Studying Time: 6 minutes

Wisconsin photo voltaic advocates are applauding a latest determination by state regulators and hoping it’s a signal the business might lastly get readability on the legality of third-party-owned photo voltaic within the state. 

In the meantime, a invoice has been launched to permit third-party-owned group photo voltaic, and advocates say that photo voltaic builders are already negotiating offers with farmers to launch such initiatives.

The problem is a murky one in Wisconsin, the place utilities have resisted efforts by photo voltaic corporations to construct and function arrays on behalf of nonprofit entities that may’t reap the benefits of tax credit, or prospects who don’t have the upfront capital to buy an array on their very own. Statutes have been unclear on what’s and isn’t allowed.

On March 16, the Public Service Fee denied utility WEC Vitality’s request to increase its Photo voltaic Now program, whereby the utility leases roof area to put in photo voltaic panels it owns. Photo voltaic proponents have criticized this system since its launch as a pilot in 2018, saying it offers utilities an unfair benefit within the rooftop photo voltaic market and likewise offers them an incentive to relax personal photo voltaic improvement, together with third-party-owned arrays. 

In pushing for Photo voltaic Now, utilities is perhaps “attempting to nook that a part of the enterprise earlier than [third-party-owned solar] opens up,” stated Residents Utility Board Govt Director Tom Content material. 

The Inflation Discount Act reduces the necessity for metropolis companies and church buildings to make use of third-party possession to faucet tax credit, because it permits for such credit to be paid out straight as money. However third-party possession is nonetheless an necessary possibility for patrons that may’t afford the upfront prices of photo voltaic. 

The Photo voltaic Now determination was among the many first below new management on the three-person Public Service Fee, which now consists solely of appointees of Democratic Gov. Tony Evers. Former fee Chair Ellen Nowak, who was appointed by former Republican Gov. Scott Walker, retired on March 1. 

Critics had lengthy complained that the fee was too fast to grant the needs of utilities, particularly highly effective WEC, the mum or dad firm of We Energies and Wisconsin Public Service Corp. WEC had sought to increase its current Photo voltaic Now program — dubbed “rent-a-roof” by critics — in We Energies territory within the Milwaukee space, whereas additionally launching a brand new such program in Wisconsin Public Service’s northeastern Wisconsin territory. 

New fee Chair Rebecca Valcq and commissioner Tyler Huebner — former govt director of unpolluted vitality group Renew Wisconsin — turned down WEC’s request, agreeing with advocates’ arguments that it could give the utility an unfair market edge and likewise drive all ratepayers to choose up the tab for comparatively small photo voltaic installations that might be much less cost-effective than bigger utility-scale photo voltaic.

“Particularly with the proliferation of packages coming from the federal authorities below the [Inflation Reduction Act] and below the Bipartisan Infrastructure Regulation, I get involved when utilities use their monopoly place to realize a bonus in what needs to be the personal market,” Valcq stated in the course of the fee’s listening to.

Historical past of controversy

Valcq was a commissioner in 2018 when the Photo voltaic Now pilot was initially proposed, and dissented when the opposite two then-commissioners authorized this system. 

Just lately appointed commissioner Summer season Strand supported the utility request to increase Photo voltaic Now, arguing there may be demand for this system. Huebner stated he would take into account supporting a restricted type of Photo voltaic Now to offer arrays the place no personal developer desires to work. 

“These initiatives are positioned in places that typically is not going to be used for anything, together with brownfields,” WEC spokesperson Brendan Conway instructed the Vitality Information Community. “We’re stunned our standard Photo voltaic Now program isn’t being allowed by the fee to develop. Now we have robust curiosity from prospects throughout the state — together with governments, colleges, group teams and enormous corporations — trying to be a part of this system and increase their entry to renewable vitality and meet their clear vitality objectives.”

The town of Milwaukee has been locked in a authorized stand-off with We Energies over the utility’s refusal to interconnect a third-party-owned array. In the meantime, Milwaukee has a 2.25-megawatt Photo voltaic Now set up on its landfill and filed testimony in favor of Photo voltaic Now. 

However the metropolis legal professional lamented in testimony that lease funds from the utility have been lowered because the metropolis selected to make use of the solar energy to satisfy its personal clear vitality objectives — reasonably than permitting the utility to faucet the array’s renewable vitality credit. 

The town complained that the utility didn’t present proof that the credit related to the landfill array had been retired, which might be needed to make sure the solar energy was not being double-counted for clear vitality targets. 

Third-party potential

We Energies had pushed its Photo voltaic Now program significantly as a substitute for requests from the town of Milwaukee and different entities for third-party-owned photo voltaic, whereby a personal developer installs and owns a photo voltaic array, reaps the tax credit, and passes the financial savings alongside to municipal companies, companies or residents.

Photo voltaic advocates and prospects have lengthy been asking the Public Service Fee and state lawmakers to substantiate that such third-party-owned installations are authorized in Wisconsin. We Energies has argued they violate the utility’s unique proper to offer energy as a regulated monopoly.

The Midwest Renewable Vitality Affiliation has a petition pending earlier than the fee demanding affirmation that third-party photo voltaic is authorized. Final 12 months, the fee dominated in favor of a request by advocacy group Vote Photo voltaic to permit one household to put in third-party-owned photo voltaic. Advocates noticed that ruling as encouraging however very restricted in scope, making use of simply to that case. 

Midwest Renewable Vitality Affiliation Govt Director Nick Hylla stated the fee’s determination on Photo voltaic Now signifies its assist for the idea of a personal distributed photo voltaic market, and such a market wants third-party possession in an effort to thrive. 

“It’s clear from the chair’s feedback that she was involved in regards to the utility increasing their monopoly affect right into a traditionally aggressive market,” Hylla stated. “The fee is conserving the utilities targeted on what they’re constructed to do: construct large-scale property. And, to maintain the [distributed energy resource] market serving buildings open and aggressive.”

Photo voltaic Now drawbacks 

The Photo voltaic Now proposals failed partially due to an argument much like what utilities have deployed to dam the proliferation of privately owned distributed photo voltaic. 

Utilities have lengthy maintained that prospects with photo voltaic are forcing prospects with out photo voltaic to pay an even bigger portion of prices to keep up the grid, since these with photo voltaic are paying much less into the system. These arguments have been extensively challenged by consultants who level out that photo voltaic makes the grid extra environment friendly and resilient for everybody. 

In the meantime, critics of Photo voltaic Now argued that it forces all ratepayers to subsidize photo voltaic installations, even when they don’t profit from the vitality or lease funds. As with most investments, the utility can cost ratepayers to recoup the prices for Photo voltaic Now arrays, plus a revenue. 

“No discuss of cross subsidization or fairness from the utility right here,” photo voltaic designer Michael Barnett wrote in his testimony. “The quantity of utility hypocrisy on this language is laughable. The message is utilities don’t thoughts cross subsidization if they’ll profit from it.” 

In testimony earlier than the fee, the utility stated Photo voltaic Now installations could be 1% to three% dearer than “equal” utility-scale initiatives. Barnett filed testimony with calculations exhibiting it could possibly be 9 to fifteen instances dearer.

The comparability to utility-scale isn’t a priority for third-party-owned photo voltaic — group or rooftop — since ratepayers throughout the territory should not compelled to choose up the tab. Fairly, personal builders typically take in any monetary threat, landowners or property homeowners gather lease funds, and any financial savings stream to group photo voltaic subscribers or entities with third-party-owned arrays. 

Group photo voltaic

Whereas third-party possession has been thought of an necessary profit for distributed photo voltaic arrays owned by residents or companies, it’s a necessity for group photo voltaic, apart from group photo voltaic owned straight by a utility. Payments launched final month (LRB-0767/LRB-2499) would affirm that third-party-owned group photo voltaic is authorized.

In such conditions, photo voltaic builders signal offers with landowners — usually farmers — to develop photo voltaic arrays on their land, and the builders solicit subscribers who get the clear vitality.

An identical invoice was launched in 2021. Matt Hargarten, vice chairman of campaigns for the nationwide Coalition for Group Photo voltaic Entry, stated that it usually takes such sophisticated payments a number of classes to realize traction, and backers are hopeful it can move this session. The brand new invoice, just like the 2021 one, is spearheaded by Republican legislators.

The highly effective state farm bureau has endorsed the invoice, noting in an announcement that group photo voltaic will be extra profitable and fewer disruptive for farmers than bigger utility-scale arrays.

“We’ve bought a good greater coalition than we’ve had earlier than,” Hargarten stated. “The farm bureau is now in full-throated assist of group photo voltaic. They see it as an possibility for his or her farmers to place some sort of photo voltaic on their land, however to maintain land in manufacturing, and preserve household farms within the state of Wisconsin.” 

Associations of builders and grocers are additionally backing the invoice. Hargarten famous that giant grocery or large field shops may host group photo voltaic installations on their rooftops.

Hargarten stated that photo voltaic builders are already coming into preliminary agreements — together with funds — with farmers to lease their land, ought to the invoice move. If the invoice turns into regulation, the Public Service Fee would set billing charges and different insurance policies associated to group photo voltaic in Wisconsin.

Utilities can and generally do develop group photo voltaic, and in testimony within the Photo voltaic Now case, Renew Wisconsin referred to as on the utility to contemplate this.

“Group photo voltaic is a program various that could possibly be made out there to a bigger group of consumers, together with renters and different residential prospects, companies with restricted land or rooftop area, and low-income prospects,” Renew’s testimony stated.

However advocates typically choose privately developed group photo voltaic.

“The place group photo voltaic has grown it’s via laws that allows third-party” possession, Hargarten stated. “Third-party permits for innovation [and] it brings in outdoors cash that’s not essentially on the backs of ratepayers; you’re going to be extra shortly growing photo voltaic.”