What is Senate Bill 309 and what is its status?
Senate Bill 309 is an Indiana legislative bill, authored by Brandt Hershman and signed into law by Gov. Holcomb on May 2, 2017, which amends the Indiana Code concerning utilities. It will go into effect July 1, 2017 and will affect the "net metering" relationship between utility companies and their customers who generate excess electricity which feeds back onto the utility grid.
Full Bill here - https://iga.in.gov/legislative/2017/bills/senate/309
What is Net Metering and why does it matter for Solar PV?
Net metering, as it has existed for some time, has allowed utility customers who generate electricity - in this case solar PV installations - to sell the excess energy created back to utility at the same rate the customer purchases it. So, let's say a warehouse has a solar array installed which helps offset some its operational energy load. On a given day, for a few hours during the peak performance of the solar array, the solar array might generate more energy than the warehouse facility uses. With net metering in place this facility can send this energy back into the lines it normally receives energy from. The utility company then compensates the warehouse for this electricity (at the same rate the warehouse buys electricity from the utility company). This one-for-one model might sound equitable; shouldn't a utility company have one rate of electricity, especially if they're turning around and selling that electricity to another customer down the block? But we also understand that the utility company has embedded costs in their operation: maintaining lines, upkeep of the grid, etc. And, if you think of our example in another way, the warehouse solar array is using the utility grid as their "battery". The presence of net metering has allowed solar installations to use the utility grid as storage for excess energy that, without a local battery solution in place, would go wasted. So SB 309 is an attempt - even if imperfect - an attempt to begin addressing the relationship of utility companies with a growing population of consumers who also happen to be energy generators.
What are the general highlights of this legislation?
More Limits and Definition for Net Metering
Investor Owned Utilities (IOUs) may limit the aggregate amount of net metering facility nameplate capacity under the utility's net metering tariff to (1) not less than 1.5% of the utility's most recent summer peak load or (2) July 1, 2022; whichever occurs earlier.
The new tariff reserves 40% of the capacity for residential customers, 15% of the capacity for organic waste biomass facilities, which leaves 45% for all others (schools, farms, businesses, etc.)
Timing for New Installations
Utility customers who install a net metering facility on their premises after December 31, 2017 will be served by the new tariff until July 1, 2032 (15 years). Existing customers with net metering facilities (or facilities participating before Dec. 31, 2017) shall continue to be served under the terms and conditions of the current net metering tariff until July 1, 2047 (30 years). The successor (transfer of ownership) of any net metering facility may continue being served under the tariff into which it was originated.
This applies to customers with net metering facilities sized at a nameplate capacity of the lesser of (1) one megawatt or (2) the customer's average annual consumption of electricity on the premises
How will this affect the solar energy market?
There are many different stakeholders and interests represented in the solar energy market. As such, there is a variety of reaction to this legislation. Some welcome the expanded definitions as they can plan for the future with a reliable agreement in place. Others are outraged over what they see as a direct attack on the expansion of renewable energies. Many others sit in the middle not really sure what this will mean in the coming years.
We welcome the expansion of energy-generation capacity from 1% to 1.5%. In most cases, this should help many of our existing and prospective clients with their solar energy production agreements. Especially those who have a 30-year assurance to their current agreement. We will help others reach their long-term energy goals with changes in low-rate or avoided-cost agreements in place.
We at Solential are committed to helping you out no matter wherever you might fall on the spectrum. This legislation will certainly bring some change to the market, but we've been in this market from its infancy and we're well-acquainted with change. Please feel free to contact us if you have any questions on how this might affect you. Part of our job as solar energy consultants is to help you navigate your business or organization through the changing tides of technology, legislation, market climate, and adapting society.