Third Party Solar Financing Takes Center Stage

Third Party Solar Financing Takes Center Stage

After simmering on the proverbial back burner for nearly two years, the third-party financing issue relating to customer-sited solar power has been thrust back into the public spotlight as pressure builds to resolve the legal questions surrounding it.

The reemergence of this issue can be traced to two parallel developments. The first is a Public Service Commission (PSC) proceeding moving toward a ruling settling the legality of third-party-owned solar systems serving individual retail customers. The second is a lawsuit recently filed by the Midwest Renewable Energy Association in Portage County Circuit Court, challenging the PSC’s authority to regulate the financing of behind-the-meter systems that serve host customers only.

The PSC proceeding began in March 2019 when Eagle Point Solar, a Dubuque-based solar contractor, filed a complaint against We Energies for blocking the installation of rooftop arrays serving the City of Milwaukee. In its complaint, Eagle Point contends that PSC Chapter 119, which regulates the interaction between small-scale electricity producers and the utility grid, does not give We Energies the right to deny interconnection to a customer based on how the generating equipment is financed. According to We Energies, however, a third party owner of the equipment that supplies electricity to one customer under contract should be regulated as a public utility.

Following an extended period of legal maneuvering, the PSC set in motion a process for investigating Eagle Point’s complaint (Docket 9300-DR-104). In so doing, it expanded the scope of the proceeding to consider the public utility question that led to the interconnection denial. When the parties finished entering evidence into the hearing record, the PSC opened a public comment window on the proceeding, which ended on February 23rd.

Supporters of third-party financing sprang into action, led by RENEW. To illustrate the breadth and depth of support for opening up the solar market in this fashion, RENEW circulated an action alert encouraging those who care about this issue to submit comments supporting Eagle Point’s position. Networks such as Wisconsin Climate Table, Wisconsin Health Practitioners for Climate Action, and our own solar contractor e-mail list helped circulate RENEW’s alert beyond our own activist base. At the same time, organizations such as 350 Madison and Environmental Law and Policy Center (ELPC) asked their activists and members to post comments on the PSC website.

As a result of our combined efforts, a total of 336 individuals and organizations weighed with their views on the Eagle Point matter. Of that, 327 comments expressed support for opening the market to allow third-party ownership of solar electric systems in Wisconsin. In that overwhelming display of support, several themes prevailed, including the following:

  • Third-party financing is already expressly authorized in 28 states;
  • Allowing third-party-owned solar systems is consistent with Wisconsin case law;
  • The threat of being regulated as a public utility discourages businesses from providing solar power generated onsite to retail customers through leases and sale agreements;
  • Third-party financing would make solar power affordable to low-to-moderate income households and nonprofit entities such as schools;
  • Expanding solar financing options would help communities reduce their reliance on harmful fossil energy sources; and
  • Expanding solar financing options would invigorate local economies.

These arguments track closely to those articulated by Wisconsin solar contractors and consultants in a March 2019 filing urging the Commission to approve Eagle Point’s petition. Similar to our efforts during the comment period, RENEW shaped the themes in that statement and pulled together a coalition of market actors to demonstrate support for third-party financed solar energy. In the intervening two years, Eagle Point Solar and the City of Milwaukee labored to amass a set of facts and legal arguments to support a finding that WEPCO’s action was unlawful.

The merits of this case are clear-cut, as are the regulatory remedies. Other states that regulate electric utilities have taken steps to affirm the legality of third-party-financed solar, most notably Iowa, which did so in 2014, the result of a long and expensive legal fight waged by Eagle Point. In contrast to Iowa, the State of Wisconsin has allowed this issue to languish for many years without resolution.

But with the filing of briefs from parties on March 10th, the Eagle Point proceeding has finally reached the home stretch. The strong outpouring of public support for third-party financed solar tells us that a policy call from the PSC is long overdue.

In a brief representing RENEW and other solar advocates, we urged the PSC to take the following actions:

  • Order WEPCO to interconnect the City of Milwaukee solar projects, regardless of how those projects are financed;
  • Clarify that a utility may not deny interconnection based on project ownership, and
  • Clarify that third-party owners of customer-sited distributed generation are not “public utilities” under Wisconsin law.

RENEW would like to thank Eagle Point Solar and the City of Milwaukee for leading this crucially important regulatory battle, ELPC for drafting a particularly persuasive legal brief on behalf of clean energy advocates, and the 327 commenters who affirmed their desire for an expanded solar marketplace free of utility interference.

Onion River Solar Farm

Onion River Solar Farm

Onion River Solar is a proposed 150-megawatt solar generating facility to be located in southern Sheboygan County that will feature a prairie and pollinator environment.  Ranger Power is developing the project and others in the state, including Badger State Solar and Crawfish River Solar, in Jefferson County, and Western Mustang Solar in northwest Wisconsin.

Photos from the North Star Solar project in North Branch, Minnesota, illustrate the type of pollinator and prairie habitat that will accompany Onion River. While grazing is not yet part of the Onion River project, the North Star Solar photos demonstrate the potential to graze livestock between solar panel rows, an exciting opportunity for solar in Wisconsin.

The Onion River Solar project will produce clean, cost-effective electric energy for Alliant Energy customers, provide a diversified income source for local farmers, and generate significant tax revenues for the town and county. This project can improve environmental outcomes ranging from reduced air emissions, reduced chemical use on local farmland, increased grassland and pollinator habitat and improved downstream water quality in parts of the Onion River watershed.

Onion River Solar is anticipated to avoid the generation of over 400 million pounds of CO2 per year. For more information on solar farms’ potential to reduce air emissions, you can see RENEW’s analysis of the 250 MW Darien Solar Farm’s health benefits.

The solar farm is expected to generate $250,000 per year in new revenue to the Town of Holland and $350,000 per year to Sheboygan County.  Local governments can use these funds to meet pressing local budget priorities.

Onion River Solar represents a significant step forward to build Wisconsin’s renewable energy capacity and to shift away from fossil fuels.

The Public Service Commission is accepting comments on this project which must be received no later than Tuesday, March 16, 2021.

Additional project information, including a map, are available at www.OnionRiverSolar.com. If you have questions, please contact the project at (888) 898-8878 or info-wisconsin@rangerpower.com.

Distributed Generation in Wisconsin: The Policy Changes We Need to Grow the Market

Distributed Generation in Wisconsin: The Policy Changes We Need to Grow the Market

COAUTHORS: Michael Vickerman and Lauren Reeg

Wisconsin’s distributed generation (DG) renewable energy market lags behind comparable states.[1]  As seen in other states, DG helps diverse groups of individuals and organizations, including businesses, residents, renewable energy customers, and future renewable energy customers, gain access to renewable energy and create a more fair and navigable market.

Whether it takes the form of behind-the-meter generators powering individual customers or larger projects feeding power directly into the distribution grid, DG is a vitally important segment of the renewable energy landscape. Customer investments drive these installations with benefits extending to Wisconsin businesses, residences, governments, nonprofits, and their communities.  DG clean energy investments help spur local economic investment, support clean energy jobs, and save Wisconsin money that otherwise would have been spent on importing fossil fuels.

It has long been RENEW’s view that a more fair, clear, and consistent regulatory environment could strengthen the DG market and accelerate the transition to renewable energy in Wisconsin.

In June 2020 the Public Service Commission of Wisconsin (PSC) convened an investigative docket” (5-EI-157) to identify regulatory barriers that effectively put a tight lid on Wisconsin’s DG market, especially customer-sited DG.

This investigation is structured to encourage input and recommendations from organizations and entities that support small-scale DG. RENEW has assembled an expert legal and technical team for this docket—Tim Lindl and Melissa Birchard of Keyes and Fox, and Justin Barnes of EQ Research.  We invite you to review the legal and policy analysis we provided to the PSC in August 2020 and in January 2021.[2]  A coalition of organizations (Clean Energy Advocates) joined our comments to the PSC, demonstrating broad support for an improved DG market. This ongoing investigation is the best opportunity we’ve had in more than 10 years to advance renewably powered DG before the PSC.

The success of this campaign will strengthen and expand the renewable DG market in Wisconsin. If you support this work, please consider a donation to RENEW today. Together we can champion renewable energy growth in Wisconsin and we are poised to make significant progress in 2021. Join us today!

Wisconsin has fewer net metering customers than comparable states

Net metering customers represent an important segment of the renewable energy market, however, Wisconsin is falling behind. In the last four years, net metered customers in Wisconsin have grown by only 0.11%, well below the increases seen elsewhere in other states since 2015.

Fair and clear distributed generation policies would grow the renewable energy market in Wisconsin

RENEW Wisconsin aims to enlarge the market share for non-utility-owned renewable DG, including both self-supply and grid-supply projects. In furtherance of that goal, we’ve developed a number of principles that should inform decisions rendered in the DG docket. These include:

  • Ensuring developer access to standard offer contracts that have terms for reasonable compensation.
  • Giving developers insight into system and utility resource needs to help them target their planned investments.
  • Provide larger energy users with better and less restrictive opportunities for larger self-supply resources.
  • Standardize and improve net metering rates for all customers across Investor-owned Utilities (IOUs).

In addition to behind-the-meter systems, RENEW has also set forth a path for front-of-meter renewable generation projects up to 20MW. These types of projects should be eligible for 20-year standard offer contracts that are pegged to the same methodologies that utilities use when assigning value to their own generation projects. Leveling the playing field for compensating solar is essential to increasing customer investment opportunities, and expanding the solar workforce.

RENEW is optimistic that by the end of the docket the PSC will land on several beneficial policy changes for promoting renewable DG. These policy changes could be taken up later this year through the anticipated utility rate case filings. Should events unfold along these lines, solar developers and customers stand ready to benefit from a more fair, clear, and consistent renewable energy market.

Join RENEW’s campaign to advance renewable distributed generation in Wisconsin

Since 1991, RENEW has been the state’s preeminent advocate for renewable energy. At the macro scale, solar and wind can outcompete fossil fuels on cost and environmental performance. For the first time in more than a decade, we have an opportunity in Wisconsin to broaden the clean energy transition underway to benefit all customers who place a value in a healthy energy economy. A clear, fair and forward-looking regulatory environment will be crucial to spreading renewable energy across all sectors of society. RENEW is bringing together the leadership and expertise necessary to undo the regulatory barriers that have held renewable DG back, and to replace them with policies to make renewable DG more accessible, affordable, and plentiful across Wisconsin. We hope you will join us in this work by donating today. 2021 promises to be an exciting year!

[1] RENEW evaluated eight states closest to Wisconsin in terms of cumulative Net Energy Metering (NEM) capacity at the end of 2015, i.e., the four states immediately above and below Wisconsin in EIA data listing NEM capacity by state.   The eight states closest to WI in NEM capacity in 2015 included NH, RI, ME, NC, VA, IL, MN, and MI. The 2020 data is based on NEM capacity through April 2020. The percentage of total customers uses 2018 total state customer counts for both calculations. Note that Wisconsin has fallen behind states it had previously led.  See bar graph for more information.

[2] In the most recent comments filed by Clean Energy Advocates, we looked at this year’s PSC calendar to assess how our recommended actions can make their way into regulatory policy. The DG docket now underway is well-timed in that we expect every Class A investor-owned utility in Wisconsin to file for new rates in 2021.

Regulators Approve Permit for Wood County Solar Farm

Regulators Approve Permit for Wood County Solar Farm

At its first open meeting of 2021, the Public Service Commission (PSC) cleared the path for Wisconsin’s next solar farm, a 150 megawatt (MW) project near Wisconsin Rapids in Wood County, to proceed to construction. Developed by Savion Energy, the Wood County Solar Farm is one of six Wisconsin solar farms totaling 675 MW that Alliant Energy-Wisconsin Power and Light seeks to acquire for its own generating fleet.

Wood County is the sixth solar farm proposal to be granted a siting permit from the PSC since April 2019, when the agency approved Wisconsin’s first two solar farms, Two Creeks and Badger Hollow. With the authorization of the Wood County project, total solar power capacity approved by the PSC climbed above one gigawatt (see Table 1).

With this favorable ruling, four of the six solar farms that Alliant Energy plans to acquire now have permits. In addition to Wood County, the other permitted solar farms are Crawfish River, a 75 MW project near Jefferson, North Rock, a 50 MW project near Edgerton, and Richland County Solar, a 50 MW project near Lone Rock, also developed by Savion Energy (see Table 2).

Two other proposed solar farms—the 200 MW Grant County project near Potosi and the 150 MW Onion River project near Oostburg in Sheboygan County–are moving through the regulatory review process. The PSC is expected to issue rulings on those two projects, along with Alliant’s application to own and operate all six solar farms, over the next three months.

Presently, the site is mostly a red pine plantation grown for the pulp and paper industry. Following PSCW approval of Wood County Solar Project, the work to harvest the site’s existing stand of trees will begin. Coordination has already commenced between the Project, Alliant Energy, The Town of Saratoga, and Wood County to ensure an orderly harvesting campaign.

Though the parcel has been a working tree farm since 1938, development pressure has been intensifying in recent years.  In 2012, the Wysocki Family of Companies applied for permits to establish a 3,500-cow dairy operation on that property, and over time the proposal grew to approximately 5,300 cows.  The residents of the Town of Saratoga fought the dairy proposal vehemently, in part to protect drinking water wells that supply many of the local families.  The solar farm has received wide support in the community.

The construction timetable calls for the completion of the solar farm in the fourth quarter of 2022.

Table 1: PSC-approved solar power projects since 2019
Project name Capacity

(in MW)

Applicant County
Two Creeks 150 NextEra Energy Manitowoc
Badger Hollow 300 Invenergy Iowa
Point Beach Solar 100 NextEra Energy Manitowoc
Badger State Solar 149 Ranger Power Jefferson
Paris Solar 200 Invenergy Kenosha
Wood County 150 Savion Wood
Total 1,049

 

Table 2: Solar power projects proposed for Alliant-WPL’s generation portfolio
(Docket No. 6680-CE-182)
Project name Capacity

(in MW)

Applicant Siting permit status
Wood County 150 Savion Approved
Grant County 200 NextEra Energy Docket underway
Onion River 150 Ranger Power Docket underway
Crawfish River 75 Ranger Power Approved
North Rock 50 National Grid Approved
Richland County 50 Savion Approved
Total 675

 

First PSC-approved solar farm up and running

First PSC-approved solar farm up and running

The Two Creeks Solar Park, located in Manitowoc County, was energized last week, becoming the state’s largest generating station powered by the sun. Developed by Florida-based NextEra Energy, Two Creeks is jointly owned by two Wisconsin electric utilities: Wisconsin Public Service Corporation (WPS) and Madison Gas and Electric (MGE). WPS owns and operates a 100 megawatt (MW) share of the 150 MW power plant, while MGE has the remaining 50 MW share.

Located next to the Point Beach Nuclear Plant, Two Creeks effectively doubles the amount of solar generating capacity in Wisconsin to 300 MW, and will, over the next six months, produce more electricity than the combined output from all other existing solar systems in Wisconsin. Expected to produce more than 300,000,000 megawatt-hours a year, Two Creeks will generate about one-half of one percent of the state’s overall supply of electricity, which is the equivalent of what 33,000 residences consume annually.

Along with the 300 MW Badger Hollow Solar Farm in Iowa County, Two Creeks received approval from the Public Service Commission (PSC) in April 2019. These two were the pioneering solar farm proposals that navigated through the PSC’s power plant siting process and won approval from the agency. At the same meeting, the PSC granted a joint request from WPS and MGE to acquire Two Creeks.

Since then, the PSC has given the green light to two more solar farms totaling 249 MW in capacity, including NextEra Energy’s 100 MW Point Beach Solar Farm next door to Two Creeks. Point Beach Solar is under construction and should be completed in the fall of 2021.

Construction work on Two Creeks commenced on August 2019, kicked off with a groundbreaking ceremony that drew Gov. Tony Evers and the two utility ceos. Governor Evers’ appearance came less than a week after he issued Executive Order 38, articulating a goal of “ensuring all electricity consumed within the State of Wisconsin is 100% carbon-free by 2050.”

Building Two Creeks was no small undertaking. It involved punching thousands of posts into the ground to support horizontal tracking systems spreading across 800 acres of relatively flat terrain. Mounted on these rotating poles are more than 500,000 panels that follow the sun as it crosses the sky going east to west. Between the first rays of sunlight and the last ones before sunset, these panels soak in the sunshine and convert it to electricity.

A plant like Two Creeks will begin displacing higher-cost power at the moment it is energized, and these savings will grow significantly over the course of its 30-to-50-year life. True, the utilities will need to recover the cost of building the solar farm, somewhere in the vicinity of $195 million. But the savings utilities expect to reap from avoided fossil fuel purchases and pollution control expenditures will more than outweigh their investment in a zero-carbon generation source. Seen in this light, large-scale solar is indisputably the most cost-effective supply option that an electric utility can pursue going forward.

The benefits from Two Creeks extend beyond ratepayer savings. Manitowoc County and the Town of Two Creeks, the jurisdictions hosting the solar farm, expect to reap a combined $600,000 in local aids each year while the project remains in service. That number grows to $18,000,000 over the course of 30 years, which is the projected minimum lifespan of Two Creeks.

Solar is a noncombustible energy resource that does not emit any gaseous emissions or particulates when converted to electricity. Deploying solar at the scale of Two Creeks will capture significant public health and air quality benefits by avoiding emissions that are associated with conventional fossil generation plants. In another PSC proceeding involving a 15O MW solar farm in eastern Wisconsin, the developer anticipates annual emissions reductions in the following categories of pollutants: (1) nitrogen oxide (NOx) emissions by 195,000 pounds; (2) methane (CH4) by 20,000 pounds; (3) nitrous oxide (N2O) by 5,000 pounds; and (4) carbon dioxide (CO2) by 405 million pounds.

Decarbonizing the state’s fleet of power plants is also a job creation strategy. The PSC estimates that somewhere between 200 and 300 jobs were created during the project’s construction window. It’s quite likely that many of the workers involved in the building of Two Creeks are now hard at work constructing the adjoining Point Beach solar farm.

In the annals of Wisconsin electric utility history, Two Creeks represents a noteworthy milestone, as the first solar farm to clear the PSC’s power plant review process and become a valuable addition to the state’s portfolio of power plants. And it took only 18+ months from the crossing of the regulatory finish line for Two Creeks to start sending power into the grid.

Two Creeks can also be viewed as the lead entry in a parade of large solar farms seeking to cross the same regulatory finish line and proceed to construction and completion. Looking out over the next 12 months, the PSC will review and make decisions on six solar farm applications totaling 1,150 MW (see table below).

Project name Developer County Capacity

(in MW)

Anticipated  decision date
Paris Invenergy Kenosha 200 11/2020
Wood County Savion Wood 150 12/2020
Grant County NextEra Energy Grant 200 4/2021
Onion River Ranger Power Sheboygan 150 5/2021
Darien Invenergy Walworth/

Rock

250 7/2021
Apple River National Grid Polk 100 9/2021
Springfield National Grid Dodge 100 9/2021

 

Within that same 12-month window, we expect two more PSC-approved solar farms—Badger Hollow I (150 MW) and Point Beach (100 MW) to cross the finish line and begin generating electricity.

What we’re seeing here is the emergence of a new resource paradigm that is ushering in a major wave of public works construction across the state. As this transition unfolds, solar power will become widely recognized as a linchpin in the state’s economy, extending through this decade and beyond.

PSC Finalizes 2020 Grant Program

PSC Finalizes 2020 Grant Program

Update: The Request for Proposals (RFP) pursuant to the 2020 grant cycle of the Energy Innovation Grant Program has been posted on the Public Service Commission’s web site. You can access the RFP here. The due date for grant submissions is January 22, 2021.


October 19, 2020

The Public Service Commission approved $7 million in funding that will be awarded through the 2020 round of the Energy Innovation Grant Program (EIGP). The EIGP awards financial assistance that supports the Office of Energy Innovation’s mission relating to energy efficiency, renewable energy, transportation, planning and resilience. In the previous round in 2018, the EIGP distributed nearly $5 million to more than 100 recipients. EIGP presently has a cash balance of more than $26 million.

The final order (PSC REF# 398392) was issued on October 16th, setting forth elements including (1) eligibility criteria; (2) eligible activities; (3) program budget; (4) procedures for tracking and reporting; and (5) development of the Request for Proposals (RFP).

The most important decisions rendered by the Commission are itemized below, interspersed with tables providing greater granularity on the program design and schedule.

Key decisions

  • The following entities are eligible to seek funds through this program: manufacturers of all sizes; and cities, villages, towns, counties, K-12 school districts, tribes, municipal water and wastewater utilities, municipal electric utilities, municipal natural gas utilities, University of Wisconsin System campuses and facilities, Wisconsin Technical College System, public or nonprofit hospitals, and 501(3)(c) nonprofits (collectively MUSH Market).
  • A budget of $7 million was authorized for the upcoming round. This represents an increase of $2 million from the previous round. The allocations for each of the four program activities are listed below.
  • Projects involving all statutorily defined renewable energy resources are eligible for funding.
  • The additional $2 million were allocated to Activities 1 and 2.

 

Optional Available Funds Per Activity for 2020 Program Year
Activity Maximum grant request Available funds per activity
1. Renewable Energy + Energy Storage 22% up to $250,000

(solar PV only)

$2.5 million
$500,000 (other RE)
$250,000 (energy storage system)
$500,000 (solar + storage)
$750,000 (other RE + storage)
2. Energy Efficiency + Demand Response $1 million $3 million
3. Electric + RNG Vehicles + Infrastructure $100,000 $1 million
4. Comprehensive Energy Planning $100,000 $500,000
Total $7 million

 

The Commission also approved a timeline for the upcoming round of funding, the milestones of which appear in the table below.

 

Tentative 2020 Energy Innovation Grant Program Year Timeline
Date Activity
9/2020 PSC consideration of 2020 Grant Program Design – final order issued
10/2020 Final order issued; Circulate RFP 90-day application period
1/2021 Applications due
2/2021 Review and score proposals
Spring 2021 2020 EIGP Award recommendations considered; announce awards
Spring 2021 Contract negotiations; sign award agreements