Shared solar, a concept that could make solar power available to the 80 percent of homes in Connecticut that are otherwise unsuited for it, appears headed for another rocky run through the state legislature.
Last year a bill authorizing shared solar melted down in end-of-session dramatics marked by bickering and finger-pointing over who was to blame for its failure. There were immediate vows to try again this year and many believe something will, indeed, pass.
But the effort is already strained by a new round of who-to-blame for legislation that establishes only two small pilot projects that extend to 2019 instead of a full program that builds on the scores of shared solar projects nationwide. Advocates have been further incensed by the Energy and Technology Committee’s apparent disregard for a study it commissioned by the Connecticut Academy of Science and Engineering (CASE) that advised going ahead with a full program, not a pilot.
“What happened is exactly what I expected to happen – a pilot of two – which is really very frustratingly insufficient given the opportunity for potential projects,” said Rep. Jonathan Steinberg, D-Westport, a committee member who has fought hard for a full program. “Better than nothing, but very little progress given the amount of effort that went into that CASE study.”
While Steinberg did not blame the state’s utility companies directly for scaling back the legislation from its original form as a full program, he noted their continued objections to it.
“A three-year pilot couldn’t have been better for them, and they couldn’t have written it better themselves,” he said. “If their strategy at this point in the game is a delaying or defensive action — it’s going to be a long slog.”
Shared solar – also called community solar – is essentially a virtual solar system for homes that cannot have their own solar panels because their roofs face the wrong direction, are too small, too shaded or otherwise obstructed. It’s also for apartments, condominiums, and rental units that generally can’t benefit from the other solar incentive programs.
Instead, a solar field is installed in nearby available space and homeowners subscribe to it. The local utility credits them for the solar, even though the power goes into the electric grid.
It’s being used in about a dozen states, including Massachusetts, where barely a year after the state’s shared solar program began, some 70 systems are somewhere in development, including two that are running and another half-dozen breaking ground this month.
Massachusetts is “Exhibit A” for people like Karl Rabago, executive director of the Pace Energy and Climate Center at Pace Law School and a member of the CASE study committee, who said there was no point in running a pilot program.
“We know how to build a solar system and divide the credit for its generation among multiple customers,” he said. “I don’t think there’s a good case to be made for starting real small on something that’s been done so many other places. With all we already know from other states, the real question would be what’s keeping you from providing that opportunity to so many more people?”
Rabago, who also spent decades in the utility industry, including as a regulator, is among many who believe that a key target for shared solar should be low-income customers, those who would benefit most from lower and more consistent electric bills and are likely least able to afford solar on their own.
One hurdle at a time
After having fought the losing battle for any kind of shared solar last year, Rep. Lonnie Reed, D-Branford, co-chair of the Energy Committee, said while she still wanted what she called a “full-on program right out of the box,” her first hurdle was getting a bill out of committee.
With a co-chair and two vice chairs raising concerns about a full program — along with other legislators, the governor’s office, the Department of Energy and Environmental Protection, the Public Utilities Regulatory Authority, the Office of Consumer Counsel and the Green Bank — she said she had to revert to a pilot program.
But the bill remains in negotiations, with Reed pushing for at least an expanded pilot that can scoop up low-income people and others, and move faster.
“I don’t want a pilot in perpetuity,” she said. “I want a quick pilot that’s relevant.”
With nearly 400 people submitting form letters to the committee in support of shared solar, Reed said it’s clear appetites have been whetted. “Now they’re educated, they want it and people who haven’t had access to it, want it,“ she said. “We have to make it happen, and we have to make it happen as fast as possible.”
Co-chair Sen. Paul Doyle, D-Wethersfield, a first-year committee appointee, said he wants to be more cautious, but felt the pilot could expand a bit.
“The final bill definitely will not be radically different,” he said. “My bigger concern is we get it right. I don’t want to have this massive launch and then have this negative impact on ratepayers.”
What he’s talking about is concern over how to make up money lost to the utilities when residential customers use solar power.
Who pays for what?
The system in place now is called net metering. It pays customers the going per-kilowatt-hour retail rate for the excess power they put back into the grid.
Because solar customers only use grid power part of the time — mainly at night — what those customers pay for transmission and other charges also goes down. But the state’s two utilities, Eversource and United Illuminating, say it still costs them the same to operate and maintain the lines, poles and other equipment whether a customer uses grid power for just a few hours or all day.
The utilities have continually argued that the extra costs will be footed by those people who don’t have renewables — chiefly, they claim, lower-income people. They contend, as do many utilities nationwide, that renewable energy users should pay extra.
“It’s a cost shift,” said Rep. John Piscopo, R-Thomaston, employing the term used frequently by utilities and their supporters. Piscopo was the only committee member to vote against the pilot project legislation. “Until we can understand what kind of rate cost shift there will be, I would proceed with a lot of caution.”
Piscopo said he doesn’t vehemently oppose the concept of shared solar. He is, however, a board member of the conservative American Legislative Exchange Council, ALEC, that provides model state legislation on subjects it is concerned with. ALEC is on record with specific concerns about net metering that reflect the utility and Piscopo’s positions.
“Who pays for it in the long run?” Piscopo asked. “The money has to come from somewhere.”
Rep. Laura Hoydick, R-Stratford, also a member of the Energy Committee, said she prefers a pilot as a way to sort out the distribution system the utilities will need to manage as renewable energy use grows.
“Let’s figure out how this works, boys and girls,” she said. “I see the proponents of shared solar pushing — ‘that’s the panacea’ — and I don’t think it is. I don’t think we should be jumping into shared solar without testing the waters first.”
Important to many committee members was testimony by the Consumer Counsel expressing similar concerns.
“It’s best to get it right from the beginning,” said Victoria Hackett, a staff attorney in that office. “Who’s responsible if the solar installation works poorly? There are a lot of consumer protection issues that need to be resolved before a large program is launched.”
While figuring out who pays for what would seem to be at the center of the shared solar tug and pull in Connecticut, the underlying issue is the need to modernize the electric grid. Legislation separate from shared solar would have DEEP start figuring out how to do that.
A remodeled grid would probably include ways to incorporate things like shared solar and other renewable energy systems so they can work in large and small pieces that add and subtract power as needed for greater efficiency and lower costs. It would also probably include new regulatory structures for the utilities that would force them into new business paradigms. That eventuality has led many to wonder why they’re not pushing to get ahead of those changes.
Michael West, UI’s vice president for corporate communications, said that’s because they have to deal with the existing regulatory structure. “If the regulatory structure changes,” he said. “That’s a different discussion.”
Value of solar
One of the first pieces the utilities will probably have to deal with — and this is specifically in the legislation — is a new value system for renewable energy that goes beyond the existing net metering. It’s a concept called “value of renewables,” or in this case, “value of solar.”
It calculates an actual cost from traditional factors like generation, transmission and distribution costs, as well as the avoided costs of all those when solar is used. It puts numbers to the value of avoided carbon emissions and other factors, like avoided congestion charges on high power-usage days and the reduced need for new generation. It can also calculate reliability benefits and a number of societal benefits, including environmental ones that might lessen health problems because of lessened use of fossil fuel.
Several states have taken this on – largely showing that the benefits of renewables generally outweigh the dollars-and-cents costs. In Maine, a recent calculation puts the value of solar at 33 cents per kilowatt-hour, more than twice the retail rate of power.
Last month, the environmental advocacy group Acadia Center released its initial value-of-solar calculations for Connecticut. Just assessing its value to the grid without the fuzzier societal benefits, Acadia estimates a range of just over 20 cent to 26 cents per kilowatt hour. The current standard offer rate for Eversource is 12.6 cents per kilowatt hour; for UI it is 13.3 cents.
But these calculations and the overall grid modernization effort are turning into a chicken-and-egg dilemma. Many people would like to see some of these factors — especially the value of solar — sorted out first.
The CASE study was not one of them. It suggested interim pricing for shared solar based on current net metering, but allowing for a switch if the value-of-solar price turns out to be higher.
“With all the policy goals that we have for the state — which are pretty ambitious — and also the resiliency issues that came up through all the storms, you’d actually think that what we’d want to be doing is trying this out as fast as possible,” said Bill Dornbos, Acadia’s Connecticut director and senior attorney. “I just feel like the pragmatic route is available. I’m just not sure why we’re not taking it.”
Dornbos and others believe the state will wind up paying the price in loss of economic growth.
Economic development worries
“For me it’s the economic development opportunity missed,” said Mike Trahan. He is not only the executive director of the solar industry trade group SolarConnecticut, but also the co-creator with Karl Rabago of the Northeast Solar Energy Market Coalition, a regional solar energy business group unveiled last month. Its goal is to increase regional solar.
“From an industry standpoint, we would love the jobs that would come with shared solar or shared renewables, and obviously we’d like to see that as soon as possible,” he said. “You could do shared solar today if everybody was on board.”
Jeff Lord, vice president of project development for Colorado-based Clean Energy Collective, the largest company specializing in shared solar in the U.S., said his company has invested hundreds of millions of dollars in Massachusetts, where it’s handling all the shared solar projects.
“I drive from my home in Connecticut,” he said. “I spend my money and my company’s money in other states right now.”
The two-pilot shared-solar legislation “will not do it,” he said. “It will not attract meaningful investment to Connecticut. This isn’t going anywhere anytime soon.”
That assessment is not lost on Co-chair Reed.
“It’s not a feel-good investment,” she said of shared solar. “It’s jobs; it’s grid security; its grid modernization; economic development. It’s all of the above.”
And she reiterated her goal to strengthen the legislation before the session runs out.
“That’s my plan. Now whether I can do that or not – that’s my plan. Not letting it be killed in its crib was very important to me.”