If you are puzzled by the solar infrastructure spreading across the landscape these days, you are certainly not alone. Former hay fields and other treeless areas are populated virtually overnight with legions of metal figures in battle formation – poised, perhaps, for the assault on climate change – but in the meantime, no one seems to be providing the drive-by observer much practical information about what’s going on.
First of all, some of the larger installations popping up are simply industrial scale solar power to be fed into the regional power grid, being developed in response to demand for renewable energy. The falling costs of solar are making it competitive, period.
But also significantly, in June of 2019 Governor Mills signed several bipartisan bills into law (LD1711, LD1430 and LD1494) making major changes to how Mainers can get their electricity from solar power (photovoltaics or PVs). These changes incentivize solar power development for not only homeowners who want photovoltaics on their roof or in their yard, but also for medium-scale solar electricity generation in the form of solar farms.
For the home photovoltaics owner, a very important change was the reinstatement of “net energy billing,” whereby a producer of solar electricity will only pay for the net amount of energy they use on a monthly basis: If they produce more than they use, they get a credit that can be used over the next twelve months. If they use more than they produce, they pay only for the net usage or cover it with credits from previous months.
This has been an important incentive for installation of photovoltaics. The gross metering model that would otherwise have taken effect would have compensated homeowners for solar power that they put onto the grid at wholesale rates, while usage would be charged at retail rates – not a great deal!
But other solar game-changing legislation has been responsible for the explosion in much of the larger-scale solar development. If you don’t want to wrestle with installing solar on your property, you can now buy into a solar farm (“owner” model) or subscribe to an electric supply (“renter” model).
Before LD 1711 solar farms were limited to 9 owners and to 1 megawatt in capacity. The new law has no limit on the number of owners and ups the power limit to 5 MW. A single solar farm at that scale could power over 500 homes, or numbers of other establishments like schools, municipal buildings, or basically any electricity user.
With the renter model the solar farm is built, owned, and operated by a third party. This third party can sell you electricity under the net metering rule. According to some of these suppliers this can result in rates as much as 15% lower than the current “standard offer.” The subscription works on a month-to-month basis so that you are under no long-term obligation to the supplier.
The ownership model is a bit more involved. A solar installation company will look for investors into a community solar farm. If you invest, you are buying a certain percentage of the farm. Essentially you are buying the capacity to generate power as though you were putting it on your own rooftop.
This ownership model does take a substantial capital investment. For example if your current bills average $100 and you want to cover your entire usage with solar energy your investment might be around $18,000. (There is federal tax credit of 26% which is being reduced to 22% in 2021. This 22% would reduce the cost to around $14,250.) In addition, to cover maintenance, insurance, land leases and other related costs there would be dues of around $150 per year ($12.50/month.)
While this may seem pricey, the advantage is that you will have reduced your electricity supply bill almost to zero. The payback time on this investment is about 14 years. Today’s solar panels are expected to generate power for well over twenty years, so there is a net financial benefit. There are also ways to finance the investment so that your monthly payment is less than the electricity bill that you are no longer paying.
By the way, the location of the solar farm is not important as long as it is the same area as your supplier. So if you are in the CMP supply area any solar farm in the CMP area will do.
It is often noted that it’s difficult for people of lesser means to hop on the solar bandwagon – “It’s easy to be green IF you can afford it!” While there was some truth to this in the past, the subscription approach to community solar provides access to virtually anyone who has been paying an electric bill. And as the cost of photovoltaics has dropped 75% over the past 15 years, more and more middle income Mainers are installing PVs at their homes. Community solar can make it even more affordable due to economies of scale and better panel siting.
Additionally, the growing contribution to the electricity supply by the proliferating solar farms has a net benefit on all ratepayers by increasing the stability of the grid and putting power on the grid when the demand is high and the energy is more valuable.
The solar landscape is looking better every day – why not jump on the bandwagon? We just did!
Paul Stancioff, PhD., is a professor of Physics at the University of Maine Farmington who studies energy economics on the side. He can be reached at [email protected] Cynthia Stancioff is an amateur naturalist who likes to write. Previous columns can be found at https://paulandcynthiaenergymatters.blogspot.com/
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