In Wisconsin, conservatives make the case for third-party community solar

by Kari Lydersen, Energy News Network

A conservative-led alliance of farming, construction, and clean energy groups is pushing new legislation in Wisconsin meant to create competition and accelerate the development of subscriber-backed community solar projects.

Backers of the bill (LRB 1902) say it would facilitate a significant increase in the state’s renewable generation, help customers access clean energy and save money on bills, create solar construction jobs, and provide a revenue stream for struggling farmers.

The bill is opposed by utilities, who argue that it violates the state’s regulated energy market and would force customers who aren’t solar subscribers to pick up more costs for electric grid upkeep. 

State Sen. Duey Stroebel and Rep. Timothy Ramthun, both Republicans, announced the bill on July 13, though it has not yet been formally introduced. The Wisconsin Conservative Energy Forum is a leading proponent. Such conservative support is considered essential to passing bills in Wisconsin, where the legislature is Republican-dominated and powerful business interests tend to be conservative. 

“The development of a competitive market — that’s a strong argument and should be a persuasive argument for conservatives who emphasize the role of competition, of private development in achieving lower cost and better outcomes,” said Wisconsin Conservative Energy Forum Executive Director Scott Coenen. “That shouldn’t be any different in solar, particularly community solar.”

Other supporters include the Land & Liberty Coalition — which includes farmers — and the growers cooperative Organic Valley, along with the Associated Builders and Contractors of Wisconsin, Advocate Aurora Health, Renew Wisconsin, and the Wisconsin Grocers Association.

‘A bipartisan issue’

Under the bill, privately owned non-utility community solar facilities of up to 5 megawatts could be built through June 2031. The same owner could not build multiple facilities within a mile of each other. No one entity could buy up more than 40% of a project’s subscriptions, and at least 60% of the project’s subscriptions would need to be in amounts of 40 kilowatts or less. 

Twenty-two states, according to the Coalition for Community Solar Access, have passed similar enabling legislation that allows private developers to build community solar — often on land leased from farmers — and recruit subscribers who get a credit for the solar power on their utility bill. Regulators such as Wisconsin’s Public Service Commission decide the terms of the arrangement, including how much customers are credited for the community solar installation’s power.

Matt Hargarten, campaigns director for the Coalition for Community Solar Access, said “the time is exactly right for community solar in Wisconsin.” He noted that states with robust community solar scenes are concentrated largely in the Northeast and West Coast, but Midwestern states are increasingly embracing the concept. Minnesota and Illinois have successful community solar programs, and legislation is also being considered in Michigan and Pennsylvania. 

“We think this is a bipartisan issue, there’s something in it for everybody,” Hargarten said. “On the [political] right you have customer choice, competition, economic development. Other factors have motivated left-leaning states to adopt it sooner — climate change, energy equity. But now we’re seeing a second wave of right-leaning states adopting it. The inevitability of changing the grid is upon us. Republicans have to ask what the new grid looks like, in a way that aligns with conservative values.” 

Legality and equity

In a state like Wisconsin with a regulated energy market, the ability to generate power is typically reserved for utilities and electric cooperatives. Utilities have argued that the bill violates regulatory provisions for this reason. 

“We Energies, WPS and other Wisconsin utilities have invested billions and billions of dollars in order to avoid the results of extreme weather events such as those that recently took place in Texas,” said Brendan Conway, spokesperson for We Energies parent company WEC. “That investment, electric reliability and predictable pricing will be threatened by a change in law that allows third parties to directly serve electric utility customers. The proposed legislation would undermine the regulatory system that has served Wisconsin and its electricity customers well for over 100 years.”

Opponents of the bill also include the Wisconsin Electric Cooperative Association, Municipal Electric Utilities, and other business and labor organizations. 

Coenen said that passing the bill is “fraught with challenges in a vertically integrated market like ours in Wisconsin, in a highly monopolized, highly regulated market,” but given that the Public Service Commission would set the terms, he and other backers say the program is in keeping with a regulated environment. 

“We think of it as fitting nicely into a regulated framework,” said Heather Allen, executive director of Renew Wisconsin. “Minnesota has one of the most successful community solar programs, and that’s a regulated state.” 

In a May memo sent to legislators, the Wisconsin Utilities Association argued against the proposal, saying that customers already have access to solar including through programs where utility-owned solar is built on customers’ property (often called “rent-a-roof”) and provisions for customers to choose clean energy on their bill. Often programs where customers buy clean energy involve an additional charge. For example, We Energies’ “Energy for Tomorrow” program charges an average customer about $13 a month extra to get all their energy from renewable sources, and $6 to get half their energy from renewables. 

“Programs such as WEC’s Solar Now and Nature Wise, Alliant’s Second Nature, MG&E’s Shared Solar and Xcel’s Renewable Connect programs are a success and should be expanded, not undermined by the third-party ownership’s or unregulated Community Solar’s false promises,” said the memo. 

Utilities have invoked an argument they’ve also used to oppose the proliferation of residential rooftop solar: that it shifts the costs of grid maintenance to customers who aren’t receiving solar energy. 

“Attempts to erode our regulated system are under consideration by some who are not bound by the regulatory compact and have no obligation to serve customers or control their rates,” said the utilities association memo. “They can cherry pick those with the highest incomes and exploit the use of the grid our utilities are required to maintain, at the expense of everyone else who pays their bills.”

Such arguments have been widely debunked, since distributed solar actually provides benefits to the grid that can lower everyone’s costs. Meanwhile community solar is actually a way that people with lower incomes — including those who don’t own homes or can’t afford the capital investment in rooftop solar — can participate in the solar economy.

Allen said that while some utilities have offered community solar to their customers, others including We Energies in the Milwaukee area have no community solar installations. 

“It’s very likely if this legislation is passed, community solar would accelerate much more rapidly in Wisconsin,” she said. “The [community solar] projects utilities have created have been popular, but there are utilities that have not offered any community solar to their customers. That leaves Wisconsinites without the opportunity to subscribe to community solar. We want everyone to have access, and we want a statewide framework for that, not the patchwork we have now.” 

She added, “We have a lot of agricultural communities and farmers looking for opportunities that are not at risk with fluctuating commodity markets and extreme weather events. This offers opportunity for the lease of land, for a drought resistant ‘cash crop’ that allows them to keep the family farm in the family.”

The Wisconsin Manufacturers & Commerce organization sent a memo to lawmakers voicing opposition to the bill, noting the purported cost-shifting argument that utilities have invoked. And the labor unions representing operating engineers, electrical workers and carpenters have opposed it, fearing that the community solar installations would take the place of larger utility-scale installations that would be built with union labor.

Tom Content, executive director of the Citizens Utility Board of Wisconsin, described community solar-enabling legislation as an important way to help more people access solar.

“It’s not an either-or proposition when it comes to solar. It shouldn’t be only one kind of solar that gets built,” he said. “There is value no matter who builds it. It helps meet power demand on hot days whether it’s a utility-scale or community solar project. The two worlds don’t have to be in collision, they can coexist.”

Unused subscriptions? 

The bill specifies that state subsidies could not be offered for community solar projects or their subscribers, a difference from neighboring Illinois where the 2017 Future Energy Jobs Act created renewable energy credits for community solar that resulted in a boom for such projects. The subsidies ran out more quickly than expected, and proposed legislation in Illinois would renew the program. 

Coenen said business leaders’ research has shown there is ample interest among private developers in building community solar, despite the lack of renewable energy credits. 

He and Adams said the bill as currently written does not address what would happen if a project is not fully subscribed, and the Public Service Commission would determine this issue once a law is passed.

“In every single community solar market today, unsubscribed energy is compensated at the lower wholesale rate — the price to produce electrons — giving ratepayers a deal and disincentivizing developers from having unsubscribed energy,” Coenen said. “This is why virtually all community solar facilities around the country are fully subscribed.”  

Conway framed the situation differently, saying: “If the developer does not attract enough subscribers they have no worries — all of the remaining costs will be paid for by our non-participating customers.” He pointed to a section of the bill (paragraph F) that refers to higher retail rates being paid by the utility for “accumulated” credits; it is unclear from the text if this refers to unsubscribed solar generation. 

Hargarten said that while some states have ultimately put provisions on their community solar programs meaning that little or no community solar is actually built, in more states community solar has flourished despite initial utility opposition.

“Generally utilities like their business models — they are very comfortable with the status quo,” he said. “They will generally unilaterally oppose anything that forces them to do something different. In almost any state utilities will oppose this legislation until it’s obvious it’s going to pass, and then they come to the table and help negotiate. Once programs pass, utilities are really important stakeholders — it is a partnership.”

This article first appeared on Energy News Network and is republished here under a Creative Commons license.

Source: Renewable Energy