Third-party solar, also known as Third-party ownership, takes two forms— a solar lease or a power purchase agreement. The lease option is similar to how you would lease a car, paying for the system’s use over time. The power purchase agreement would allow you to purchase the system’s energy from the installer at a rate lower than you would normally pay for energy. Both options for a more affordable pathway to solar exist but are caught in a legal gray area for Wisconsinites, but that doesn’t mean it’s never been allowed in the state.
Around 2020-2021, there were some Wisconsin utilities that allowed TPO. At this time, WE Energies notably blocked installations in Milwaukee that would have utilized TPO arrangements.
Requests for the Public Service Commission of Wisconsin (PSC) to weigh in on legal clarity were unsuccessful until 2022. The PSC took up two “declaratory ruling” requests, ultimately approving a request to allow TPO on a case-by-case basis and rejecting a request to instead appoint criteria for TPO.
Utilities challenged the PSC ruling approving an instance of TPO on a case-by-case basis. The family involved in the ruling moved before there was resolution in a case that would have provided clarity on the matter. Without a customer for the solar system, the PSC ruling was invalid. It is possible that another person or organization could seek approval for a TPO solar system, but it hasn’t happened yet.
These days, utilities seem unified in their approach to block the TPO option in their territories. For the most part, electric utility cooperatives take a similar approach to TPO.
Though it’s our position that TPO could be allowed under current law, there are conflicting interpretations of the law resulting in legal uncertainty. The disagreement comes from the state statute that says only utilities are able to sell power to the public. With TPO, it has long been our view that a customer involved in a TPO contract is not the general public and that this would be a business transaction rather than a utility transaction.
We also recognize that all Wisconsin utilities are actively blocking TPO during the interconnection process, and the PSC is not able to stop them. Wisconsin solar installers should know this history and avoid offering TPO at this time. If an installer is offering TPO in Wisconsin as part of their services, it is either not aware of important regulatory information or is lying to customers.
If you are still considering a TPO offer from an installer, speak to your utility before moving forward with the project.
In the meantime, creating clarity around TPO remains a priority for RENEW. It is our hope that either a case will find its way before the Wisconsin Supreme Court and provide clarity around the use of TPO, or that new legislation can be crafted and passed to create a clear pathway for TPO.
This would allow us to join the 28 other states across the country that have opened a clear pathway to financing options that help more people gain access to the benefits of clean and affordable solar energy.