INDIANA IN-DEPTH: Solar advocates believe industry will overcome net metering changes
GOSHEN — The slowing gain of jobs in the Indiana solar power industry is being viewed as a one-time occurrence for a segment of the economy that has been thriving.
One of the industry’s advocacy organizations, The Solar Foundation based in Washington, D.C., reported March 28 that Indiana had 2,775 jobs tied to the solar power industry in 2017. That total was just 75 more jobs than 2016’s total. The gain was also a fraction of the 1,133 new jobs that flowed into the industry from 2015 to 2016.
Even with the slowing job growth, Indiana bucked the national trend of solar industry job losses. The foundation reported there were 9,806 fewer solar industry jobs nationwide in 2017 than in 2016. Yet, there were still 250,271 jobs tied to nation’s solar industry in 2017, a significant gain over 208,859 jobs in 2015.
So why the one-year glitch?
“We are really looking at three reasons,” said Ed Gilliland, senior director at the foundation.
First, a large amount of solar installations started in 2015 but were not completed until 2016, which boosted the need for workers.
Second, uncertainty over solar power policies in some states, including California, the largest consumer of solar power.
And third, concerns about 30-percent tariffs on imported solar panels, which President Donald Trump announced as reality in January of this year.
“These are the several factors that turned the market from its rapid growth to the 3.8 percent decline,” Gilliland explained.
INDIANA RATE CHANGE
In 2017, the Indiana General Assembly passed Senate Bill 309, which started the clock ticking toward a reduction in the rates paid by utility companies through net metering in Indiana. Net metering is the process by which homeowners and businesses sell excess electricity from their solar or wind-powered energy systems at retail rates to utility companies and obtain credits in return.
A May 3, 2017 article in the Fort Wayne Journal Gazette stated Senate Bill 309 provides that those who install solar or wind systems during the next five years will receive the full retail rate for up to 15 years. After 2022, small-scale producers will receive a lower wholesale rate and a 25 percent premium.
According to Leah Thill of the South Bend-based regional planning agency Michiana Council of Governments for northern Indiana, owners of solar systems will receive net metering credits from utilities until July 1, 2032 if the systems are installed before July 1, 2022. But Senate Bill 309 means that the payback period for such systems is shrinking as time moves forward.
The return on investment for solar systems ranges from 9 to 14 years, Thill estimated.
As environmental planner for MACOG, Thill helped create teams of solar power advocates in South Bend and Goshen. That effort resulted in 97 new solar projects, she said. Most of those installations occurred in 2017 after Senate Bill 309 was approved and 21 of those installations are expected to occur this year.
Even with the dwindling net metering payback looming, Thill said many people were willing to install their personal solar power system because of the economics involved.
“There was a lot of interest in solar, but many people didn’t realize how much the cost had fallen in the last seven years,” she said.
The cost of solar panel installations has fallen 60 to 70 percent in Indiana during those years, according to Thill, and at the same time the efficiency of solar panels has increased.
“So you can produce more energy out of a smaller area of solar panels and you can do it more efficiently at a lower cost,” she said.
Northern Indiana Public Service Co. was one of the state’s utility companies that supported the net-metering change.
“NIPSCO supported the Senate bill to develop a legal framework around the size and price of net-metering and to develop certainty around the future of net-metering policy,” said NIPSCO spokesperson Denise Rodriguez. “The bill also worked to balance the interests of non-participating customers who subsidize the cost of those who do participate.”
So far this year, applications for joining the company’s net-meter program are ahead of the past two first quarters, Rodriguez said.
“There has been a decrease in the number of applications as compared to the fourth quarter of 2017; however, there have been more applications received in the last three months than in the first quarter of 2015, 2016 or 2017,” she said.
In addition to the net-metering, which gives credit to energy producers, Rodriguez said, “We offer a Feed-in Tariff (FIT) program that buys back the amount of energy in the form a check to customers. Today, we have about 270 customers participating in those two programs (150 net metering, 120 FIT) out of nearly 460,000 total electric customers.”
The total net metering generation equates to 0.33 percent of the company’s generating capacity based on 2017’s total system peak demand, she added.