2017 solar energy legislation will take effect in July

SOUTHERN INDIANA — New solar-powered residences and businesses will see a change in excess energy production compensation as a 2017 bill comes into effect this July.

The change comes as a part of Senate Enrolled Act 309, which became law in 2017 after being signed by Gov. Eric Holcomb.

The act states that after July 1, 2022 electricity suppliers that are not a municipally-owned utility or a rural electric membership corporation no longer have to make a net metering tariff available to customers.

Net metering refers to the compensation from utility companies that solar panel users receive for producing more energy than they consume.

Under the net metering tariff, residents were to receive a 1-to-1 rate of the retail power. Meaning they received a credit for the energy they produced at the same cost that the utility company purchases energy from their supplier.

SEA 309 was the state’s move toward excess distributed generation (EDG) instead of net metering.

EDG means that customers will be credited for excess energy at the average marginal price of electricity paid by the electricity supplier during the most recent calendar year (or the market/wholesale price) plus 25%, according to the law.

The law will affect the five Indiana investor-owned utilities, including Duke Energy, which serves much of Southern Indiana.

Duke Energy spokesperson McKenzie Barbknecht said that the legislature’s intent is to help ensure that solar-generating customers are not subsidizing the customers who are not using solar panels.

“Even though they generate some of their own power, solar customers still rely on electric infrastructure, such as power lines. The new rate reflects the costs of that,” Barbknecht said.

Since the solar power customers are still connected to Duke Energy’s electric grid, the new rate ensures that they are contributing to the upkeep and use costs associated with the infrastructure.

Barbknecht said that she is unsure how other utility companies will handle the new law, but Duke Energy is awaiting an order response from the Indiana Utility Regulatory Commission (IURC) before they can give a final word to customers seeking to install solar panels.

“For applications received after June 30, if the order’s approved prior to the customer’s solar installation the customers would fall under the new rate. If customers already have submitted an application to us by July 1, we plan to give them until the end of year to install their systems under the old rate,” she said.

Duke Energy’s website states that customers now enrolled in net metering will be credited at the initial full retail price for excess energy until July 1, 2032. Customers who were enrolled in net metering before 2018 will be credited at the full retail price until July 1, 2047.

The change will not have an impact on the credit customers get for the solar energy they produce and consume, only the the excess produced and sent back into the power grid.

The law does not affect Clark County REMC, a rural electric membership corporation.

Clark County REMC, a member-owned corporation, is focused on what the members want, according to the company’s marketing and member services manager, Brian Omerso.

For the same reasons that SEA 309 is looking to reduce the credit given for excess energy, Omerso said they do not offer a 1-to-1 credit: so members without solar panels are not penalized.

The company offers a credit of 4.5 cents per kilowatt-hour (kWh) of excess energy for its members. The rate increased from 3.5 cents per kWh earlier this year, Omerso said.

Clark County REMC’s board of directors wanted to ensure that they were offering the rate in the most fair and equitable way, Omerso said. This led to the group hiring an independent firm to complete a cost analysis.

“That report told us that we would actually be able to increase the amount that we’re giving back without putting additional burden on the rest of the memberships,” Omerso said.

Several Indiana environmental groups have shared their concern for this change, saying that it diminishes the right to energy freedom.

A news release from Citizens Action Coalition and Solar United Neighbors was released on June 28 condemning the legislature.

“Instead of empowering Hoosier homeowners and Indiana-grown small businesses with the ability to manage their energy destiny by harnessing homemade energy, Indiana is taking a huge step backward by allowing net metering to expire,” Indiana program director for Solar United Neighbors, Zach Schalk, said in the news release.

The news release said that net metering is a fair and simple way to credit solar panel owners for the excess energy they generate.

“Rooftop solar is a powerful tool to enhance the reliability and resiliency of the electric grid. It makes no sense to eliminate net metering as grid operators are warning of electric capacity shortfalls and the threat of rolling blackouts,” Schalk continued.

The EDG tariff will dramatically lower the rate of excess energy customers generate, the news release said.

President of Indiana Distributed Energy Alliance Laura Ann Arnold said that while they understand legislators want to change how solar customers are credited, the new law will discourage Indiana ratepayers that want to install solar panels to reduce electric bills.

She noted that customers being discouraged will decimate the growing rooftop solar industry in Indiana.

“Rooftop solar, along with other clean, distributed energy generation technologies and end-use energy efficiency, are critical solutions for lowering the cost of power, addressing the climate crisis, and keeping the lights on for all Hoosiers,” the news release stated.