Hastening the Transition to Renewables

Massachusetts residents typically come up to enjoy Vacationland, but there’s one arena in which their home state holds more attractions: renewable energy.

The clean-energy landscape in Massachusetts can prompt “green envy” among Mainers, with its ready access to solar loan programs, personal income tax credits for solar installations, electric vehicle rebates and a handful of state assistance programs dedicated just to solar.

Can Maine share in this clean-energy bonanza? There’s vast potential here, but the answer is far from clear.

A study presented to the Legislature last March estimated the value of solar power produced in Maine at 33 cents per kilowatt-hour, far greater than the current credit (roughly 13 cents per kilowatt-hour) for those producing it. That study did not even count the economic ripple effects from the sort of dramatic job growth seen in Massachusetts.

Solar power reduces electricity prices, the need for more power generation to meet peak demand and the emission of problematic greenhouse gases. It provides greater price stability and energy security in the face of volatile fossil fuel markets.

One critical step that the report recommended is already underway: changing Maine’s net energy billing (the crediting system utilities use for those that generate power and draw power from the grid). The Public Utility Commission is coordinating a “stakeholder group” with utilities, solar power advocates and the Maine Office of the Public Advocate. By next year, a consensus could emerge on an approach that would create more predictability for Maine’s solar market.

Federal incentives offering homeowners and businesses a 30 percent tax credit have helped fuel recent solar growth. But that credit is slated to end in December 2016 (with only a 10 percent credit for commercial installations remaining). In states like Massachusetts, that loss will be offset by supportive policies and ongoing state incentives. But in Maine, where Gov. LePage has worked aggressively to dismantle and block renewable-energy measures, the loss of federal tax credits could hit far harder.

There’s a slight chance that some federal solar tax credits could survive. Maine-based energy consultant Steve Kahl hopes that Congress will consider ratcheting the credit down gradually – decreasing it by 5 percent a year over six years, for example – creating a “far more economically viable” transition for the solar industry.

While Mainers wait to see what happens in Washington and Augusta, they’re demonstrating their trademark ingenuity in financing solar power locally:

• One “community solar farm” is running and a handful more are planned, giving those who can’t install solar directly (whether renters or those with shaded structures) a chance to invest in a larger array, often sited remotely, in return for credits on their electricity bill. Obama recently launched a National Community Solar Partnership to ensure that low- and moderate-income Americans have access to solar, and nationwide these projects are multiplying quickly. One study estimates that up to half of the distributed solar market (generated near where it is used) could be in shared projects by 2020. Community solar farms are currently limited in Maine to nine co-owners, but if they could expand in participants and power generated, the “numbers get better for everyone,” says Sue Jones, ReVision Energy’s director of community solar farms. By everyone, she doesn’t just mean the investors, but every Maine ratepayer.

• Unity is exploring whether its tax increment financing district can be amended to include a solar array that would lower electricity rates for local businesses, helping retain and attract new commercial growth. Economic development consultant Noreen Norton says such tax districts can work with solar either in the way Unity is envisioning, where the district revenues support solar arrays that benefit area businesses, or they can allow some portion of taxes to return to commercial developers of solar installations.

• Unity is also pioneering a Group Power Purchasing Agreement in which several nonprofit organizations are joining forces to benefit from an agreement that requires a minimum 50-kilowatt installation. As noted in the previous Sea Change column, many towns around Maine are already using these agreements to install solar arrays on municipal buildings.

• With town support, Solarize Freeport is using a bulk purchase model that offers residents a discount on the cost of solar installations if they act by a certain deadline. (Massachusetts has a full-time coordinator working to help “solarize” towns there, an effort that has reached more than 50 communities since 2011.)

• Maine Audubon recently completed a major solar installation with money loaned by a local corporation. This kind of peer-to-peer lending is widespread in states with strong solar incentives, as are solar-financing platforms that offer easy access to loans, where the solar installation itself serves as collateral.

The quest for creative ways to advance solar in Maine invariably leads back to Augusta. From states like Massachusetts, policymakers can learn ways in which strong state commitments to solar create market demand, lure new investment and generate new jobs.

Current incentives supporting renewable energy represent a tiny fraction of what we collectively pay subsidizing fossil fuels. The International Monetary Fund recently estimated that worldwide subsidies to fossil fuel companies represent the equivalent of $10 million a day, factoring in associated public health costs and storm damage linked to climate disruptions.

Alongside offering state-level incentives, Maine needs to create stable, long-term policies and programs that can enable solar markets to grow. Many Maine legislators understand this need. Their leadership could help the sun power Maine toward a cleaner, healthier economy.