SolarCity Corp (NASDAQ:SCTY) may have a case of déjà vu. This time, it could be in the state of Maine. The Pine Tree State has proposed ending its solar net metering program. The governor wants to implement a three-year grandfather period to help solar residents in Maine recover their investments.
SolarCity Corp May Have to Lobby in Maine
One state wants to fully adopt solar power. Another state wants to gradually veer away from it. When this happens, solar firms across the U.S. are negatively impacted. That is what’s happening to SolarCity, the giant Elon Musk-backed solar firm.
After going through a series of confrontations with the state of Nevada, SolarCity may now have to do battle with the state of Maine. The state government is looking at a proposal to end its net metering program.
Maine Republican Governor Paul LePage is recommending a three-year grandfather program. This would allow Maine residents with solar panels to regain some of their upfront investments from net metering. Once the three years are up then the program would come to an end.
At the present time, residential solar producers receive a credit on their electric bill for the extra energy they give back to the power grid. As time goes by, those credits help pay for the upfront costs of solar panels. With more homes embracing solar, the program has been lambasted. Critics say non-solar users have to pay an unfair share of maintaining the electric grid.
LePage thinks the best solution is to abolish net metering entirely. The governor’s office would prefer a more market-based solution to the energy issue. Patrick Woodcock, head of the governor’s energy office, submitted the new proposal to officials at the Maine Public Utilities Commission last week.
“And what the three-years is trying to do is they will receive, effectively, the retail price of electricity and move forward with a new compensation system,” Woodcock said. “They would be able to receive the renewable energy credits that have a huge value – they are currently not receiving that.”
The solar industry and solar users are not happy with the governor’s proposal.
Advocates of solar power say the governor’s idea would harm net metering’s future and hurt the industry. Some have referred to LePage’s actions as “a crock of lies and misperceptions and misinformation.” Others say LePage is being short-sighted and is overlooking the benefits of local solar power creation.
Without further debate and consensus, net metering users want it to stay in place until the legislature can agree on the matter.
“The governor’s entire position is predicated on the idea that solar is too expensive. The opposite is true. Solar is saving ratepayers, it’s lowering their energy use, it’s reducing carbon emissions, it’s creating high-quality jobs,” said Steve Hinchman, the chief financial officer at Portland-based solar contractor ReVision energy.
It remains unclear how much of a footprint SolarCity has made in Maine. Rhode Island recently signed legislation that would benefit the likes of SolarCity. The solar firm has pledged to expand operations in Rhode Island.
SolarCity Corp’s Fight in Nevada
Earlier this year, the Nevada government approved ending net metering. The Public Utilities Commission (PUC) argued that solar panel users would be paid for their energy at lower, wholesale rates instead of higher, retail rates. Later, NV Energy was ordered to boost the monthly service charge for solar users.
According to state officials, net metering rules were changed because non-solar panel users were subsidizing homes with solar panels. This, they deemed, was completely unfair.
The move created quite the firestorm across the state. This prompted SolarCity to throw a fit. Soon after the decision was made, the solar firm exited the state and slashed 550 jobs. CEO Lyndon Rive also entered into a war of words with Governor Brian Sandoval, calling him “ignorant.”
Governor Sandoval defended the move, noting that the state has been very friendly to SolarCity. He alluded to all of the public money that had been granted to the solar firm.
Since then, Musk has been trying to calm things by down by initiating heavy lobbying endeavors. Nevada will hold a referendum as to whether or not it should bring back the original net metering rules.