This blog post is the first part in ReVision Energy's response to recent press surrounding the costs of community solar to Maine ratepayers.
The Bangor Daily News and the Portland Press Herald recently reported on anticipated high costs of community solar while ignoring proven, quantifiable benefits. This anti-net energy billing reporting has caused public confusion and many questions from ReVision Energy customers and partners. The articles significantly overstate the costs of the incentive programs and connect them to increased rates for all Maine ratepayers, while failing to present the program’s substantial financial and environmental benefits. The state’s Net Energy Billing program (NEB) was established to incentivize homegrown, renewable energy development and diversify Maine’s electricity supply with small generation facilities, like solar.
While there are costs associated with the NEB program, the recent articles have not addressed any of the financial or environmental benefits. If there’s one clear takeaway from the many numbers in the press, it's that we need accurate data to guide smart energy policy. Maine State law requires that the Public Utilities Commission (PUC) report on both the costs and benefits to ratepayers from solar energy development. The current press is an alarmist reaction to costs based on recent rate submissions by utilities, which 1) are inflated estimates based on the utilities’ worst-case assessment of how much solar will come online in the future, and 2) fail to account for the financial and environmental benefits of distributed generation.
A 2021 independent study from a leading economic research firm, Daymark Energy Advisors—the employer of recently nominated PUC Commissioner Carrie Gilbert—confirmed this. In the study Costs and Benefits of Maine’s Net Energy Billing Program, Daymark noted a key concern—the PUC’s “method to determine NEB program impact does not recognize the entire savings or the benefits created when NEB solar facilities are installed.”
Daymark fully analyzed the program’s costs AND benefits, under multiple scenarios, concluding “the kWh credit program is providing net benefits to all Maine utility customers. The costs of the new tariff rate program exceed the benefits calculated in this report. This result corresponds to the projects in the kWh program reducing load requirements of the utilities, while projects in the tariff rate program do not.” Essentially, the kWh program, used by residential and small commercial customers, is clearly working and providing benefits to all ratepayers, but the tariff program, used for commercial or industrial projects, is not. The Daymark study indicates that the manner with which the PUC has elected to implement the tariff program contributes to the cost to Maine ratepayers. This is what we need to fix.
In our 20 years of working to build our just and equitable electric future, we have repeatedly seen that the grid of the past must shift to form the grid of the future. Our regulatory environment was built on a model that clean energy development has flipped on its head. We have seen the energy sector work to adapt its methods to evaluate costs and benefits, and that’s exactly what Maine needs to do to inform responsible policy. To make decisions that ultimately impact current and future electricity rates, we need to clearly see both costs and benefits. Unfortunately, the recent press is only highlighting the costs.
Even more, the numbers quoted assume that every project proposed in the NEB program will get built. As practitioners in this arena, we know this is simply not true. Many projects are getting stuck in lengthy interconnection studies, only to ultimately learn that the projects are uneconomical. We anticipate significant project attrition, which will absolutely bring down total program costs.
It is also important to point out that NEB costs are only part of the full picture. Let’s not forget about the volatile price of natural gas, and that rising costs of fossil fuels continue to drive up our utilities’ rates. The PUC itself acknowledges that the 2023 electric rate increases are due primarily to natural gas issues, saying: "The majority of New England and Maine’s electricity generation comes from natural gas and the recent standard offer price increases are related to increases in wholesale electricity market prices due primarily to constraints on the availability of natural gas in the region.”
Finally, around the country, community solar projects play an important role in increasing the accessibility of solar energy benefits to low- and moderate-income households. As a state, we can take lessons from these more mature community solar markets to increase benefits to all Maine ratepayers.
ReVision Energy is committed to working with policymakers to build on the historical success of NEB, address the tariff rate program, and ensure Maine is a leader in making clean energy both affordable and accessible to all. We will double down on our continued effort in advocating for the implementation of smart policy reform and ask our legislators to focus on action and improvements to the current NEB program. We look forward to working with the legislature and our newly nominated PUC commissioner to adopt smart policies that lift up all Mainers.