The Indiana House voted Tuesday for a bill that opponents say will cripple the state’s solar industry.
If enacted, the bill would reduce the amount solar power users are compensated for routing unused electricity back on the grid.
Over the next five years, utilities would reduce net metering — a policy that ensures homeowners are compensated for electricity they add to the grid from solar generation — before bottoming out in 2022. Solar owners will then be compensated at much-reduced level, roughly around the wholesale price for electricity. The bill would also put a legislative cap on the amount of non-utility solar in the state.
“The definite intent is to make sure that homeowners, schools, farmers, and small businesses are not going to be able to afford this in the future,” said Jodi Perras, who manages the Sierra Club’s Beyond Coal campaign in Indiana.
Utilities across the country have campaigned against retail net metering rates, saying that it disproportionately passes costs on to non-solar customers. But proponents of solar say cost-shifting is a myth—and have studies to support their claim. They point out that solar customers are paying for installations, which takes costs away from utilities. Distributed solar also allows for the generation of electricity closer to where it is being used, reducing transmission costs; and solar provides added energy during peak demand, reducing the strain on utilities’ capacity.
The state Senate already passed a version of the bill, and is expected to vote soon to reconcile it with the House version.
Among the changes made by the House was to extend the deadline for being grandfathered into the current net metering rate (where people get a credit on their bill for every kilowatt hour they add to the grid) to January 1, 2018, rather than July 1, 2017, and to keep the grandfathered rate even if the home or business is sold.
“As I understand it, the utilities are supporting the bill as it was passed in the House. Even though they lost some ground, it still has the effect they want,” Perras said.
Gov. Eric Holcomb (R), who replaced now-Vice President Mike Pence (R), has not publicly commented on the bill. Solar advocates are hopeful he will veto it, saying that the legislature is not the appropriate body to make electricity policy.
Generally speaking, utility commissions are in charge of regulating rates and electricity policies. Up to now, Indiana has been operating under the state’s Public Utility Commission (PUC) rules, which set a cap on distributed solar at 1 percent peak summer load. The new rule would move the cap to 1.5 percent.
The bill “takes away the authority of the utility regulators to set the rate,” Perras said. “Rates need to be set in a just and reasonable way by our utility commission.”
Perras noted that the 1.5 percent is “still on the low side” — for instance, California’s cap is 5 percent, and she criticized the state’s utilities for pushing the change through.
“The utilities are acting like there is this great big emergency in Indiana, because some of the utilities might be reaching the 1 percent cap in the next few years,” she said. “A lot of other states are quite above that and aren’t experiencing any dire emergency.”
According to the Solar Energy Industries Association (SEIA), 2,700 people in Indiana work in solar. Indiana is also one of the top 10 coal-producing states in the country. The entire mining industry employs 2,500 people, according to state data.