Maine, with about 29 times the land mass of Rhode Island, had only 1.4 times the Ocean State’s power generated from small-scale solar energy installations last year.
The potential to boost solar power in Maine, and its recent rapid growth, illustrate why the fight over how to pay small solar generators won’t go away any time soon. At its heart, the debate is about fairness — to solar customers, other customers and utilities.
Small-scale solar power generation continues to grow year over year, up 37 percent nationwide in 2016. Maine’s generation grew at an even faster clip compared with 2015, according to estimates from the U.S. Energy Information Administration (the estimates cover systems with less than 1 megawatt of capacity).
Maine’s numbers grew faster in part because the state is starting with a much smaller batch of solar generation (the state’s 54 percent jump in 2016 solar generation made up less than 1 percent of the national increase).
New Hampshire generated about twice as much from small-scale solar last year. Vermont put out about three times as much. Nationally, of course, Maine’s solar power production registers as barely a blip.
Solar power advocates point to industry tallies and other figures that show Maine lagging in solar power generation and capacity, in a call for policies that will help encourage more renewables.
The state policy that will take effect starting next year will gradually dial down the primary incentive in Maine for small solar installations, called net metering, which gives customers credits on their bill for times when they generate more energy than they consume. That, they predict, will hamper solar growth.
For utilities, policymakers and the solar industry, in particular, the coming rise in small-scale generation poses bigger questions about the relationship between utilities and customers.
Utilities in Maine only manage the grid — the poles and wires that connect to homes and businesses. They don’t generate the electricity, but the fees they charge for using the grid are tied in part to how much a customer uses. Just like the idea of a toll road, the drivers who use more pay more.
That concept — and that analogy — totally breaks down when the money starts flowing the other way. Should drivers who tote along hot top to patch the roads as they go pay less in tolls? And how much less?
Under net metering, customers get credits equal to the value of the going rate for electricity and the unit price the utility charges for using its poles and wires.
In the debate over net metering, there’s are basic questions of fairness where the solar industry and utilities and Maine regulators have disagreed.
A study by state regulators into the value of solar found it had other valuable benefits to the grid, and the state has studied using local generation sources as a way to avoid making costlier transmission line and infrastructure upgrades, so there’s some acknowledgment of system-wide benefits to distributed generation projects.
Still, utilities have argued that with their fixed costs for maintaining their electric grid, there’s a cost shift when they deliver credits back to net metered customers. In other words, they lose transmission and distribution revenue that they say must be picked up by other customers. Regulators had concerns that’s not fair, which is why they decided to gradually scale back net metering starting next year.
But the solar industry questions the significance of that “cost shift” and whether it’s really unfair given solar’s other value to the grid.
The debate comes as state utilities are reporting steady increases in small solar power installations. And all of the estimates of solar capacity growth, total losses from net metering and net metered customer charts show the same story.
From 2012 to 2016, utilities estimate that amounts to about $5.8 million in lost revenue, most of that with Central Maine Power Co.
And most of that lost revenue to net metering is likely attributable to solar installations, which have made up most of that capacity, according to the same utility reports to regulators.
Continued increases would pose still greater challenges for utilities, for whom a changing relationship with customers poses at worst a threat and at best some interesting rate-setting questions.
But the recent trends show why the net metering debate isn’t likely to end, especially with still more capacity coming online this year, before the net metering incentives begin to dwindle.