Once upon a time, Louisiana had some of the best support for rooftop solar in the nation. The combination of a 50% state tax rebate and the federal Investment Tax Credit (ITC) on top of the foundation of retail-rate net metering made for some of the best economics for rooftop solar in the nation.
But Louisiana is also a state that is not known for its thriving democracy, with the oil, gas and utility sectors firmly in control of politics. Thus it is not surprising that the form of energy democracy that rooftop solar represents was on shaky ground. After the 50% tax credit was capped in 2015 and fully subscribed in 2016, installations fell sharply.
But what is far more important is that as a result of yesterday’s decision at the Louisiana Public Service Commission (LPSC), as of January 1, 2020, utility customers who are foolhardy enough to install solar will be paid a 12-month calculation of wholesale rates for the power they generate and export to the grid on an instantaneous basis, while buying power from the utility at retail.
This is a big departure from the monthly “netting” of import and export under retail-rate net metering and will greatly undermine the economics of rooftop solar for many customers.
The final vote at the LPSC yesterday to implement this policy was 3-2, with Commissioner Skrmetta (R) joined by two relatively recent additions to the LPSC: Craig Greene (R) and Mike Francis (R). The commission’s two Democrats, Lambert Boissiere III and Foster Campbell, both voted against the move.
The Alliance for Affordable Energy, which has advocated for renewable energy in the state for more than a decade, blasted the decision, with Executive Director Logan Atkinson putting this in the context of larger political problems in the state.
It is always stunning to see how hard communities and workers have to fight for what is right, while corporations are handed golden tickets in Louisiana. The unsupported canard of “subsidies” from net metering in Louisiana doesn’t remotely compare to the real subsidies ratepayers are paying to prop up uneconomic gas, coal, and nuclear plants owned by utilities.
As explored in a previous article, Skrmetta has been in conflict with the solar industry for many years, and may have pushed to remove net metering at this time to help to derail the solar industry from funding an opponent in 2020.
Solar installers roundly condemned the ruling, which they say could lead to layoffs in the state’s 3,000-strong solar workforce. Per Tom Neyhart, the CEO of PosiGen:
Today’s vote was a job killer and an insult to the people of our state, Instead of moving Louisiana forward, the Public Service Commission – fueled by the utility companies – moved Louisiana backwards.
Jeffrey Cantin, the president and owner of Solar Alternatives and a board member of the Gulf States Renewable Energy Industries Association (GSREIA), notes that while the new move puts Louisiana behind even neighboring Mississippi in terms of its compensation to owners of PV systems, that it will not end the state’s market.
Cantin says that this will hit the most energy-efficient homes the hardest, but that solar will still be viable for those that use the most power mid-day, including retirees and those with inefficient homes where the air conditioning is running 24/7. He notes that this move actually incentivizes those adding solar to use more power mid-day, when demand is already intense.
“This is going to make things worse for the grid,” Cantin told pv magazine.
There are still opportunities for home and business owners to get in under the old system of retail-rate net metering, but in order to do so they must have a fully installed system and have filed an interconnection application by the end of the year.