by jboullion | Mar 27, 2013 | Uncategorized
An editorial from The Journal Times about how Wisconsin could benefit from new solar legislation. Find the original posting of this article here.
Unlike many other states, Wisconsin hasn’t fully taken advantage of the potential for energy savings through the expansion of homegrown solar generation.
That could change under a bipartisan proposal by state Reps. Gary Tauchen, R-Bonduel, and Chris Taylor, D-Madison, who are crafting legislation that would exempt owners of renewable generation at a home or business from being regulated as a public utility.
The heart of the proposal is that it would allow third-party ownership of solar systems — allowing solar companies to come in and install solar generation systems and assume the upfront costs and then have the business or homeowner repay that over time through savings on their energy bills.
It’s a plan that has been adopted in other states to good effect. Carl Siegrist, a solar energy consultant, said nearly three-fourths of the solar market last year came from third-party ownership, according to a recent story in the Milwaukee Journal Sentinel.
While the upfront costs of solar installation have dropped considerably in recent years — some reports put the drop at 50 percent — those initial costs still represent a hurdle for renewable energy, and the Tauchen-Taylor bill could help Wisconsin businesses and homeowners to clear that barrier.
According to a recent Milwaukee Business Journal report, the return on investment for solar installations is between seven and 10 years. But after that, the solar systems could provide low- or no-cost energy for another 30 years.
One of the companies that’s been a fan of third-party ownership is Kohl’s Corp., which has contracted with SunEdison for installation of solar generating panels at many of its stores in other parts of the country. The Milwaukee newspaper report said those Kohl’s department stores generate “three times as much power as all the solar electricity being generated in Wisconsin today.”
“If there was third-party ownership allowed, they would have it on every one of their stores in the state,” the report quoted Steve Johnson, a solar energy developer in Delavan.
That kind of impact not only saves energy and dollars, but it would buoy Wisconsin’s economy by creating a potential groundswell of solar installations and the attendant jobs that work would create across the state.
The fly in the ointment is opposition from the state’s utility industry, which argues that increased use of renewable energy would create “partial customers” and reduce their sales. This would result in a cost shift to regular customers because the fixed costs for poles, wires and business operations would be spread across those users.
That’s a legitimate concern and we would hope it could be addressed in the legislation, but it is not dissimilar from the effects of energy conservation and those efforts have been pushed by the state — and by utilities themselves — for decades.
A low-cost financing system to encourage the use of solar generation makes sense for the long-term energy profile of Wisconsin and we urge the Legislature to give this bill the bipartisan support it deserves.
Find the original posting of this article here.
by jboullion | Mar 18, 2013 | Uncategorized
A great article from Tom Content at JS Online on the third-party ownership bill. Find the original article here.
State’s electric utilities oppose move to allow third-party solar financing
Wisconsin is missing out on a wave of solar power development that’s going on around the country.
One example: Kohl’s Department Stores around the country generate three times as much power as all the solar electricity being generated in Wisconsin today.
What’s driving the boom in other states is third-party financing, which allows a company such as SunEdison, a builder of solar power plants, to own the panels on the roof of a Kohl’s store. That’s not allowed in Wisconsin, but would be under a bill being drafted in Madison.
The proposal, backed by a group of clean energy companies and the Wisconsin Farmers Union, faces opposition from the lobbying group for the state’s electric utilities.
The utilities worry that such a change would open the door to more renewable energy and drive up costs for other ratepayers.
The legislation is being crafted by Rep. Chris Taylor (D-Madison) and Rep. Gary Tauchen (R-Bonduel). It’s expected to be among a host of energy issues that may come before the Legislature now that the debate over mining legislation is finished.
The change would exempt owners of renewable generation at a home or business from being regulated as a public utility. Supporters say it’s a low-cost step that would stimulate economic development in the form of increased investment by solar installers that have moved work to states that are encouraging renewable energy.
“This will open up the renewable energy market to companies that don’t have a lot of money lying around to finance clean energy projects,” said Michael Vickerman, policy director for Renew Wisconsin, a clean energy advocacy group.
For Renew Wisconsin, the effort could make up ground lost in recent years after the failure to expand the state’s renewable energy standard, and following moves by state regulators and utilities to shift their focus away from support for customer-owned renewable systems.
The markets where solar has taken off are dominated by those that permit third-party ownership, said Carl Siegrist, a solar energy consultant who was a renewable energy strategist at We Energies.
“Nearly three-fourths of the solar market last year came from third-party ownership,” said Siegrist, who discussed the proposal at the recent Sustainability Summit in Milwaukee.
At stores around the country, Kohl’s buys power from SunEdison, which built the panels on the roofs of the Kohl’s stores.
“If there was third-party ownership allowed, they would have it on every one of their stores in the state,” said Steve Johnson of solar energy developer Convergence Energy, which developed a solar project in Delavan.
Fears of cost shifting
Utilities are concerned that the proposal could lead to higher rates.
According to Bill Skewes, who heads the Wisconsin Utilities Association, the lobbying arm for the utility industry, the biggest concern is that utilities will see cost shifting because they will sell less power to customers who install solar systems.
The fixed costs of paying for the poles, wires and day-to-day business operations of the utility would then have to be spread across the remaining customers, he said in a memorandum to lawmakers on the issue.
“The customers who become partial customers because of a distributed generation agreement would be subsidized by the other customers on the utility system,” Skewes said.
Supporters of the renewable energy shift see potential for helping farmers address their phosphorus and manure challenges by enabling them to put up more anaerobic digesters.
But, Skewes said, “advocates that want to help farmers may, in the next breath, decry the utility rate increases that further discourage economic development at a time when Wisconsin is trying to foster job growth.”
Supporters concede that the shifts could help businesses that install solar generation avoid some of the rate pressure in Wisconsin, and it could result in reduced power sales by utilities.
At the same time, they note that utilities see lower sales every time a business takes steps to cut energy waste or replaces an incandescent light bulb with an LED bulb.
Making solar affordable
Nationwide and worldwide, solar development is booming, with solar generation now reaching more than 6,000 megawatts, or enough to supply 1 million homes, according to GTM Research.
While the price of solar systems is coming down quickly – it has fallen by 50% over five years – companies are conserving cash rather than looking for places to spend it.
So when an efficiency consultant such as Johnson Controls Inc. contracts with a building owner to help cut energy waste, the upfront cost is paid for by Johnson Controls, not the utility customer. The customer then pays Johnson back over time through the savings on energy bills.
The renewable proposal works the same way, said Amy Heart, solar program manager for the City of Milwaukee. The solar company would pay the upfront costs, with the customer paying a fixed price over time for the power generated by the panels.
“We see the opportunity to not only support our solar industry, but we also have the opportunity to reduce our energy costs and lock in those rates for a 10- to 20-year term, which is that consistency we’re looking for,” Heart said. “In the long run, if we can lower our energy bills for taxpayers, that’s the idea.”
It’s a way to lock in prices over time from solar, even if utility rates go up, Siegrist said.
The proposal also overcomes one of the biggest hurdles facing renewable energy – that its upfront cost makes it affordable to a select few.
(See the original posting of this article here.)
by jboullion | Mar 15, 2013 | Uncategorized
Doug Stingle, the MREA Development Director, wrote this great article on why Wisconsin needs options for third-party ownership – it’s clear we need Clean Energy Choice legislation to boost renewable markets. (See the original posting on SeeingRED here).
The US solar electric (PV) market is booming. In fact, according to the Solar Electric Industries Association (SEIA), the residential solar electric market grew 12% over the 2nd quarter of 2012 and had its largest quarter in history. Wow, that is some impressive growth that many industries would be boasting about for quite some time. Of course, the solar industry is proud of the market growth and does some bragging about their success.
However, living in Wisconsin, you would never hear about the growth of the solar market, because the solar market in Wisconsin is stagnant.
So where are all these solar panels getting installed? According to SEIA in the 3rd quarter of 2012 (the most recent period statistics are available), Wisconsin ranked 26th in installation of solar electric capacity. Unsurprisingly, California ranked number one for installed capacity of solar in 2012, with Arizona a close second. California is a sunny state with a great solar resource, but that is not completely what is driving the installations there. The number one driver of home-sited solar systems is a third-party ownership model.
How does this work? First, you contact Company X and let them know you are interested in solar on your house. Next, Company X does an assessment on your home to see if the solar resource is adequate, and then the company looks over your electric bills to properly size a system. Company X can then come back and offer you the opportunity to install solar on your house, with no upfront costs, and save money on your monthly electric bills.
For example, let’s say you are paying $90 a month on your current utility bill. Company X can offer you the option of installing solar, and you pay Company X $80 a month as a result. Company X is the owner of the solar system, and you buy the energy produced from the solar array on your home. Company X is able to offer you the chance to reduce your electric bill and utilize solar, because the company is able to take a tax break on the installed system cost as well as sign a net-metering agreement with the local utility, allowing the company to sell any excess electricity generated by the solar system back to the utility.
Who wouldn’t want solar installed on their house and to pay less on their electric bills, all with no upfront cost? Almost everyone. So why aren’t thousands of Wisconsinites lining up to get solar on their roofs?
In Wisconsin we have just two options when it comes to electricity at our home:
- We connect to the local utility company.
- We generate and store our own power.
This gives the utility companies a virtual monopoly on power supply, as most people don’t have the resources to pay for all of the power up front. A third-party owned renewable energy generation system, as an option, is currently in legal limbo in Wisconsin.
The arrangement is neither legal nor illegal. The Public Service Commission in Wisconsin has advised that any power generating facility that is not owned by the same entity where it is located, is in fact, a utility and subject to utility regulations. This sort of legal gray area has a chilling effect on third-party owned solar systems, as companies aren’t keen on possibly facing legal action that would cut into their bottom line. Why take the chance on a possibly illegal installation in Wisconsin when this arrangement is perfectly legal in many other states?
In addition, this legal black hole is preventing schools and non-profits from partnering with a third-party who can take advantage of tax incentives that a non-profit cannot, to install solar at their location. Third-party owned renewable energy systems are great drivers of the market and are employing thousands of workers manufacturing solar components and installing systems.
The solar market is booming because of these third-party owned systems. How can we get more installed in Wisconsin and create homegrown energy and jobs?
We need clean energy choice legislation that allows third parties to own energy generation sited at customer locations and to not be regulated as a utility. Clean Energy Choice is a matter of fairness. We need to create competition in the energy market. Free market supporters can easily see this as a case of government being in the way of the free market.
Write, call or email your state representative and Governor Walker and tell them to make Wisconsin open for (renewable energy) business and to support giving Wisconsin residents a clean energy choice. Also visit
www.renewwisconsin.org and sign on to the letter of support for clean energy choice.
–Doug Stingle
(See the original posting of this article on SeeingRED here).
by jboullion | Feb 19, 2013 | Uncategorized
Third-party residential solar has become nearly a billion-dollar industry in California. We need to work to get Wisconsin up to snuff on third-party opportunities. See the original article in RenewableEnergyWorld.com by James Montgomery here.
New Hampshire, USA — Statistics released this week by SunRun and the PV Solar Report show the growing popularity of residential solar energy in general, and third party-owned solar in particular.
Third party-owned solar installations have grown significantly in the past few years, and now represent more than half of new solar capacity in California and a handful of other states, according to Greentech Media. For residents, outright self-ownership might be more expensive up-front but could generate an overall higher return, but along with ownership comes decisions about maintenance and other issues, notes Stephen Torres, managing director of the PV Solar Report. With the third-party model, “all that other stuff is taken care of; someone will do it for you, and for lower overall cost.”
Total solar energy systems in California rose 54 percent in 2012 to nearly 40,000, according to the PV Solar Report. In terms of contract dollar values, more than $1.2 billion of solar energy systems were sold, a 41 percent increase from 2011. Third-party owned solar delivered than $938 million to the California economy in 2012, an 86 percent jump from a year ago and roughly equaling the previous five years combined, according to their report.
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by Ed Blume | Oct 30, 2012 | Uncategorized
From an article in the Sheboygan Press by Dan Benson. Third-party ownership gets a look in Wisconsin:
Sheboygan aldermen will get their first look Tuesday night at a
proposal to install solar panels on city buildings at no cost to the
city and would hopefully lower the city’s electric costs.
Members
of the city’s Sustainable Sheboygan Task Force, which examines ways the
city can operate in a more environmentally friendly way, and
representatives from Arch Electric in Plymouth will make the
presentation to the council’s Committee of the Whole at 5 p.m. in the
third floor council chambers at City Hall.
The
key to the proposal is using a financing plan in which the city would
lease the panels from Arch Electric. The energy savings would be greater
than the lease costs, said Jennifer Lehrke, a local architect and task
force member.
“It
would not cost the city anything because the panels are owned by a third
party,” she said. “The investors who do this get to take advantage of
tax credits and accelerated depreciation and as a lease there is a small interest being paid to the investors.”
The
task force is recommending that the council finance a study to see
which buildings would be the prime candidates for solar panels. Lehrke
estimated the study would cost less than $5,000. Lehrke estimated the
study would take two or three months to complete.
If adopted, the plan would would be the first in the state, she said.
“We
would be a forerunner in the state. It’s a way to distinguish
Sheboygan, probably the first of its kind in the state,” she said.
Arch Electric owner Ed Zinthefer confirmed that.
“It’s never been done in Wisconsin,” he said.
His
company has installed solar panels on a number of local projects,
including the Maywood Environmental Center and at Ebenezer and First
Congregational United Churches of Christ.
Former
Common Council member Jeanne Kliejunas, also a member of the task
force, said Arch Electric is one of the most experienced solar
installation companies in the state that until now has worked mostly
with private clients.
“They would like to expand into the municipal market,” she said.
