Maine Tries to Revise Solar Policies

An attempt to rewrite state policy on solar energy and dramatically increase statewide solar capacity appears headed for a gubernatorial veto.

According to an article posted by The Portland Press Herald, the bill, now on the governor’s desk, would increase solar capacity from its current level of about 20 megawatts to 196 MW, while adding as many as 650 new solar jobs. The proposal is intended to replace Maine’s current net-metering rules with a new system, and it had the support of solar installers, the Maine Office of the Public Advocate, and both investor-owned utilities in the state.

Governor Paul LePage, a frequent critic of renewable energy, was expected to veto the bill and it appears there aren’t enough votes in the legislature for an override.

Instead of paying solar customers at the retail rate for excess electricity, which is currently the case, the bill would establish a market-based system in which the Public Utility Commission sets long-term contracts for buying electricity from solar producers, and then aggregates the power and sells it on the open market. Profits from sales would be distributed evenly among all ratepayers, UtilityDive reported. Existing net-metering customers would be allowed to keep their current arrangements for a number of years if they wished.

Amendments intended to win over more support in the legislature included price caps and other restrictions. That got a few more votes, but not enough to give the bill a veto-proof margin.

Opponents of the bill complain that net metering amounts to a subsidy for solar customers. The chairman of the PUC testified last month the plan would cost ratepayers $22 million on their electric bills in the fifth year of the plan, The Press Herald said. The public advocate’s office, however, said that consumers would actually see a benefit of more than $122 million over the period of the 20-year contracts that the plan originally envisioned.

The proposal was developed over a six-month period in talks involving just about everyone in the state with an interest in solar energy, and the latest version had bipartisan support. Backers of the legislation worry that if the bill is rejected, it will fall to the Public Utilities Commission to decide new net-metering rules. All three members of the panel were appointed by LePage.

SunEdison makes it official

As expected, wind and solar developer SunEdison has officially filed for bankruptcy protection.

The clean energy conglomerate started as semiconductor maker MEMC Electronic Materials and entered the solar market only ten years ago. It bought SunEdison in 2009 for $200 million, later changed its name to SunEdison and pioneered the business model of providing solar panels to both business and homeowners with little or no money upfront, according to a post at Fortune. In 2014, the company spent $2.4 billion to buy wind developer First Wind, which allowed SunEdison to call itself the world’s largest clean energy company.

It was SunEdison’s aggressive acquisition strategy, including the use of spinoffs called “yieldcos,” rather than any weakness in the renewable energy market that ultimately brought financial chaos to the company. Last year, SunEdison announced its plans to gobble up Vivint Solar in a $2.2 billion deal, and financial backers finally said they’d had enough. Shares began to lose value, prompting the company to back out of many of its deals, Fortune said.

“The company’s tale of woe stems from overreaching ambition and core business decisions that led it to try to grow too big, too fast, and in too many directions,” Fortune‘s Katie Fehrenbacher wrote.

She wasn’t alone in pointing the finger at misguided business policies. In a statement posted online, Solar Energy Industries Association Vice President Dan Whitten said, “This is a highly competitive industry with a massive upside. As with other rapidly growing and successful industries, not every company in the solar market is going to stand the test of time. SunEdison is just one company and today’s development does not reflect a trend of the broader industry. The solar industry is growing at warp speed. It took us 40 years to get to 1 million installations (which we have just done) and it will take us just two more years to hit 2 millio,n and that, I think, illustrates the direction of the solar industry.”

The Wall Street Journal reported that SunEdison spent more than $18 billion on acquisitions and raised $24 billion in debt and equity between 2013 and 2016. Shares have lost 99% of their value in the last year, but the company has raised $300 million in loans to get it through the bankruptcy process.

Net-metering caps raised

As Maine struggled to rewrite its rules on net metering, two other New England states have approved changes in their solar energy policies.

In Massachusetts, Governor Charlie Baker signed a bill earlier this month raising net-metering caps for both privately owned and municipal photovoltaic systems while lowering reimbursement rates for commercial projects by 40%, according to an article posted by the National Law Review.

The cap for privately owned PV systems went from 4% to 7% of peak load and from 5% to 8% for municipally owned systems. Small residential systems continue to remain exempt from caps.

The law lowers the reimbursement rate for commercial arrays by 40% but makes no changes to rates for small residential systems. Rates for existing installations will stay in effect for the next 25 years. The bill also gives electric utilities the right to seek a “monthly minimum reliability contribution” to help pay for providing grid services to solar customers.

In New Hampshire, the Law Review said, legislators have voted to double the state’s net-metering cap, to 100 megawatts, just as the state was rapidly approaching the old cap.

The bill also directs the Public Utilities Commission to come up with a new net-metering system that does a better job of accounting for the costs and benefits of net metering than a simple reimbursement at the retail rate. The bill gives the PUC 10 months to come up with a replacement plan.