End of Net Metering Leaves Future of Solar in Connecticut Unclear

Planned changes to the way the state regulates how people pay for solar power are being met with mixed reactions and concern that it could hurt the industry.

Connecticut’s residential and commercial solar industry has seen significant development in the past decade.

A combination of federal and state incentives has led more people opting to install panels on their roofs or on their property as a way to offset their utility bills.

One company that has reaped the benefits of the boom has been Earthlight Technologies, which is based in Vernon, Connecticut.

“We're hiring like 15 people a year it seems like. We thought 40 was a lot a few years ago and here we are at 70, 71,” said Tim Schneider, one of the owners of Earthlight Technologies, a solar installation and energy efficiency company based in Vernon.

Schneider started installing solar panels in 2013, a year after the state’s program that provided incentives for solar installation started. Since then, he’s hired 71 people, and opened offices in Oregon and Massachusetts.

He receives inquiries from a mix of customers. He says some customers are looking for ways to reduce their electric bill, while others want to be conscious about climate change.

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"You can't get much cleaner than that,” Schneider said of the solar panel technology. “The sun is making it and it's running your entire home."

But Schneider sees storm clouds on the horizon. He says changes to the system that benefits consumers who install solar are threatening installers like Earthlight.

Last year, the General Assembly approved and Gov. Dannel Malloy signed legislation that would phase out what’s known as “net metering.” Net metering is the formula, of sorts, that calculates how much power is generated by solar panels, how much the consumer sells it back to the provider or utility company for, and the way the energy credits will be stored.

In most cases with current residential solar customers, they have utility bills that are either in the single digits or very low, and are mainly paying maintenance and utility fees. Going to what’s known as a “tariff” based system would essentially cap how much a consumer could sell back the energy they generate for. Currently, the rates for solar-generated power increase over time, which those opposed to net metering describe as unsustainable.

"I feel like net metering is picking a big winner,” said Elin Katz, the consumer counsel for the state of Connecticut who acts as a watchdog for the utility industry on behalf of Connecticut residents. “But the net metering is also benefitting the solar installers at a very high level, too. Why are we picking them over offshore wind or battery storage or energy efficiency? Let's do things in a competitive manner which is how we started to do things in this state and then we can get things at a much more reasonable level.”

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Katz argues that net metering is close to becoming too much of a net loss proposition for utility companies, which by extension is a net-loss for ratepayers. She says if too many consumers install rooftop solar arrays, then that will lead to more people paying higher electricity prices as a result. Ratepayers without solar would have to pay more to maintain the grid, prevent blackouts and brownouts, and ensure the infrastructure is ready for major storms. She says those solar customers end up not contributing to the maintenance of the power supply.

"The pot of money is only so big and it all comes from you and I, the people who pay electric bills,” Katz said.

Net metering is set to phase out in the fall of 2019. And one place where Katz, the solar industry and major utilities like Eversource agree is that the fall is likely too soon for that to happen. It could create a shock to the utilities and the solar industry as a whole.

The battle over net metering has been playing out across the country, spurred by lobbying by traditional utilities. Arizona, Hawaii, Indiana, Maine, Michigan and Nevada all eliminated net metering — although Maine and Nevada reversed course and Michigan substituted a payment scheme different from a utility-proposed one.

In a statement, a spokesman for Eversource told NBC Connecticut, “We believe replacing net metering with a tariff-based system would be fairer to all of our customers. A delay in the phase out will also mean additional time to develop a program that is more transparent than the process currently in place.”

Tim Schneider favors a proposal in the Connecticut General Assembly that would delay the phase out until 2021, and would conduct a study to determine how much residential solar power would be too much until Connecticut consumers are adversely affected.

Katz, Connecticut’s consumer counsel, said she was unsure of the exact cost non-solar customers pay to subsidize those with solar panels.

Schneider fears that if there is not a change to net metering to allow it to continue the way it has, or at least in a similar form, then he predicts the most of the industry in Connecticut would close.

“You'll see the big guys gone in months and guys like us we're going to find something else to sell. We're going to go back to the efficiency side,” Schneider said of what would happen to Earthlight, which will install solar on about 200 homes in 2019. “(Electric vehicle) Chargers are coming up big time. We do some of that stuff. We'll keep busy. We won't have 70 employees though, we'll probably be down to 35.”

Katz says the new arrangement, the tariff system, is fairer for the rest of the ratepaying public. She remarks that anyone who rents can’t install solar on their residence and many homeowners don’t have it in their budgets.

Katz says the new policy is a way to keep it reachable for those who want to use net metering and to keep rates down for consumers.

“What if you were just getting a very good deal? Isn't that still something that would make it important and you would consider doing?"

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