A controversial bill that would reduce reimbursement rates for rooftop solar users passed its last hurdle in the Indiana General Assembly and advances to Gov. Eric Holcomb.
Senate Bill 309 passed the Senate for the final time with a 37-11 vote Monday.
Solar panel owners who feed surplus energy to the power grid are currently compensated at a retail rate that helps pay off their investments. That means utility companies are paying those solar panel owners more for the power they generate than the wholesale price they pay their primary power generators.
State Sen. Brandt Hershman's bill would significantly reduce the solar panel owner’s rate in five years, although it would protect current owners for 30 years.
Solar energy accounts for less than 1 percent of Indiana's power, but utilities worry it could someday cut into profits if its popularity continues to grow.
A Holcomb spokeswoman did not immediately respond to a request for comment.
Hershman, R-Buck Creek, said modest changes made to the bill during the session have improved it. He said SB 309 will increase a threshold that could allow more Hoosiers to benefit from net metering by 50 percent.
“Overall, I think this is a bill that will significantly increase the number of people who are able to participate in net metering and selling power back to the grid,” Hershman said.
Opponents argue that it will remove incentives for those who might want to invest in solar energy in the future.
"Solar energy jobs are precisely the kind of jobs that we need across Indiana, especially in those communities that have faced years of economic distress,” said Jesse Kharbanda, executive director of the Hoosier Environmental Council, in a written statement after the House vote.
“The solar industry now employs over 260,000 employees nationwide, more than triple those in the U.S. coal industry,” he said. “And yet today, Indiana state representatives backed a bill that will move Indiana backwards when it comes to a critical segment of the solar industry—customer-owned solar energy.”
Kharbanda urged Holcomb to veto the bill and “stand up for 21st century jobs and innovation."
Currently, solar generators receive about 11 cents per kilowatt-hour for extra energy they produce. The bill would reduce that rate—over time and for new solar panel owners—to about 3 cents per kilowatt-hour, plus a 25 percent premium.
The bill’s supporters—including utilities—say the current system burdens customers without solar panels.
“If we allow this to continue under the current policy system, I think at a certain point it will result in a very strong backlash and unsustainable shift onto other ratepayers,” Hershman said.
Sen. Jim Tomes, R-Wadesville, said he had concerns about the bill in its original form—which would have reduced the incentives for solar panel owners more signficantly—and would not have voted for it because he thought it was unfair. But Tomes said amendments made to the bill revised it dramatically, which changed his vote.
“We’re at a point now where this bill has been modified and changed, and it has some substantial benefits to it now,” Tomes said.
The bill, among other provisions, requires the Indiana Utility Regulatory Commission to publish results of recent rate reviews and study the rates utilities charge for backup power.
It would also encourage competitive procurement and cogeneration for larger energy producers.
But Sen. Mark Stoops, D-Bloomington, argued that the rates utilities pay to solar owners is the issue that Hoosiers are concerned about.
“I was hopeful that at some point we would have some language in here that would send this discussion to the IURC so they can actually give a fair analysis of the reimbursement rate,” Stoops said.
Jodi Perras, Beyond Coal manager for the Indiana Sierra Club chapter, said she was disappointed with the Senate’s final vote.
“We are hoping that Gov. Holcomb will veto the bill and we’ll be working to ensure he has the information he needs to make the right decision,” Perras said, adding that the General Assembly has not done what it should to make sure this legislation is reasonable for Hoosiers.
“Other states have studied it, and required that utilities present the facts,” she said. “But in this case we have a Legislature that’s rushing to take away people’s energy freedom without making sure there’s a full study of the issue.”
But Hershman called the bill “forward-looking policy that adjusts our laws to reflect the technological reality and changing energy generation mix. And does so in a way that is going to allow more people to use solar – not fewer.”
Holcomb has seven days from the time the legislation lands on his desk to decide whether to sign or veto it. The bill could also become law without his signature.
Katie Stancombe is a reporter for TheStatehouseFile.com, a news website powered by Franklin College journalism students.