Skip to main content

The Journal Gazette

  • pixabay.com

Wednesday, November 08, 2017 1:00 am

Editorial

Power surge

Solar installations strong ahead of new rules

As the end of the year nears, business is booming in Indiana's solar power industry. It has nothing to do with the holiday season.

At Renewable Energy LLC, in Avilla, home and commercial installations are up 50 percent.

“Everybody's seeing an increase in their business this year,” said Eric Hesher, president and owner.

This should be good news. The move to solar and other clean-energy, renewable alternatives to coal-produced electricity is growing new industries and jobs across America even as it helps preserve the environment.

The rush to solar in Indiana, though, is almost certainly a short-lived phenomenon. As the Indianapolis Star reported last weekend, solar companies are already worried about what will happen after Jan. 1, when a law aimed at discouraging private solar power production begins to take effect.

Senate Bill 309 waters down the state's net-metering system, which allows customers who produce electricity through solar power to be credited for the unused power they produce. Those who have a solar system installed and operating by Dec. 31 will be grandfathered for the next 30 years under present rules, which require utilities to offer credit for solar-produced power at their retail electric rates.

Beginning Jan. 1, new solar users will  be grandfathered in for 15 years, and the length of grandfathering time for new customers will continue to drop for the next five years. After that, new customers will receive credit at a drastically reduced rate.

It's difficult to gauge how much the phaseout of net-metering credit will affect potential solar users as they balance the cost of installation against the potential savings a solar system might produce for them. Legislators who pushed SB 309 through over strong objections from environmentalists and consumers predicted its effect would be minimal. The Star reports, though, that some companies are anticipating a big drop-off in orders after Jan. 1.

Noble County-based Renewable Energy, which serves customers within a 100-mile radius in Indiana, Ohio and Michigan, has been growing for years. “For the next three to four years,” Hesher said in an interview Tuesday, “the outlook is pretty bright.” But he acknowledged things will change after a 30 percent federal tax credit for installation costs expires in 2020 and the rate of credit for unused electricity continues to drop.

“Short-term gain, long-term loss is how we're looking at it,” Hesher said.

The economics of electricity generation are complex. During the debate over SB 309, utility companies argued net metering forced other electric customers to “subsidize” solar users. Solar advocates made a strong counter-case. But rather than punt the matter to the experts at the Indiana Utility Regulatory Commission, the legislature pushed ahead.

Even SB 309, though, may not be enough to stifle solar power. Eventually, Hesher said, “New technology and mass production will prevail in the solar industry and make it a part of everyone's life.”