Will ruling end decade of uncertainty for Wisconsin solar?

Wisconsin regulators lastly answered Thursday a query hanging over the state’s rooftop photo voltaic marketplace for a decade.

The Public Service Fee dominated 2-1 {that a} photo voltaic installer shouldn’t be thought of a public utility if it owns photo voltaic panels on a Stevens Level, Wis., residence and sells energy to the household of 4 that lives there.

However in taking a place in a long-running dispute between utilities and the photo voltaic trade, the PSC prompts a brand new query: Does the ruling apply narrowly to only one residence in central Wisconsin, or does it open the marketplace for third-party-owned photo voltaic throughout the state?

Whereas the problem could in the end be determined by the Wisconsin Legislature or — as in neighboring Iowa — by the courts, Thursday’s PSC ruling represents a photo voltaic trade win. Utilities argue that third-party financed rooftop photo voltaic techniques meet the definition of public utilities below state regulation and would infringe on their monopoly service areas.

“I feel this was a victory for frequent sense,” stated Will Kenworthy, Midwest regulatory director for Vote Photo voltaic, the nationwide advocacy group that introduced the petition.

Vote Photo voltaic stated the upfront value of rooftop photo voltaic techniques is a barrier to shoppers’ potential to unlock vitality financial savings. Third-party possession, the place the installer or one other celebration owns the photo voltaic tools and leases it or sells the vitality it produces to a home-owner or enterprise for month-to-month funds, is an choice in additional than two dozen states.

The enterprise mannequin is credited with serving to the trade take off in states like California. And the Photo voltaic Power Industries Affiliation says 83 p.c of residential photo voltaic techniques in New Jersey are owned by third events.

Kenworthy known as the notion {that a} rooftop photo voltaic system on a residential rooftop could be outlined as a public utility “preposterous.”

However so far as applicability of the Wisconsin fee’s ruling past one mission within the central a part of the state, that is still unclear. “I’m hesitant to declare the door is open for everybody in Wisconsin,” Kenworthy stated.

Invoice Skewes, head of the Wisconsin Utilities Affiliation, stated the ruling isn’t the result sought by the group, which urged the PSC to disclaim the petition.

Whereas the PSC’s ruling is restricted in scope to a single mission, “our concern is that it might open the door to a wider effort to erode the regulatory compact,” Skewes stated in an e mail. “It’s that wider effort that causes us concern for our clients who will lack the buyer protections afforded by the regulated system we’ve immediately.”

The affiliation and different opponents stated the problem on the coronary heart of the case is in the end one which must be determined by the Legislature. It’s a view shared by Commissioner Ellen Nowak, who solid the lone “no” vote.

Nowak argued the problem was neither ripe for choice nor was it one which must be determined by the PSC, which was overstepping its authority by setting coverage with the ruling.

“The fee ought to see this request for what it’s: a request to vary the regulation, change the regulation of utilities in Wisconsin that has existed for over 100 years and interact in improper rulemaking,” she stated throughout Thursday’s assembly.

‘Public coverage issues’

Thursday was not the primary time the PSC has dominated on a petition looking for a ruling to validate third-party owned photo voltaic.

In 2017, the Wisconsin Photo voltaic Power Industries Affiliation filed a petition for declaratory ruling on third-party photo voltaic. A yr later, California-based Sunrun, the biggest residential photo voltaic installer, sought an identical declaratory ruling from the PSC associated to photo voltaic tools leasing.

In each cases, the fee declined to open a case, saying the problem concerned broad “public coverage issues” higher addressed by the Legislature.

Nowak was chair of the fee for the 2017 case and a PSC member for the Sunrun choice. She famous throughout Thursday’s PSC assembly that laws has been filed to offer the photo voltaic trade the readability it seeks. However lawmakers haven’t handed a invoice and even performed a listening to on the proposed laws.

Nowak, appointed by former Republican Gov. Scott Walker, had urged earlier within the yr that the PSC’s majority, appointed by Democratic Gov. Tony Evers, was fast-tracking the third-party photo voltaic case within the occasion Evers misplaced his reelection bid.

Evers was reelected this yr, however a loss would have allowed his Republican challenger a chance to switch Commissioner Tyler Huebner, who has but to be confirmed by the Republican-controlled Wisconsin Senate.

No matter the place the dispute goes after Thursday’s ruling, there’s little argument that at stake is the long run development of the rooftop photo voltaic market in Wisconsin. That market, in response to the photo voltaic trade, has been constrained by ambiguity over whether or not third-party owned initiatives are allowed.

In response to information collected by the North Carolina Clear Power Know-how Middle at North Carolina State College, at the very least 29 states in addition to Washington, D.C., and Puerto Rico, permit third-party solar energy buy agreements, whereas a half-dozen different states disallow or prohibit such preparations. In others, together with Wisconsin, the legality of third-party possession stays unclear.

The case determined Thursday is certainly one of two that have been pending on the PSC. A call within the different case, introduced by the Midwest Renewable Power Affiliation, is predicted by the tip of the yr.

Brad Klein, a senior legal professional on the Environmental Regulation & Coverage Middle, which represented Vote Photo voltaic within the case, stated the PSC’s ruling is slender in its scope however nonetheless has broader significance.

“The fee’s choice immediately applies Wisconsin regulation to a particular mission. It doesn’t apply the regulation to every other mission,” Klein stated in an interview. “However the statute itself, after which the Wisconsin Supreme Court docket’s interpretation of that statute — these apply to everyone usually, and this helps make clear the which means of these legal guidelines and insurance policies.”

Utilities in Wisconsin have in some cases rejected interconnection requests for initiatives primarily based on the financing selection of shoppers, in response to Vote Photo voltaic, and now these utilities “are going to must assume arduous in regards to the justification for comparable techniques,” Klein stated.

The Environmental Regulation & Coverage Middle fought an identical battle over third-party photo voltaic in neighboring Iowa in 2014 on behalf of a photo voltaic installer. Finally, the Iowa Supreme Court docket issued an opinion affirming the rights of photo voltaic corporations to enter into third-party financing agreements with their clients.

Klein stated the arguments from Iowa utilities then — that third-party photo voltaic was a slippery slope towards deregulation and would upend a century of utility regulation — are the identical ones put ahead by Wisconsin utilities within the case determined Thursday.

“Not one of the dire predictions from the utilities have come to move,” he stated. “All that’s occurred is that cities and nonprofits and households have extra choices for financing initiatives.”