Public response to testimony given at the Statehouse on Wednesday morning regarding a bill that would end net metering, an incentive for Indiana solar power users, ranged from silence to bursts of applause.
Senate Bill 309, was written by Sen. Brandt Hershman, R-Buck Creek. It proposes abolishing net metering throughout the course of 15 years and it would grandfather in those who have already begun to install alternative energy options.
Currently, Indiana homeowners and businesses that use rooftop solar systems are credited financially by utility companies for the extra power their systems generate and send to the grid. Critics of this process, called net metering, argue it is unfair to non-solar energy users because it charges them for the energy that solar users still take from the grid.
Before opening the floor to testimony, Hershman detailed why he believes the current net metering system is inequitable.
Hershman said he believes net metering acts as a subsidy.
“It’s not only how much you pay for power,” he said. “It’s your ability to receive it on a consistent basis. The sun doesn’t always shine. There has to be an inherent capacity to make up for that. The grid was not designed to be a two-way instrument.”
In response to testimonies given in a previous legislative session, the House took with consent amendments to the bill. One added the topic of self-generation by public school corporations to be considered for interim study.
Another adjusted the grandfathering deadline for Hoosiers in the process of installing solar power from July 1 to Dec. 31. The grandfathering provision allows those who install solar technology on their property by the deadline to continue receiving financial credit at the current rate of approximately 11 cents per kilowatt hour instead of the reduced rate of about 3.5 cents SB 309 would establish.
A second part of the amendment aims to protect homeowners by including their solar investments as part of their property value should they decide to sell their house.
About 60 people signed up to testify Wednesday. They represented several regions of the state, from as far as Elkhart, Milltown and Fort Wayne. Because of the number of people waiting to testify, the legislature’s lunch break was cancelled.
Mark Maassel, president of the Indiana Energy Association, which includes among its members energy companies such as Vectran and Duke, testified first. Maassel said the IEA was not satisfied with some of the “restrictive” language in the bill but urged the House to vote for it regardless.
“We look at this bill as compromised,” Maassel said. “It’s not perfect, but we view it as an important step forward as we evolve our policy. This bill sets out the process for transitioning away from subsidies. If we are talking about economics, and we are, net metering is a subsidy.”
Former United States Rep. Barry Goldwater Jr., R-California, rose to testify not explicitly for or against the bill but to ask the House to consider what exactly defines a subsidy. He compared using solar power to using energy-efficient appliances and said the draw to use less money in both situations functions more as an incentive than a subsidy.
“Utilities have something we call renewable electric standards,” Goldwater said. “Net metering is part of that standard. If I buy energy efficient-appliances, I’m buying less electricity. Is that a subsidy or an incentive? I think it’s an incentive.”
As Goldwater closed his testimony, those observing from the gallery applauded for the first time.
Republican Brian Dickerson, a city council member from Elkhart, said he agreed with the intent of the bill. He said he believed his constituents should be allowed to invest in renewable energy sources and noted a Mennonite congregation in his community was installing a solar panel on the top of its church.
Still, he said he was concerned by the idea of non-solar users paying for solar users.
“If any Hoosier wants to invest in these things, they should have to pay for it themselves,” Dickerson said.
Eric Hesher owns Renewable Energy Systems, a business he started out of his garage that designs, installs and services systems of renewable energy in the Midwest. He said solar allows Indiana businesses to be more competitive and expressed concern for the customers SB 309 might affect.
“Many of our customers are hardworking people who want to invest in their future,” Hesher said. “Solar systems allow people considering retirement to stay in their homes due to a reduced energy cost.”
Hesher said the solar panels his business provides about 50 to 60 percent of the energy his customers need. He added the panels often do generate excess energy but said that occurs at specific times of year or specific times of day, such as between 10 a.m. and 2 p.m.
Allyson Mitchell said she was also concerned about the effect the bill would have on low-income people. Mitchell works as director of sustainability for Prosperity Indiana and said she knows solar power directly benefits low-income individuals.
“When picturing rooftop solar, you may not picture a panel on a mobile home,” Mitchell said. “This bill limits the options of low-income people to choose their energy generation.”
Mitchell said some clients of Prosperity Indiana rely on solar energy to be able to afford energy at a time when energy prices have been increasing across the state. It remains unclear the extent to which traditional power users pay for those using solar power if they pay any extra costs at all. Maassel said the number of wind and solar rooftop generators in the state only numbers around 1,100, which means net metering charges people a cent per month on their utility bills — if that.
Many of those who testified argued there was not enough “data-driven” information propelling the bill forward and criticized legislators who compared Indiana’s solar industry to states like Nevada and Arizona. Critics said those states were environmentally not similar enough to Indiana to provide data relevant to SB 309.
Although he did not explicitly support or oppose the bill, Goldwater told the legislature that issues regarding renewable energy are only beginning with solar. More changes should be expected, he said.
“Instead of sitting here fighting rooftop solar, this issue, why not be out in front?” Goldwater said. “The utilities are fighting because they fear competition. Solar energy is only one of the new technologies coming down the pipe. The American people love renewable energy.”
