A three-judge panel in North Carolina upheld Duke Energy’s reduced payments to rooftop solar owners on Tuesday, unanimously rejecting claims from climate justice advocates that the smaller credits run afoul of state law.

The ruling upholds for now a scheme that took effect last October after Duke, some of the state’s oldest solar installers, and multiple clean energy groups reached a complicated truce to avoid the bruising battles over net metering seen in other states.

NC WARN, Environmental Working Group, and others opposed to the compromise argued that regulators adopted it without conducting their own analysis of the costs and benefits of net metering, a requirement of a 2017 statute. Such studies typically show that rooftop solar offers net benefits to the grid, contrary to utility claims.

The appellants rested their argument in part on a statement from one of the 2017 law’s authors, John Szoka, a Fayetteville Republican who served in the state House of Representatives for a decade. An Energy News Network article quoted in the appeal describes Szoka as “adamant” that the Utilities Commission, not Duke, should conduct the study.

The appeals court panel agreed, based on the plain text of the law. 

“The commission erred in concluding that it was not required to perform an investigation of the costs and benefits of customer-sited generation,” Judge Hunter Murphy, a Republican, wrote. 

But in a disappointing twist for the challengers, he continued, “however, the record reveals that the commission de facto performed such an investigation when it opened an investigation docket in response to [Duke’s] proposed revised net energy metering rates; permitted all interested parties to intervene; and accepted, compiled, and reviewed over 1,000 pages of evidence.”

Joined by two Democrats, Judges John Arrowood and Toby Hampson, Murphy’s opinion also rejected arguments that the commission erred by failing to consider all of the benefits of rooftop solar and by forcing solar owners to migrate to time-variable rates instead of allowing flat rates to stand.

“The commission properly considered the evidence before it and made appropriate findings of fact and conclusions of law,” Murphy wrote.

Many solar installers saw a dip in sales and interest in the last quarter of 2023 when the lower net metering credits took effect. But they were also hopeful about a new Duke program that rolled out this spring, which offers solar customers incentives to pair their arrays with home batteries.

Jim Warren, NC WARN executive director and an outspoken Duke critic, said in a press release that he and his allies would weigh an appeal to the state’s Supreme Court. 

“This ruling directly harms our once-growing solar power industry and the communities constantly battered by climate change driven by polluters like Duke Energy,” he said.

North Carolina appeals court upholds Duke Energy’s lower net metering rates is an article from Energy News Network, a nonprofit news service covering the clean energy transition. If you would like to support us please make a donation.

Solar customers and clean energy advocates are waiting to see if New Hampshire will continue its system for compensating customers who share excess power on the grid. 

State regulators at a recent hearing seemed unconvinced about the policy’s benefits, despite support from utilities, customers, and hundreds of residents who submitted public comments on a proposed extension. 

“This commission is highly skeptical of anything involving energy efficiency or clean energy, and focused almost solely on cost,” said Nick Krakoff, senior attorney for the Conservation Law Foundation in New Hampshire. 

These compensation plans, generally referred to as net metering, are widely considered one of the most effective policies for encouraging more solar adoption. Recently, however, several states have changed or considered changing their programs, as utilities object that the policies are too costly and some politicians and policymakers push for more purely market-based approaches. 

New Hampshire’s net metering rules haven’t been modified since they were established in 2017. The state’s public utilities commission opened a case to consider the question of whether and how to adjust the rules in September 2022. A year into the proceedings, the state’s major electric utilities — Eversource, Liberty Utilities, and Unitil — came out in support of continuing the existing system of net metering, despite the tendency of utilities nationwide to consistently push for lower net metering rates. The move was a welcome surprise for environmental advocates. 

“If you don’t have a compensation rate that’s high enough, you’re not going to have customers that are going to want to invest in solar panels or other renewable energy,” Krakoff said.

Striking an agreement

In early August, a diverse coalition including the utilities, the Conservation Law Foundation, Clean Energy New Hampshire, Granite State Hydropower Association, Standard Power of America, and Walmart reached a settlement agreement about the future of the policy. 

The agreement calls for the state to keep the current net metering structure in place for two years; at the end of two years, utilities would propose time-of-use rates for net metering, so the compensation rate more closely matches the real-time value of the power being sent into the grid. Also, any projects that join the net metering program during those two years will receive the same compensation for 20 years before transitioning into whatever new system is created by then (currently the compensation ends in 2040). 

An influx of public comments has also reflected wide support for the tenets of the agreement. Nearly 450 comments were submitted since the beginning of the year, more than Sam Evans-Brown, executive director of Clean Energy New Hampshire, has ever seen in a public utilities case, he said. The vast majority urge the commission to maintain the current net metering system. 

Peterborough resident Brian Stiefel was among those who filed comments. He and his wife installed 37 solar panels on their home in 2021, at a cost of $51,000. Though the solar doesn’t fully cover their electric bills, it provides $2,000 to $3,000 in savings per year, in large part due to net metering. 

“A big part of the decision to do this was the fact that the state would approve us for net metering,” Stiefel said in an interview. “If that’s going to change it could have a significant financial impact on everybody who has panels and is set up with net metering.”

An uncertain path forward

However, clean energy advocates say they have seen some signs in recent months that the commission might not be paying much attention to the benefits the system creates, while seeking out evidence that net metering creates a cost burden for consumers who aren’t part of the program. 

“The concern is that the chair is looking for a cost shift and is going to do whatever it takes to find one,” Evans-Brown said. 

Last spring, the commissioner requested a series of records in the case, several focused on gathering information about other states’ net metering programs — information that did not seem relevant to the decisions needed in New Hampshire, Evans-Brown said. The commission also requested, in a different docket, information about stranded cost recovery, which it then placed into the record on the net metering case as well, a move energy advocates interpreted as an attempt to focus on costs to the exclusion of benefits.

Then, in hearings on August 20 and 22, the commissioners asked questions that seemed focused on finding costs being passed on to consumers, even though there is simply no such evidence on the record, Krakoff said.

Advocates’ concerns are magnified by the commission’s history: In 2021, the commission drastically reduced funding for the state’s energy efficiency rebate and incentives. Though the utilities, consumer advocates, and environmental groups had come to an agreement to raise funding for the programs, the commission claimed that the program would burden consumers and that the state should focus on promoting market-based energy efficiency services. 

Current commission chair Daniel Goldner was one of the commissioners who signed the energy efficiency decision. During his confirmation hearing earlier that year, Goldner expressed skepticism about climate science, and advocates raised concerns about his lack of experience in the energy field.

“They expressed strong skepticism of energy efficiency and actually gutted the program,” Krakoff said, comparing that case to the present-day net metering proceedings. “It’s very concerning.”

Now advocates, homeowners, and other stakeholders can only wait to see what the commission decides and when they decide it. An order could come by the end of the year, said Evans-Brown, or the commissioners could decide to push the matter well into the new year — there are no deadlines set on the process. 

Should the commission in some way reject the settlement, there is still hope the legislature would take action to protect net metering. As part of the proceeding, state Sens. Kevin Avard, Howard Pearl, and David Watters submitted a letter explaining their belief that reducing net metering compensation would be against the goals of the legislature. 

“It is the intent of the legislature to preserve a viable net metering program in the state of New Hampshire, and we will take action to do so if necessary,” they wrote.

Resolving the question through legislative action, however, would leave the matter open and undecided for even longer, making it harder to encourage solar development in the state, advocates noted. 

“We were expecting this to be a challenging docket when this was first announced,” Evans-Brown said. “It’s frustrating, but not surprising.”

In net metering case, New Hampshire regulators focus on costs while ignoring benefits, advocates say is an article from Energy News Network, a nonprofit news service covering the clean energy transition. If you would like to support us please make a donation.

Correction: This article was updated to correct the amount that MGE compensates customers for the energy they send back to the grid. It is currently 16.6 cents per kilowatt-hour.

Wisconsin utility MGE is proposing to drastically scale back the net metering rates that residents are paid for their solar generation, putting residential customers with small arrays on the same distributed generation program as commercial customers with large arrays.

Advocates are asking the state Public Service Commission to deny the proposal in MGE’s ongoing rate case and instead continue studying how utilities can best compensate customers for solar.

Under the MGE proposal, customers who install solar after 2024 would receive about 7 cents per kilowatt-hour, as opposed to about 16.6 cents now, for the energy they send back to the grid. The new compensation rate is currently applied to large customers, based on the market and capacity prices set by the MISO regional transmission organization.

Another Wisconsin utility, Alliant Energy, is also proposing major changes to net metering in its rate case, including calculating compensation on an hourly basis instead of monthly and reimbursing customers more for their energy during peak demand periods. Alliant spokesperson Tony Palese said this means customers could be paid anywhere from 7.9 to 13.5 cents per kilowatt-hour for their energy, depending on when it is sent to the grid. That compares to the 7.1 cents per kilowatt-hour that Palese said residents are currently paid.

Palese said the proposed changes will actually increase the total amount Alliant’s customers with solar are paid, and “ensure homeowners that generate solar energy at peak times can offset their consumption at the peak retail rate or sell energy they don’t use to Alliant Energy at the peak buyback rate.” 

Clean energy group Renew Wisconsin worked with Alliant on an agreement that through 2025, customers can choose whether to stick with the previous net metering plan or enroll in the new program, called Power Partnership. The agreement also stipulates that Alliant will provide the information necessary for customers to calculate the expected payback period for their solar installations. 

“Transitions away from net metering are rarely this favorable to solar customers,” Renew said in a press release.

Meanwhile, solar advocates say the Alliant and MGE cases taken together show that the Public Service Commission should come up with a uniform policy for compensating residential solar generation, rather than allowing “ad-hoc major reforms utility by utility,” as Renew policy director Andrew Kell said in testimony before the commission. 

Calculating costs 

Jeannette LeZaks, an MGE customer, installed a 5.4-kilowatt system two years ago. Under MGE’s proposal, the current net metering policies will continue to apply to existing solar arrays.. But she worries fewer people will be able to install solar in the future if MGE’s proposal is approved. 

“If we didn’t have that net metering, the equation becomes different,” she said. “It would come down to wanting to do it to help the climate crisis or feel like you’re producing your own electricity. But for those where money would be an issue, they might choose not to purchase solar. That would be unfortunate blowback to what seems to be a very enthusiastic embrace of solar.” 

MGE, which serves the Madison area, has argued that with increasing numbers of customers installing solar, those without solar are paying an unfair amount for grid upkeep.

In testimony, MGE rates director Brian Penington said that in 2024, about 2,100 customers are expected to sell energy back to MGE at a total cost of about $2.1 million — paid by the utility’s overall customer base, at rates higher than they could get from the wholesale market. The average size of residential systems is increasing, and the utility expects 350 to 400 new residential solar systems to be installed each year, including with incentives from the Inflation Reduction Act, Penington testified. 

He said the current net metering structure means customers with solar are “utilizing the MGE system as a virtual bank or battery.” Replacing the retail rate they are paid for electricity with the market-based lower rate would reduce costs for purchasing distributed solar.

“This proposal also will ensure that solar energy produced by our customers and sold to MGE will be compensated at the same rate (by transitioning to one rate) when purchased by the utility on behalf of all customers, regardless of the size of the customer’s system,” said MGE spokesperson Steve Schultz. “It also helps to maintain energy affordability for all customers. These solar purchases are considered ‘fuel costs’ and are paid by all other MGE electric customers.” 

Solar advocates have long pushed back against this “cost-shifting” argument, noting that solar reduces the need for costly new generation or running peaker plants during heavy demand periods, and makes the grid more resilient for everyone.

Wisconsin Citizens Utility Board director of regulatory affairs Corey Singletary testified to the commission that there may be an imbalance in the current amount customers with and without solar are paying, but revised compensation structures must take into account the full, long-term value that distributed solar provides to the system. This includes decreased transmission needs, he noted, and he called MGE “disingenuous” in arguing that customer solar does not provide transmission value. 

A holistic approach 

In intervenor testimony, Kell said approving MGE’s proposal would contradict the purpose of the Public Service Commission’s ongoing investigation of parallel generation purchase rates. He said that study “is a more appropriate forum to consider a new precedent that would ultimately change [net metering] policy.”

Net metering rates or other compensation for distributed solar should be based on the avoided costs for generation, transmission, distribution and capacity, Kell said in his testimony, as well as the environmental benefits. 

“This approach will allow the Commission to develop a glidepath framework for utilities to adopt and implement as various standards are met and milestones are observed” in distributed solar penetration, he testified. 

Kell noted that states like Hawaii and California have much higher proportions of solar on their grid — at 17.6% and 8.7% of net metering participation, respectively — and still offer net metering policies. Wisconsin is only at 0.3% net metering participation, similar to Minnesota and Michigan, and below Illinois and Iowa at 0.6% and 0.5%. 

Along with the net metering changes, MGE proposes to offer a one-time $200-per-kilowatt incentive payment for solar, limited to 400 customers per year and to 5 kW per customer. The utility I&M made similar changes in its rate case for Southwest Michigan customers last summer, which were opposed by clean energy advocates and legislators.

Modeling by MGE and Kell showed that the proposed changes will shift the payback period for a typical residential solar installation from 9 years to 16 years. In response to the Energy News Network, MGE said that with the upfront payment, payback times would be similar for systems that are sized appropriately.

“Customers who participate in net metering will continue to see savings from offsetting their own energy use with the electricity generated by their own solar when it’s sized for their own usage,” Schultz said. “Our proposal only addresses the price of the energy the customer is not using and selling to [or] being purchased by MGE on behalf of our other electric customers.”

Renew clean energy deployment manager Michael Vickerman, in his testimony with the commission, called MGE’s proposal a “double whammy,” since it not only lowers compensation rates for solar but switches from monthly to instantaneous calculations. Solar advocates have said that is not “net metering” at all, since customers can’t offset their bills with credit for the energy they’ve generated unless they use that energy at the moment it’s created. If customers are paid anything less than the retail rate for the energy they send back to the grid, this means instantaneous netting will mean less savings for customers than longer netting periods. 

Vickerman noted that customers are most likely to be generating solar during the day, when they will be compensated at lower rates than in the evening, when demand is high as people get home from work and turn on lights and appliances. 

In his testimony, Vickerman said he finds the “incentive structure to be contrary to Wisconsin’s clean energy goals. Solar PV can provide substantial benefits to MGE, including the supply of electricity at fixed prices during peak system hours. … Removing this generation from the grid would only further extend the need for MGE to maintain its existing fleet of peaker plants to meet system demand, facilities which produce substantial greenhouse gas emissions.”

As Wisconsin utilities go their own way on net metering, advocates seek a unified approach to solar is an article from Energy News Network, a nonprofit news service covering the clean energy transition. If you would like to support us please make a donation.

New Hampshire’s electric utilities have come out in favor of continuing the state’s current system for compensating customers who share surplus solar power on the grid.

Eversource, Unitil, and Liberty Utilities surprised clean energy advocates by submitting joint testimony to state regulators last month endorsing the state’s current net metering structure. The program credits customers roughly 75% of the standard electricity rate for any unused solar generation that flows back onto the grid and is used by other customers.

“I am delighted that our utility friends have come over to our way of seeing things,” said Sam Evans-Brown, executive director of Clean Energy New Hampshire. 

The utilities’ testimony is part of New Hampshire’s current deliberations over whether the state’s net metering rules should be adjusted. The process in New Hampshire is playing out as many other states are also debating what role net metering should play in the transition to clean energy. 

Net metering provides an important source of revenue for solar customers when their generation doesn’t perfectly match their electricity use, but critics contend that it unfairly shifts costs to consumers who don’t generate their own renewable energy. 

“I think renewable energy is great,” said Rep. Michael Vose, chair of the state House’s Science, Technology and Energy Committee, who has supported bills that would have cut net metering rates. “If people can afford to buy it and want to buy it, they should go ahead, but I am not in favor of subsidizing renewable energy and shifting costs to people who don’t directly benefit from that renewable energy.”

New Hampshire’s current rules, put in place in response to 2016 legislation, replaced a previous system that gave participants credits equal to the price utilities charge customers for electricity. This same law also required the state to conduct studies on the impact and effectiveness of net metering and make changes to the regulations if the findings warranted.

The net metering debate

Previously, the utilities had advocated for much lower rates for net metering customers. Nationally, utilities have often taken the same position as well, arguing that higher net metering rates push costs onto customers who can’t afford to buy solar panels.

At a glance, it’s easy to dismiss: if a homeowner sends 1 kilowatt-hour of power to the grid and receives a credit worth the price of 1 kilowatt-hour, it would seem everything should come out even. But the retail price of electricity includes more than just the cost of the power itself — everything from the salaries for lineworkers who do maintenance to the cost of debt on construction projects to keep the wires and poles safe and reliable. 

“The whole system is packaged up and rolled into the price,” Evans-Brown said. 

So when a homeowner receives a full retail credit for their power, they are getting paid for more than just the energy they are providing, increasing the cost to run the utility. These costs are then passed on to the utility’s entire consumer base. A lower net metering credit means less of this sort of cost shifting and, some argue, a fairer deal for customers without solar. 

The gap between net metering rates and utility costs can be even more pronounced at certain times of day. In the early afternoon on a sunny summer day, demand on the grid is low, meaning the price for power from the grid drops as well. At the same time, solar panels are producing plenty of excess energy. Utilities can end up paying higher rates for this electricity than they would have had they been buying from a power plant, at a time when excess residential solar energy wasn’t even needed to help meet high demand. 

“Solar does not make the grid more reliable or resilient, nor does it improve power quality in any way,” Thomas Meissner, chief operating officer of Unitil, testified in 2016.

Supporters of a strong net metering rate, however, argue that net metering creates an array of benefits for utilities that solar generators should be compensated for. The report produced in accordance with the 2016 law notes that solar can reduce capacity payments the utilities must make, reduce the cost of complying with renewable energy standards, and lower the amount of power lost traveling through transmission lines, among other benefits. 

Utilities, however, have generally downplayed these benefits. However, in their joint testimony, the utilities go so far as to praise the economics of the system.

“New Hampshire’s net metering policy — which is among the most balanced in New England — has been effective in encouraging the growth of [solar] resources in our state, and there is no evidence that the current compensation level is creating unjust cost shifts,” said Eversource spokesperson William Hinkle, after the testimony was filed.

The future of the policy

The state report presents similar findings. It concludes that distributed solar generation should provide increasing value to the grid over the next 12 years. It also found evidence that limited cost shifting would occur, increasing the average residential bill in the range of 1% to 1.5%. 

Supporters of net metering say this number is so small that it is an acceptable price to pay for the benefits of increased renewable energy. Vose, however, is concerned about any increased costs for consumers who have not chosen to install solar panels. 

“That is one of the problems we’ve tried to ameliorate, to minimize such cost shifting whenever possible,” he said.

Nationally, net metering remains contentious in many states. For example, North Carolina’s public utility authorities have angered environmental groups and many in the solar industry by approving a utility plan to reduce payments to net metering customers. And earlier this year, California cut rates by about 75% for new net metering customers, with utilities pushing for even more cost-cutting concessions. 

“They’re hugely disincentivizing rooftop and community solar,” said Patrick Murphy, senior scientist at PSE Healthy Energy, who researches clean energy transitions and energy equity.

Overall, the more a state lowers its net metering credits below the retail price, the more likely utilities are to embrace — or at least accept — the program, Murphy said. In New Hampshire, the reduction from full retail price to 75% has been enough to satisfy utilities. 

The New Hampshire net metering docket remains open and the matter is under consideration by the Public Utilities Commission. Vose thinks it very possible that net metering rates will be further lowered. Evans-Brown, however, thinks the utilities’ recent testimony could have a significant influence toward keeping the current system in place. 

“This makes it more likely that we will get a favorable outcome,” he said.

In unexpected move, New Hampshire utilities voice support for solar net metering is an article from Energy News Network, a nonprofit news service covering the clean energy transition. If you would like to support us please make a donation.

Indiana solar installers knew their customers would be worse off when new, reduced rates for surplus solar generation took effect on July 1.

But changes being ushered in by utilities go far beyond what the industry had been bracing for, say solar and consumer advocates who are now challenging regulators’ interpretation of a 2017 law that gutted net metering.

All five of Indiana’s investor-owned utilities have won approval to not only slash the rate paid for customers’ surplus solar power, but also change how solar output is calculated in a way that drastically reduces the payments.

Utilities say they are protecting other customers from subsidizing those with solar panels, but advocates say the outcome threatens to put rooftop solar out of reach for all but the wealthiest customers.

“Unfortunately, utilities used the opportunity to completely change the policy, and [state regulators] went along with what utilities wanted,” said Ben Inskeep, program director at Citizens Action Coalition, a consumer and environmental advocacy group based in Indianapolis.

‘No netting’

Indiana solar customers until now have been paid for extra solar generation at the end of each billing cycle. The amount of electricity sent back to the grid that month is subtracted from the amount of power the customer used from the grid, and any extra is paid out at a rate lower than the retail rate but robust enough to make solar panels financially viable for many customers.

The arrangement allows a homeowner, for example, to use extra daytime solar generation to offset evening grid power use, but they can’t bank solar credits in the summer to reduce their electric bill during the darker winter months.

A bill (SA309) signed by Gov. Eric Holcomb in 2017 put the state on a path to phasing out net metering by 2047. Meanwhile, it let utilities begin paying solar customers a lower rate when solar penetration reached 1.5% of their summer peak load, or by July 2022.

CenterPoint, previously known as Vectren, was the first utility to reach that benchmark and early last year filed a request to institute the new, lower rate — known as the “excess distribution generation” or EDG rate. CenterPoint also proposed switching from monthly net metering to a new model known as “instantaneous netting,” in which customers pay the full retail rate for all power used from the grid, and all solar power sent back to the grid is paid at the much lower EDG rate. The arrangement turns out so badly for customers that advocates like Inskeep refer to it as “no netting.” 

The Indiana Utility Regulatory Commission approved CenterPoint’s full request in April 2021 despite arguments from consumer and solar advocates that the plan oversteps what’s called for in the 2017 law. 

“SA309 does not authorize instantaneous netting. It made no mention of changing the netting interval,” Inskeep said.

In March 2021, NIPSCO had submitted testimony seeking an EDG tariff with monthly netting. But NIPSCO withdrew that proposal and sought instantaneous net metering after the commission’s decision on CenterPoint. Utilities AES, Indiana Michigan (I&M) Power, and Duke Energy also sought the same instantaneous netting arrangement. The commission approved all of the proposals — most recently Duke’s on July 6.  

Cost shifting?

The Office of Utility Consumer Counsel, a governmental office set up to advocate for consumers, joined solar advocates in arguing against instantaneous netting, saying it would be inconsistent with SA309. 

But the commission has argued, including in its Jan. 26 approval of I&M’s proposal, that the intent of SA309 was to end net metering, and instantaneous netting would basically be a way to do that. The commission acknowledged that customers would save less money through instantaneous netting, but invoked an argument long used by utilities against solar energy: that the savings of customers with solar would be costs shifted onto customers who don’t have solar.

Duke Energy echoed this sentiment in response to Energy News Network questions about the change to instantaneous netting.  

“The intent of the legislation is to help ensure that customers who do not own solar generation are not subsidizing those who do,” said Duke spokesperson Angeline Protegere, noting that 2,600 customers in Duke’s Indiana service territory have solar. 

“Even though they generate some of their own power, solar customers still rely on electric infrastructure such as power lines, and the new rate reflects the costs of that. It’s important to realize that customers ultimately pay for the credits we give to solar customers.”   

Legal wrangling 

Advocates including the Indiana Distributed Generation Alliance and Citizens Action Coalition appealed the commission’s decision on CenterPoint’s proposal and won a favorable ruling in the Indiana Court of Appeals.  

But now the matter is before the state Supreme Court, and the appeals court decision is negated until the higher court hears the case, with oral arguments scheduled to start Sept. 15.  

“This is a matter of law,” said Laura Arnold, executive director of the Indiana Distributed Generation Alliance. “The commission and CenterPoint have been trying to portray that the General Assembly intended to allow instantaneous netting, but that is just not true.” 

Under SA309, the EDG rate paid for energy from solar is equivalent to 125% of the average hourly market rate during that month. Using this calculation, CenterPoint originally proposed to pay their customers 3.1 cents per kilowatt-hour for solar, and NIPSCO proposed 2.6 cents. 

Utilities have increased the prices they plan to pay customers for solar as market power prices have risen due to the war in Ukraine, to the 4 to 5 cents per kilowatt-hour range; meanwhile retail prices customers pay for power from the grid have also risen. Duke’s retail rate is 16 cents per kilowatt hour for an average residential customer, Protegere said. (CenterPoint and NIPSCO did not respond to requests for comment.) 

Brad Morton, founder and CEO of Morton Solar, told the commission that the switch to instantaneous netting and EDG rates “grossly lengthens the customer investment pay-back period,” with instantaneous netting at the 3.1 cents per kilowatt-hour originally proposed by CenterPoint changing the typical residential solar payback period from the current 7- to-10 years to 21 years.  

The 3.1-cent payment rate alone, without instantaneous netting, would result in a typical payback period of 14 years, he testified. When the phaseout of the federal Investment Tax Credit is added to instantaneous netting and the EDG, it would take 25 years for a typical solar system to break even, Morton said.  

Crushing a bloom 

Morton was the first to install solar in Vectren (now CenterPoint Energy) territory, he told the commission, and among the first to do grid-tied solar in Indiana. His family members had worked in Indiana’s coal mines, and he wants to help transform former coal mine land into solar fields, replacing declining coal mining jobs and revenue with a solar economy in the process.  

Last year Morton did $2.5 million worth of solar installations in Vectren’s service area, and $3.1 million in Indiana as a whole. If the instantaneous net metering goes forth, he said he might have to stop doing business in Indiana altogether, and lay off some of his 17 staff members.

“This will be devastating to Indiana’s fledgling solar industry and result in job losses and probable market contraction to an industry that was just beginning to blossom,” he testified.  

Customers who have recently installed solar are exempted for a decade, governed by the old terms through 2032. But that just barely covers a typical pay-back period, so right when customers would have hoped to start reaping the savings of solar, the opportunity will stagnate. Customers — like Arnold herself — who installed solar before SA309, can net meter under previous terms until 2047.  

Arnold said that if utilities get their way and institute EDG plus instantaneous metering, solar would only make sense for most customers if they have a battery system to use all their energy themselves rather than sending it back to the grid for pennies. But batteries cost thousands of dollars and make the already slim margins on solar unworkable for many customers.  

She noted that if “no netting” takes effect, customers would rarely install solar systems that generate more power than they need at any given time, wasting the chance to get more clean power on the grid by installing larger systems.  

Arnold added that on top of the gloom facing the solar industry for years to come, there is debilitating uncertainty for customers who’ve signed solar contracts and hoped to install them by the end of the year. Duke Energy and NIPSCO have told customers they could qualify for previous net metering terms if their solar is contracted now and installed by the end of 2022. Protegere confirmed that is Duke’s plan.

But Arnold said solar developers and lenders are worried that the commission might block this arrangement, perhaps if another utility complains.

Arnold said that months ago, advocates had asked the commission to issue an opinion clarifying the deadline, to provide certainty for developers and customers, but the commission has not done so.  

Inskeep noted that the changing price of power — and hence the 125% EDG rate people are paid for solar sent back to the grid — means uncertainty for anyone who is considering solar.   

“It’s hard to say what your compensation will be in the future — it will change every single year,” said Inskeep, who was principal energy policy analyst at EQ Research, a clean energy consulting firm, at the time the commission decisions were playing out. 

“You’re making a 25-year investment, but the value is updated on an annual basis. You have no ability to see if your investment will pay off. Utilities never make large investments for 30-year assets without having certainty for that cost recovery. Now they’re asking residential customers to take that risk — with no ability to understand when their investment will pay off or if it will never pay off.”

In Indiana, solar net metering rules go from bad to worse is an article from Energy News Network, a nonprofit news service covering the clean energy transition. If you would like to support us please make a donation.