Why You Need to Pay Attention to Solar Energy Legislation

The 36 solar panels point south from their perch on the roof of Cumberland First Baptist Church. At first blush, they seem like an unlikely nod to one of the most basic Christian tenets.

“There is a holy mandate to care for the earth, which God created and called good,” The Rev. Thomas Wyatt Watkins tells me, quoting from the Old Testament creation story.

As the pastor showed me the 9-kilowatt, photovoltaic array installed in October, Watkins said the church’s plunge into the world of alternative energy is tied to a faith concept called “Creation Care,” which focuses on being good stewards of all God’s gifts.

A few miles to the west, in the heart of Indianapolis, an even larger span of 80 solar panels sits hidden atop the roof of Englewood Christian Church. It generates about 20 percent of the church’s energy, said Joe Bowling, who manages the solar project. That savings frees up money to support church outreach programs in a depressed and under-served neighborhood.

Solar panels are sprouting up alongside steeples and crosses on church rooftops across the state. At least seven Indiana faith groups have made the move to solar power, in part to shift precious dollars from utility bills to God’s work, and another seven or so are in the process of adding systems.

But legislation now pending at the Statehouse has Watkins and Bowling concerned that other churches, as well as individual homeowners (they both have solar at home, too), will lose that opportunity. The legislation proposed by Rep. Eric Koch, R-Bedford, is backed by Indiana’s 14 investor-owned electric and gas utilities and opposed by environmentalists, some manufacturers of solar products, consumer advocates and the state’s growing faith-based “Creation Care” movement.

Why this matters

Just because you don’t have a rooftop solar system now doesn’t mean you don’t need to be paying attention.

While there is little common ground between the two sides in this fight, there is one point on which they all agree. And this is why you need to be watching this bill: Thanks to technology improvements and dramatic price drops, small-scale, home solar generating systems are on the verge of becoming much more viable for Hoosiers.

That fact is driving a rush from both sides to get out in front of an expected surge in small-scale solar power systems by creating a regulatory framework that best fits their agendas.

Bottom line: There is a heap of money at stake in this fight. And, one way or the other, most of it will come out of our pockets.

At the heart of the fight is the concept called net metering. Under current Indiana law, utilities are required to buy excess power from small-scale producers at retail prices — or the same amount you and I pay the big utilities. The power companies want a new — and better — deal allowing them to buy that power at a wholesale price, cutting the amount solar producers earn by as much as 60 to 70 percent.

Both sides jockeying

Koch’s proposal (House Bill 1320) hasn’t come up for a hearing yet. But the contentious and complicated legislation already is spurring verbal fireworks, with each side jockeying for public support and claiming the other is spreading misinformation.

Opponents portray the legislation as a boon for the utility companies. It will reduce the financial incentives, they claim, to invest in rooftop solar. They say it also will limit the options for homeowners and churches that want to use “free energy” from the sun to save money and reduce dependence on the state’s electrical grid, which relies heavily on coal-fired generating plants.

Supporters contend the bill will do just the opposite. They say it is aimed at removing obstacles for investing in home-based solar and improving customer safety. They also argue it will eliminate an existing “subsidy” they contend now shifts solar savings to other customers, often folks with lesser means than those who can currently afford solar.

Right now, there are only about 600 customers — including the Cumberland and Englewood churches — that both buy and sell power via net metering arrangements with their utility companies. And even if HB 1320 passes, they will be “grandfathered” in under their current deals.

Small-scale producers who are totally off the grid will not be affected. Neither will large commercial producers — such as the solar farm at Indianapolis International Airport and the great expanse of windmills along I-65 in northwestern Indiana. They have separate contracts with the utility companies.

What’s at stake

What’s at stake is how the utilities deal with homeowners, churches and small businesses who want to turn to solar, wind or other forms of alternative energy — but also must rely on the grid for at least some of their power. That is the segment of the market where the most growth is expected. It also is the one targeted by Koch’s legislation.

Koch and Mark Maassel, president of the Indiana Energy Association, say the current net metering hurts customers who don’t have solar panels of their own. And, if small-scale solar expands as expected, they say it will shift a growing share of the utilities’ fixed costs for generation, transmission and distribution onto traditional customers.

They also told me the bill would make solar more accessible to residential customers by setting leasing guidelines for those who cannot afford to purchase a system. It also would establish “right to know” standards for those leases so consumers don’t get surprised by costs or conditions tucked deep in a contract’s fine print, Koch explained.

“The goal is to promote (small-scale solar) in a way that is responsible and with a regulatory structure going forward that allows consumers to invest with confidence and to be protected,” he told me Friday.

“We are trying to get out in front of a lot of the issues that have created problems in other states.”

Kerwin Olson, executive director of Citizens Action Coalition, disagrees with Koch and the IEA’s effort to frame the legislation as consumer-friendly. He also strongly disagrees with their contention that net metering users receive any subsidy. The utilities enjoy other savings, he said, when they buy power via net metering, even when they pay the retail price.

“We reject the very starting point of the conversation,” Olson said. “This is a war on solar because of the dramatic decrease in costs and the explosion (of small systems) across the U.S.”

The bill has not been scheduled for a public hearing. But it could come up before the utilities and energy committee in the House as early as Wednesday. When that hearing comes, Koch said he is open to discussion — and he expects to see amendments proposed.

A call for a study

Olson and opponents are calling for lawmakers to hit the pause button on the bill. They would like to see an independent study on the effects of the growing solar market on the utilities and their customers.

Olson said similar studies in other states have contradicted the utilities’ claims regarding the impact of net metering. An Arizona study, for instance, found each dollar spent buying power through net metering provided $1.54 in benefits to Arizona Public Service customers. Those benefits come from avoiding “expensive and polluting conventional power and power plants; reduced investments in transmission and distribution infrastructure; reduced electricity lost during transportation over power lines … and savings on the cost of meeting renewable energy requirements,”the study said.

“The utilities,” Olson contends, “are trying to avoid that conversation in Indiana.”


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