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Missouri’s Solar Problem: Too Many People Like It

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"Missouri’s Solar Problem: Too Many People Like It"

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Missouri has been heavily dependent on coal for decades, but the state is on the cusp of a solar revolution. The state had just 39 megawatts of solar installed at the end of 2013, putting it in 17th place nationally. But by mid-2014, as much as 110 megawatts of solar is expected to be online, potentially making Missouri a solar leader in the Midwest.

Unfortunately that could be the end of the solar story in Missouri. Just as the state is picking up serious momentum, the solar rebates that have helped propel the growth are abruptly ending, six years before the gradual phase-out that had been planned.

“We want off the solar coaster,” Heidi Schoen, executive director of the Missouri Solar Energy Industries Association told EnergyWire. “We don’t want to be in this boom-and-bust situation.”

Despite its enormous impact, Missouri’s solar rebate program is still relatively new. It came into being in 2008, with the passage of Proposition C, a ballot initiative that required investor-owned utilities to derive 15 percent of their electric generation from renewable resources by 2021 — including 2 percent from solar energy. To help jumpstart solar development in a state where 4 out of 5 homes are powered by coal, the successful ballot initiative required utilities to offer a $2-a-watt rebate for solar installations, with a maximum rebate of $50,000 per installation.

For the average homeowner, the rebates meant that the price of a typical, residential 5-kilowatt array was about $10,000 instead of $20,000.

The legislation, however, had one huge key caveat — it stated that if meeting the renewable standard led to rate hikes for customers of more than 1 percent, utilities would no longer be required to comply.

And last year, Missouri’s two largest utilities announced that they had met that 1 percent cap on rates and asked that the rebate program be suspended indefinitely.

After much negotiation, the utilities and solar installers agreed on something approaching a compromise — a finite pool of rebate funds that was intended to soften the otherwise brutal blow to the solar industry. The $175 million set aside for rebates was, however, devoured by Missourians still eager to get solar, and the money was gone within weeks of being announced, with $25 million in applications on a waiting list, in case a project doesn’t move forward.

There are several bills in the Missouri Legislature to restart the solar rebate program in the state, but with the current legislative session drawing to a close with the bills still in committee, their prospects look dim.

One of the bills would revive solar rebates on a more limited scale — just for schools and nonprofits. The other option under consideration is to restart the rebates under Missouri’s 2009 energy efficiency law.

“We’re going to lose half our employees, at least,” Rick Hunter, chief executive of Microgrid Solar, one of the largest installers in the area told the St. Louis Post-Dispatch. “And we’re gonna be better off than most companies. … We were up to 75 employees and we’re expecting to be less than 40 before the end of the summer.”

The Missouri Solar Energy Industries Association estimates that if the rebate had stayed in place, the solar industry would have added a total of $415 million to the state’s economy and more than 3,700 jobs by the end of the year. Missouri even ranked in the Top Ten States for Clean Energy Job Announcements in 2013 by the national group Environmental Entrepreneurs.

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