SB 9 and The Future of Connecticut’s Solar Industry

Though legislators were involved in an emergency session just a floor below and could not attend, many business owners and concerned citizens turned out for the Acadia Center’s Forum on the Future of Solar Energy on January 22nd at Connecticut’s state capitol.

The panel consisted of Claire Coleman (Connecticut Fund for the Environment), Erica Dahl (Vivint Solar), Jamie Dickerson (Northeast Clean Energy Council), Sean Garren (Vote Solar), Ellen Hawes (Acadia Center), and Noel Lafayette (SHR Energy Management). The subject of the forum: SB 9, Public Act No. 18-50—a bill passed that concerns Connecticut’s energy future.

Upon first glance, SB 9 looks to be a great push toward majority renewable energy in Connecticut. However, when you get to section 7B:

On or before September 1, 2018, the authority shall initiate a proceeding to establish tariffs that provide for twenty-year terms of service described in subdivision (3) of this subsection for each electric distribution company pursuant to subparagraphs (A) and (B) of subdivision (2) of this subsection. In such proceeding, the authority shall establish the period of time that will be used for calculating the net amount of energy produced by a facility and not consumed, provided the authority shall assess whether to incorporate time-of-use rates or other dynamic pricing and such period of time shall be either (i) in real time, (ii) in one day, or (iii) in any fraction of a day not to Substitute Senate Bill No. 9 Public Act No. 18-50 18 of 54 exceed one day. The rate for such tariffs shall be established by the solicitation pursuant to subdivision (2) of this subsection.

What do this bill and section 7(b) in particular mean for the solar energy industry in Connecticut?

End of Net Metering & Residential Solar Investment Program (RSIP)

The end of net metering is tied to the end of the RSIP. At the current run rates, the RSIP will run out mid- to late-2019, and the end date is an ever-moving target. The loss of the RSIP, net metering, and the federal Investment Tax Credit stepdown beginning in 2020 are major challenges for the solar industry to overcome in such a short window.

Current solar customers are grandfathered into net metering until December 2039, but the future of solar in CT is uncertain. Tell your friends and family to act now if they are considering going solar!

Tariffs Replacing Net Metering Have Proven to be Detrimental to Solar Markets in Other States

Multiple states have dismantled net metering and have taken similar approaches to what the bill calls for.

Utah, for example, adopted 15-minute netting at the end of 2017, and residential solar deployment is down 70% of what it was under net metering.

Nevada, which eliminated net metering completely, saw massive job loss almost overnight.

Maine attempted the implementation of a “buy-all, sell-all” approach, which has proven unsuccessful. This measure is likely to be overturned by the legislature this year.

Compared to current compensation, the new tariffs will likely provide 20-50% less value to homeowners in Connecticut. This will ultimately lead to less solar deployment in the state and, in turn, massive job loss.

New Tariff Structures May Make TPO Financing Models Impossible

TPO (third-party ownership) arrangements account for the vast majority of residential solar systems in Connecticut.

TPO models are the primary way for low-to-moderate income families to have access to solar—these models do not require large cash payments or loans and provide immediate utility bill savings. The loss of these arrangements would, without a doubt, drastically reduce residential solar deployments and jobs in the state.

To Put it In Perspective…

Connecticut’s solar industry is made up of 200 companies, 2,200 jobs, and $1.5 billion in investment. If this bill stands as-is, our state could see the loss of a major industry. With many corporations already leaving the state, isn’t this something we should strive to avoid? Not to mention, doesn’t this go against our goal of reaching at least 40% clean energy by 2030?

“If you want people to do something, make it easy,” said Noel Lafayette of SHR Energy Management. “It’s hard to build an industry when the rules are being rewritten every two years. Connecticut is talking in circles while other states are experiencing an economic boom.”

The Proposed Action Plan for 2019

The proposed plan to protect Connecticut’s solar economy consists of four main points of action:

    1. Pause implementation of Section 7(b) of SB 9. Without an SB 9 fix, Connecticut will enact regressive policies in the third quarter of 2019 that will harm solar growth and jobs. Representatives of the solar industry are calling for a study of residential solar policy and best practices from other states before implementation.
    1. Maintain Connecticut’s current net metering program. All of the clean energy leaders in the country (New York, Massachusetts, and California, among 35 other states) have net metering—it is crucial to solar growth.

      In an effort to make solar even more accessible, we move to eliminate the barriers to commercial solar and lift the cap on virtual net metering for municipalities, farms, and state properties. We also propose lifting caps on shared solar and project size, as well as ensuring immediate shared solar deployment.
    1. Study the benefits and costs of net metering, including any cost shift, and evaluate net metering successor programs in other states. We have the time to do a proper study before implementing policies that are detrimental to the solar industry in our state.
  1. Act on the results of the study and implement a new solar program on January 1, 2022 to allow for an orderly transition from the net metering program.

Now, more than ever, we need to show up for the future of our state’s solar industry. Policy matters, both for the solar industry and for the planet. “This is not a choice between a strong economy and a strong environment,” said Claire Coleman at this year’s Environmental Summit. “We don’t have to choose—in fact, they’re intertwined.”

With the future of solar so unclear, we urge those interested in going solar to act now. Tell your friends and family to book a free solar assessment with us today!