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Governor signs solar-power compensation bill into law

May 2, 2017

Indiana Gov. Eric Holcomb has signed a bill into law that will reduce the financial benefits available to those who install solar panels.

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 significantly reduces the solar panel owner’s rate in five years, although it protects current owners for 30 years.

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.

Tuesday was the last day Holcomb could veto or sign the bill, which critics contend is part of a broader nationwide push by utilities to seize control of the emerging solar market.

Holcomb said he understands the concerns, but signed the bill because the benefit will be phased out slowly.

Indiana's investor-owned utility companies lobbied for the measure during the legislative session. They say solar panel owners who feed excess power to the grid are compensated too generously.

Critics say Indiana's approach is too Draconian and will muscle out smaller companies, like solar panel installers.

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