A bill before the Indiana General Assembly would change the laws regulating homeowners with small-scale wind turbines and solar arrays. It’s supported by the state’s electric utilities, but environmental groups and solar energy proponents are vehemently opposed; they say it will stifle the growing trend of homeowners investing in renewable energy.
The bill would change Indiana’s net metering laws, and also allow utilities to charge an additional fee to small-scale renewable energy generators. Right now, Hoosiers with rooftop solar arrays or wind turbines can connect to the grid and sell energy back to the utilities. The utilities buy that energy at the retail rate: the same rate at which they sell energy to customers. But if the bill passes, it will allow the utilities to buy that energy back at the lower wholesale rate.
The merit of this plan is a main point of contention between environmental groups and Indiana’s utilities.
“What we’re afraid will happen is the evisceration of customer-owned rooftop solar, small-scale wind turbines and other customer-owned generation,” said Kerwin Olson, the executive director of Citizens Action Coalition. His group advocates for citizens on energy and environmental issues. “The investor-owned utilities in Indiana are trying to get ahead of the game before the solar revolution even has an opportunity to take off here in Indiana.”
For Olson, changing the net metering laws means that there will be fewer financial incentives for homeowners to install renewable energy systems. Wind and solar both have an upfront cost, and for systems that end up selling electricity back to the grid, getting a lower rate per kilowatt hour means that it will take longer to pay off the system.
The bill’s proponents argue that it’s not fair for utilities to be forced to buy back energy at retail rates when they can get it much cheaper elsewhere.
“We would propose that utilities buy back that power at the same rate they can buy it from other places, said Dave Arland, a spokesman for the Indiana Energy Association, which represents the state’s 14 investor-owned utilities. “And that seems to us to be a fair way to do it, so the customers who don’t have the ability to generate their own electricity aren’t punished and forced to carry all of the costs of [maintaining] the grid.”
Arland said people with renewable energy systems still connect to the electric grid and rely on that electricity when their systems aren’t producing. So, he argued they should pay for some of that maintenance.
The bill would also allow homeowners to lease solar systems in Indiana—something that’s not currently allowed. Arland said this will make renewable energy more accessible for everyone; Olson called the provision a “red herring.”
“So if they’re going to change the rules of the game, make it more prohibitively expensive to get those systems, then those leases simply won’t be economical in the state of Indiana,” Olson said.
The Alliance for Solar Choice, which represents those companies that might be able to gain financially by leasing solar panels to Hoosiers, also opposes the bill. In a statement on its website, it called the measure “a bill to kill solar in the state.”
State Rep. Eric Koch, a Bedford Republican, is the bill’s sponsor. He declined an interview, but sent a statement:
“There is a tremendous amount of misinformation circulating about the bill. It doesn’t allow utilities to unilaterally set charges. Any fair share charge would be set by the Indiana Utility Regulatory Commission (IURC) after public proceedings. Anyone net metering now is grandfathered and anyone not using the grid is unaffected.
“This bill works to create a regulatory framework for the future and protects Hoosier ratepayers from the cost shift of the current structure. Simply put – this is about fairness and balance. Anyone who uses the power grid should pay their fair share of the cost, not allow it to be shifted to their neighbor.”
The bill is supported by Indiana’s electric utilities and electric co-ops. The electric utility industry also supported Koch heavily in the 2014 election, his most recent. According to the nonpartisan National Institute on Money in State Politics, electric utilities donated $11,000 to Koch’s campaign, making them his largest overall contributor. In all, the industry gave Koch nearly 30 percent of the total $37,661 he raised for his election.
And the electric industry’s donations to Koch’s campaigns are chump change when compared to some of his colleagues in the statehouse. Indiana State Senate President Pro Tempore David Long got $89,450 in 2012. In 2014, the electric utility industry donated more than $41,000 to House Speaker Brian Bosma’s campaign. Of all candidates running for Indiana state House or Senate, Koch received the ninth most money from the electric utility industry.
The bill would only affect small-scale energy producers and would grandfather in current customers with renewable energy systems. Olson estimates that in Indiana, there are about 530 customers interconnected to the grid. Most of those, he said, have come online in the last two years.
House Bill 1320 is currently assigned to the House Utilities, Energy and Telecommunications Committee.