(This piece was originally published on April 8, 2017 in The Kokomo Perspective.)
The senate bill some fear will harm the budding Hoosier solar industry continues to advance, and it may receive a vote this week in the House.
After continuous modification, Senate Bill 309 passed out of the House Utilities, Energy, and Telecommunications Committee last week with a vote of 8–5, and into conference committee. Even though the measure exists in a very different state than when it was first introduced by Sen. Brandt Hershman, solar advocates’ concerns about the eventual removal of incentives that fuel the purchase of private energy generation equipment still remain.
In its current form, the bill would have a large impact on the practice of net metering, or a mechanism that essentially pays solar generators for returning excess energy to the utility grid. Those presently in possession of a solar array will be grandfathered at present net metering return rates for three decades. Those who install solar arrays in the next five years will receive a full retail price until 2032. Anything installed afterwards will see the incentive drop to a wholesale rate that includes an additional 25 percent.
It’s this deadline advocates still are arguing against even though it’s been extended, and some question the point in even presenting the legislation.
Rep. Matt Pierce, the ranking minority member of the utilities committee, voiced vehement opposition to the bill during last week’s meeting. In his statement, Pierce questioned the reasoning commonly offered in support of the measure, which is that too many individuals partaking in net metering would result in an unfair shift of cost to those who remain on the normal utility grid. Presently, legislation would cut off net metering once one percent of a grid’s population begins generating energy under this argument.
“I just can’t understand the rationale for this bill,” said Pierce. “There’s no crisis. Circuit breakers are in place. The net effect of what will happen if we pass this bill is we will hurt a lot of developing small business, a lot of entrepreneurs … This kind of attack on net metering is happening in a lot of states, and it’s because utility companies realize their business model is under attack.”
Chris Rohaly, the president of solar array installing company Green Alternatives, took a similar stance on the matter.
Even though deadlines have been extended for those looking to install solar technology and take advantage of net metering, Rohaly remains concerned that down the road, this will still cripple the industry.
“What’s going through my mind is my long-term health,” said Rohaly. “They will say, ‘This is going to be good for you.’ It is clearly going to be something that will motivate anyone who has been considering to move quickly because they will be grandfathered, but I have to think well beyond the calendar year. I’m worried we put a system in place that will damage the independent installer community when essentially the utilities start competing and selling solar on their own.”
House Utilities Committee Chair Rep. David Ober said he viewed the legislation as timely and getting ahead of issues that could arise with grids in the future as solar technology becomes more affordable.
Also, Ober said that net metering may prevent the development of more efficient and affordable batteries to store energy produced by solar arrays. The reasoning, he said, is that at the present one-for-one exchange rate of net metering there is little reason to develop an “expensive battery.”
“The question is do we continue with net metering or do we want to remove what I see as a barrier of bringing the cost of storage down to where it’s more accessible by customer who want to engage in distributed generation?” said Ober.
Jesse Kharbanda, the executive director of the Hoosier Environmental Council, voiced concerns expanding beyond the solar and utility industries.
According to him, SB 309 represented “out-of-nowhere” legislation that could frighten those who consider starting businesses in the Hoosier state.
“Are entrepreneurs better or worse off under this bill?” said Kharbanda. “I think the answer is they are worse off because this is a dramatic, and I would say arbitrary, shift in policy. And that kind of dramatic change in policy is a very bad ingredient to them making investments … It just doesn’t make Indiana look like it’s a foresighted, forward thinking state.”