Doug Stingle, the MREA Development Director, wrote this great article on why Wisconsin needs options for third-party ownership – it’s clear we need Clean Energy Choice legislation to boost renewable markets. (See the original posting on SeeingRED here).
The US solar electric (PV) market is booming. In fact, according to the Solar Electric Industries Association (SEIA), the residential solar electric market grew 12% over the 2nd quarter of 2012 and had its largest quarter in history. Wow, that is some impressive growth that many industries would be boasting about for quite some time. Of course, the solar industry is proud of the market growth and does some bragging about their success.
However, living in Wisconsin, you would never hear about the growth of the solar market, because the solar market in Wisconsin is stagnant.
So where are all these solar panels getting installed? According to SEIA in the 3rd quarter of 2012 (the most recent period statistics are available), Wisconsin ranked 26th in installation of solar electric capacity. Unsurprisingly, California ranked number one for installed capacity of solar in 2012, with Arizona a close second. California is a sunny state with a great solar resource, but that is not completely what is driving the installations there. The number one driver of home-sited solar systems is a third-party ownership model.
How does this work? First, you contact Company X and let them know you are interested in solar on your house. Next, Company X does an assessment on your home to see if the solar resource is adequate, and then the company looks over your electric bills to properly size a system. Company X can then come back and offer you the opportunity to install solar on your house, with no upfront costs, and save money on your monthly electric bills.
For example, let’s say you are paying $90 a month on your current utility bill. Company X can offer you the option of installing solar, and you pay Company X $80 a month as a result. Company X is the owner of the solar system, and you buy the energy produced from the solar array on your home. Company X is able to offer you the chance to reduce your electric bill and utilize solar, because the company is able to take a tax break on the installed system cost as well as sign a net-metering agreement with the local utility, allowing the company to sell any excess electricity generated by the solar system back to the utility.
Who wouldn’t want solar installed on their house and to pay less on their electric bills, all with no upfront cost? Almost everyone. So why aren’t thousands of Wisconsinites lining up to get solar on their roofs?
In Wisconsin we have just two options when it comes to electricity at our home:
- We connect to the local utility company.
- We generate and store our own power.
This gives the utility companies a virtual monopoly on power supply, as most people don’t have the resources to pay for all of the power up front. A third-party owned renewable energy generation system, as an option, is currently in legal limbo in Wisconsin.
The arrangement is neither legal nor illegal. The Public Service Commission in Wisconsin has advised that any power generating facility that is not owned by the same entity where it is located, is in fact, a utility and subject to utility regulations. This sort of legal gray area has a chilling effect on third-party owned solar systems, as companies aren’t keen on possibly facing legal action that would cut into their bottom line. Why take the chance on a possibly illegal installation in Wisconsin when this arrangement is perfectly legal in many other states?
In addition, this legal black hole is preventing schools and non-profits from partnering with a third-party who can take advantage of tax incentives that a non-profit cannot, to install solar at their location. Third-party owned renewable energy systems are great drivers of the market and are employing thousands of workers manufacturing solar components and installing systems.
The solar market is booming because of these third-party owned systems. How can we get more installed in Wisconsin and create homegrown energy and jobs?
We need clean energy choice legislation that allows third parties to own energy generation sited at customer locations and to not be regulated as a utility. Clean Energy Choice is a matter of fairness. We need to create competition in the energy market. Free market supporters can easily see this as a case of government being in the way of the free market.
Write, call or email your state representative and Governor Walker and tell them to make Wisconsin open for (renewable energy) business and to support giving Wisconsin residents a clean energy choice. Also visit www.renewwisconsin.org
and sign on to the letter of support for clean energy choice.
(See the original posting of this article on SeeingRED here).