Mar. 16—The costs and benefits of Maine's recent solar energy boom — and how to measure them — dominated testimony Tuesday in a legislative committee hearing that may result in a temporary moratorium on state solar energy incentives.
In Tuesday's hearing, members of the Legislature's Energy, Utilities and Technology Committee began to dig into conflicting data and viewpoints on the financial incentives enacted in 2019 to support the state's clean-energy and climate goals.
There was wide agreement among committee members that solar policies enacted two years ago have led to a wave of proposed projects, hundreds of millions of dollars in investment and a surge in jobs. But it also became clear that not all solar projects are created equal. Some — based on their size or location, for instance — are better deals for electric customers than others.
The five-hour online public hearing set the stage for upcoming work sessions that will seek to answer this question: How can Maine pick the right mix of solar projects to provide the greatest benefits for customers and businesses at the least cost?
Informing the answer will be two studies that have attempted to weigh the benefits of the financial incentive program that helps support investment. Net energy billing, or net metering, provides a credit for the power generated by small-scale renewable energy units, including rooftop solar panels.
One study, done last fall by the Maine Public Utilities Commission, identified a significant cost to ratepayers if the current policy remains unchanged and the hundreds of proposed solar projects became operational.
The second, done by Daymark Energy Advisors for community solar proponents and released Tuesday, found a range of benefits including jobs and investment already occurring, and predicted greater value with an expanding industry.
At upcoming work sessions, both the PUC and Daymark will walk the committee through the assumptions underpinning their differing conclusions.
There was wide agreement Tuesday that Maine should strive to make adjustments without pulling the rug out from under an evolving industry that's making sizable investments based on existing rules.
One developer, Robert Cleaves of Dirigo Solar, listed three projects worth a total of $27 million that his company is building in three of the committee members' rural districts. He implored the panel not to make "a Statoil mistake." That was a reference to how anti-renewables policy changes championed by former Gov. Paul LePage forced the Norwegian energy company formerly named Statoil to pull out of a pilot offshore wind project in 2013, and shut down a nascent industry.
Those concerns will all but assure the defeat of a proposed law that would eliminate Maine's net energy billing policy. Introduced by Sen. Trey Stewart, R-Aroostook County, it attracted no testimony in support — and plenty of opposition.
Two other bills, one that sought to cap the value of renewable energy contracts, and another that sought to broadly repeal solar policies, also seemed unlikely to make it out of committee.
Instead, lawmakers seemed likely to use a resolve offered by Rep. Seth Berry, D-Bowdoinham, as a vehicle to consider the future of net energy billing. It would pause the program temporarily while a stakeholder group convened to make recommendations. Berry's bill would set a moratorium ending June 30 for projects of between 2 and 5 megawatts in capacity that weren't already placed in the utility interconnection queue by Jan. 1 of this year.
But some who testified wondered if there's enough time between now and June 30 for a robust dialogue and study, and if those capacity limits are the right size.
Steve Weems, executive director of the Solar Energy Association of Maine, suggested the moratorium could be extended until Nov. 1, with recommendations presented for next year's legislative session.
But Patrick Jackson, senior vice president of project development at SunRaise Investments, said it's important to have a clear end date to provide clarity for investment. Any changes should favor projects that are in the front of the line for connecting to substations, for instance, because many won't get built.
Dan Burgess, who heads the energy office for Gov. Janet Mills, noted estimates that roughly half of all proposed projects are ultimately canceled for a variety of reasons. Burgess said he didn't want a moratorium to disrupt the installation of small, home-size solar arrays. He also said a stakeholder group could look for ways to encourage the co-location of batteries with solar projects, because energy storage increases the value of solar energy by working around its intermittent nature.
Solar power is a cornerstone of Maine's renewable energy surge. It is critical to the Mills administration's multifaceted climate action plan. Recent laws have created a gold-rush mentality among companies that are building or proposing hundreds of new projects.
But some lawmakers, notably Republicans, say the financial incentives that have put Maine on the radar of clean-energy developers across the globe aren't being shared equitably with electricity customers.
The sponsor of L.D. 583, a bill aimed at repealing the foundations of Maine's solar laws, said the entire policy is upside-down. Rep. Jeff Hanley, R-Pittston, said Maine produces only a tiny amount of the world's greenhouse gas emissions, and the subsidies that support solar aren't worthwhile to low-income Mainers. There are no solar panels at the seven trailer parks in his district, Hanley said, and it was time to end costly incentives.
"The hole is getting deeper," Hanley said. "Quit digging."
But Hanley's view wasn't shared by anyone who testified at the hearing. Instead, the focus was on how to improve the policies and take advantage of development activity.
This unprecedented activity is being spurred by policies and laws enacted since 2019, aimed at encouraging a rapid shift away from oil and gas to renewable electric power for running cars and heating buildings. The state's new Climate Action Plan, a blueprint for how to electrify Maine's economy and prepare for a changing climate, strongly encourages solar development.
Another law aimed at upgrading the state's renewable portfolio standard, which requires electricity suppliers to get an increasing percentage of power from "green" generators, attracted several utility-scale solar projects last year. They signed contracts for consumer-friendly rates with the PUC. A second round of bids is currently in motion.
Those events represent a 180-degree change in direction from policies embraced during the LePage years, which sought to undermine solar energy.
But as the hearing made clear, size matters in solar, because of costs associated with economies of scale.
Maine manufacturers represented by the Industrial Energy Consumer Group noted contracts approved by the PUC through a competitive bid process came in at an average of 3.5 cents per kilowatt-hour, a good deal for ratepayers. Prices for smaller, so-called distributive generation projects were four times as high, and the provision that created that policy should be repealed, they said. Uncompetitive solar can cost ratepayers between $100 million and $200 million a year, according to Tony Buxton, a lawyer for the trade group.
A similar point was made by Paul Serbent, technology manager at Huhtamaki, a food packaging manufacturer in Waterville. Rates that go up a quarter of a cent can lead to lost contracts for large energy users, he said. If the PUC can contract for solar at 3.5 cents a kilowatt-hour, he said, there's no reason to pay more.
"Please correct this problem for Maine," Serbent said.