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State Lawmakers Debate Compensation Rates For Excess Solar Energy

A bill that would change the way home owners are paid for solar energy is moving through the Statehouse.

Photo: James Gray

A bill that would change the way home owners are paid for solar energy is moving through the Statehouse.

Between 2012 and 2015, Madi Hirschland worked with congregations around the state and from many different denominations to install solar panels and reduce their energy use.

“You look out, you see the sun, and you know and you know it’s powering your lights and your refrigerator.” Hirschland says. “It’s coming right from your roof into your building.

The roof of Congregation Beth Shalom in Bloomington is lined with solar panels.

BethShalom2

They cost the congregation just more than $50,000 in 2013. It’s an expense the congregation is still working to recoup, but they’re getting help from a process called net-metering.

“Net metering is a policy that allows people who install solar panels, on let’s say, their rooftops, to essentially get reimbursed when they produce more electricity than they consume,” says Professor David Konisky. Konisky studies how energy policy is encouraged or discouraged.  “Typically, in most cases, summer, people are generating more power than they use in their house. So in essence, they get a credit.”

They can redeem that credit for energy when they can’t derive all of their energy from the sun.

At the statehouse, a bill passed through the senate that means changes for how that energy is repaid.

“We’re trying to adapt Indiana’s energy policy to reflect the changing mix of generation sources, and its impact on consumer rates,” says bill-author Republican Sen. Brandt Hershman (R- District 7).

Hershman says it’s good for the environment that people are using more renewable energy and less coal, but he says the current model is not sustainable.

“Currently, the people producing that electricity get paid full retail for the energy they produce. That’s about 3 times more than wholesale rates. As more people participate in this, it can have a negative impact on consumers’ energy bills.”

The bill includes an amendment that lessens the reimbursement rate. Instead of retail, over a series of years, people would begin receiving the lesser rate of wholesale multiplied by 1.25.

“I think it’s a fine thing to promote the use of solar energy, I just think that the subsidy is too high.”

—Sen. Brandt Hershman (R)

“I think it’s actually very fair, and it’s a response to the concerns raised to the introduced bill,” Hershman says.

 

According to National Conference of State Legislatures, net metering has shown annual growth over 50 percent for four consecutive years. Solar panels are falling in price, making them more affordable to purchase. And the technology has improved, making them a more competitive power source.

“But I think it’s a fine thing to promote the use of solar energy, I just think that that subsidy is too high,” Hershman says.

Professor David Konisky thinks the system is sustainable. “It is the system that many states have in operations. Indiana’s not unique. There are about 40 states that have some system in place that allows for net metering. In most cases, it is based on the retail rate of electricity.”

And Konisky says that more solar panels can lead to more jobs. “There are about 2,700 solar jobs in the state currently,” he says. “And there’s an incredible amount of opportunity for new growth, but in order to have new job creation in solar, you have to have the policies in place to create the incentives for the installation in particular.”

Meter

Congregation Beth Shalom would be grandfathered into the retail rates since their solar panels are already in place. The congregation doesn’t sell a lot of energy back to the utility company, but it’s significant enough that they plan their year with the benefits in mind.

“Everyone knows that solar and renewables are the future,” Madi Hirschland says. “Just like kerosene was the past and electricity came in. Horse and buggy went out and cars came in. Renewables are the future.”

At the federal level, a tax credit for solar panels was recently extended through 2019. After that, it will be phased out.

Want to contact your legislators about an issue that matters to you? Find out how to contact your senators and member of Congress here.

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