At their Chicago meeting in 2013, ALEC adopted the goal of discouraging the spread of renewable energy. Their plan to do this was by weakening renewable portfolio standards (RPS), by claiming that it would make electric rates go up, and by promoting the idea that those who install their own solar panels were “free riders” who did not pay their fair share of infrastructure costs. All untrue, but a number of states have adopted measures along those lines.
Lawmakers in Indiana have introduced a new measure that could wipe out the state’s net metering system within a decade and squash the state’s burgeoning solar energy sector. Under this proposed bill, rooftop solar owners would be forced to sell their electricity to the utility at a lower rate and buy it back at a higher rate. According to PV-Tech, solar consumers would have to sell their energy to the utility at wholesale rate of around US$0.03/kWh and then buy it back at the higher retail rate of around US$0.11/kWh.
This would essentially make it uneconomical to install solar panels. Though the company claims that those with solar panels are not paying their fair share of distribution costs, there has been credible research which establishes that there is a net benefit to all electric customers in states where net energy metering has been encouraged. A study by Crossborder Energy in 2014 found NEM allows utilities to avoid costs of generation and fuel, maintenance and upgrade of transmission and distribution infrastructure, transmission losses (which account to 7% of losses), capacity purchases, and compliance with renewable energy standards. The study concluded,” The cost which utilities avoid when they accept NEM power exported to their grid shows that NEM does not produce a cost to nonparticipating ratepayers; instead it creates a small net benefit on average across the residential markets.” While it does cause power companies to have to adjust their loads accordingly, NEM reduces peak loads, transmission losses, and the need for new power plants. In California, the study found NEM “delivers more than $92 million in annual benefits to non-solar customers”.
So, what is Indiana thinking?