threatens their profits. 

“While the utility sector provides an important public good for customers, utilities and financial managers of investments have a fiduciary responsibility to protect the value of invested capital,” the report stated. 

Utilities have been successful in scaling back incentives in a number of states, but in a case before the Massachusetts Department of Public Utilities last year, Mass regulators rejected a proposal by the utility National Grid to impose fees on solar users after it determined, following a comprehensive investigation, that solar is not currently shifting costs to other customers.

“The Maine Public Utilities Commission has not conducted a similar investigation,” noted Conservation Law Foundation attorney Emily Green. “in [the Massachusetts] 

net energy billing rulemaking proceeding, utilities allegations about cost shifting were unsupported by record facts. The Legislature should not assume that a cost shift is inherent to net energy billing in Maine without quantitative 

evidence.”

Green added that any cost-shifting that occurs from solar customers in Maine would be negligible because solar penetration is at only 1 percent and would be outweighed by the positive economic benefits of the technology. In Massachusetts, the peak load of solar is 4 percent for private solar installations and 5 percent for public installations, making it the fourth-largest market for solar in the US, according to the Solar Energy Industries Association.

When asked if the Maine PUC had conducted a full public cost-benefit analysis of solar, Chairman Vannoy replied that “everyone looks at the [PUC’s] value-of-solar study as a cost-benefit analysis,” but would not fully answer the question, noting that CLF and other groups are currently challenging the rules in court.