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Solar program reform efforts likely in the Connecticut legislature, but already face hurdles

Wilson Ring

John Elsesser has big plans for solar power in Coventry where he’s been town manager since 1988.

The roofs of all five schools in town are covered with panels acquired in 2015 through the state’s ratepayer-funded commercial solar program. There are panels on town hall and at the fire and police stations. But the panels on the schools didn’t provide enough power to cover the full electric loads. So three years ago Coventry applied for more.

Those panels would go at the high school on a stadium and as a solar canopy over a parking area like the kind the town already has over its police cars.

Three years later, Coventry is still waiting. Not for the solar panels. Coventry hasn’t even gotten that far. They’re just waiting to be considered – as are 70 other municipalities, state owned facilities and agriculture sector operations that are eligible for the state program Coventry applied to, known as Virtual Net Metering, or VNM.

They’re all in the queue. They don’t even know where.

“They won’t tell you,” Elsesser said.

Net metering is a longstanding way to compensate solar owners for excess power they put into the grid during certain times of the day. Virtual net metering is a way to credit that power to structures that are not connected directly to the system itself. Coventry has to use VNM because the new panels it wants to install would credit power to a number of school buildings to pick up the slack in the solar systems they already have.

VNM and the commercial program are among three solar programs in the state with caps that limit their use.

For as long as these programs have been in place – in some cases 10 years – those caps have frustrated not only applicants like Coventry, but also the state’s solar industry, environmental advocates and many lawmakers. Some of the caps have inched up, only to tap out almost immediately.

As this legislative session gets underway, a serious effort to raise or even eliminate the caps is emerging. But there is already disagreement over which program caps to alter, how they should be altered, and what, if any, other rules should be overhauled.

The legislative effort comes at a confusing time for all solar programs. As of January 1, the management of some programs has shifted; all newly installed solar systems will have new compensation structures; and a brand new power storage program – designed to work best with solar programs – is just kicking off.

For Coventry though, it’s simple – do something about the cap so they can get out of the line they’ve been in for three years.

“In the meantime we’re in never-never land of what should we do next?” Elsesser said. “We’re in a holding pattern.”

Which programs to change

Environmental advocates have been pushing to double the existing caps on two of the programs – neither of which is the one Coventry needs. They also want to remove certain size limitations on solar arrays.

But Rep. David Arconti, D-Danbury, co-chair of the energy and technology committee and the point-person on the committee’s priorities, wants to raise the cap on only one of the programs. It’s also not the one Coventry needs.

Arconti is focused on a program that would bring solar to residential units that can’t have it on their own roofs, by allowing them to get credit virtually from nearby large systems. This arrangement goes by several names: community solar, shared solar. Connecticut calls it shared clean energy facilities or SCEF (pronounced skeff). While single family homes can participate, it is targeted to multi-family and rental units, and is uniquely suited to low income residents.

“I think the community solar, SCEF program is the best one to try to tackle given the limited time we’re going to have,” he said, referring to the extremely short session. “I do plan on trying to raise a committee bill around SCEF increasing the caps, allowing credits to roll over.”

A rollover means that any unused portion of the program could move into subsequent years.

The adoption of SCEF has been a legislative battle royale since it was first proposed in 2014 as a pilot project. Many legislators argued there were multiple community solar programs around the country to use as models, so there was no need for a pilot.

It took until 2018 to authorize a full, but capped, program. Since then the Public Utilities Regulatory Authority has levied fines against the utilities for moving too slowly on getting it running. Bottom line: there is only one community solar program operating in the state. It’s in Bloomfield and actually was part of the original pilot.

Arconti said his attention to SCEF is to help environmental justice communities reap the benefits of clean energy projects. “I think the SCEF program checks off a lot of those boxes and you’d get the biggest bang for the buck.”

Advocates would welcome any bang at this point and SCEF is one of the two they are targeting for the higher caps.

“SCEF is an equity tool,” said Mark Scully, executive director of People’s Action for Clean Energy, PACE, the environmental advocacy group helping to lead the effort on solar initiatives. “We should be willing to invest a little bit in equity. Right?”

PACE is also pushing to raise the cap on the commercial solar program, now in its 10th year. Data collected over the duration show that only about one-third of the projects that have applied for funding in what is essentially a reverse auction – low prices win – have gotten it.

“We miss tons of it,” said Tim Schneider of Earthlight Solar. “You get a project, you get a customer interested; you do all your interconnection paperwork and you submit for an incentive. It’s like once a year you get to bid into this and then you miss the bid. The small business you’re working with gets screwed because he can’t do solar. And it goes on to the next year, and to the next year. It’s a screwed up system.”

He and many others perpetually point to the Massachusetts solar program, which provides for much larger program capacity in terms of how much power they can produce and is not limited to one application period a year. Data in PURA’s first-ever Clean and Renewable Energy Report, now in draft form, show Massachusetts with nearly twice the installed solar as Connecticut as of the end of last year. And it projects that Connecticut will lag the region even further five years from now.

Size matters

Schneider and advocates are also pushing to change the current size rules for commercial solar systems. Currently they can’t be larger than the power needed for the building they’re on. In the case of something like a huge warehouse with a ton of roof space but small power needs, much, if not most of the roof could go unused.

Schneider, Scully and others would like to see changes that allow full build outs of solar in cases like that, with ways to use the power elsewhere, something that the VNM program already requires for government and farm structures.

They say such changes would help keep solar arrays off farmland and other natural landscapes and open spaces that are often targeted for solar. Such siting is often fought by local residents and can wind up in long court battles that slow down and sometimes derail projects. Revamping the programs would also help the state buy less renewable power from out-of-state sources – in turn keeping dollars in Connecticut and increasing grid resilience.

Scully is also pushing for some way to incentivize the conversion of parking areas into solar fields by putting panels over them – the same kind of solar canopies Coventry is hoping to use more of.

“These projects face fewer siting challenges and can be deployed quickly and with much less risk,” Scully said of any solar project placed on already-developed space, whether it’s a rooftop or a parking lot.

Anticipating pushback among legislators that such programs would cost ratepayers more, he told the annual pre-session environmental summit last month that an average ratepayer would face about 15 cents more per month. For community solar, the cost would be an additional two cents a month. That calculation didn’t factor in indirect social benefits such as lower health care costs that can result from cleaner air.

“These costs pale in comparison with the many benefits of commercial and community solar,” he told the gathering. “We estimate that Connecticut could site seven gigawatts of commercial solar on 8,400 canopies, essentially parking lots, across the state generating 37% of our current electricity needs.”

Nothing for VNM

So far neither the committee nor environmental advocates are making the case to do something about the VNM situation. Right now the number of applicants on the waiting list equals all the projects that have come through in its entire existence, according to data provided in the PURA draft report.

The Connecticut Council of Municipalities and the Connecticut Council of Small Towns have taken up the VNM cause, arguing that it’s part of towns’ larger efforts to reduce energy costs.

“From the towns’ standpoint, virtual net metering’s a win-win because they can save thousands of dollars each year in energy costs and, at the same time, they’re promoting the use of clean, renewable energy. So there’s a huge benefit to the towns and their communities,” said Betsy Gara, executive director of COST.

Donna Hamzy Carroccia, advocacy manager at CCM, said, while clearly there’s demand, she doesn’t think change will come unless the Department of Energy and Environmental Protection makes it a priority.

“It’s just really frustrating when our towns are looking to help support the identified goals of the state, with regard to solar and renewables,” she said. “I think where we fall short is – is it really a priority, or is it not a priority?”

The bigger picture

Hamzy Carroccia won’t get much of an answer from DEEP’s commissioner, Katie Dykes, who said she wasn’t going to comment on changes to the solar caps until she knew specifically what the energy committee was proposing. But she did offer that SCEF “provides a more direct flow that benefits directly back to low income customers.”

The utilities, which administer many of these programs and whose operations have to accommodate and technically support them, are similarly silent. Eversource said it would be premature to comment without specific language and Avangrid did not respond at all.

But Marissa Gillett, PURA’s chairman, who has spent her nearly three years on the job setting up regulatory structures aimed at modernizing Connecticut’s electric grid through programs like these, is much less reticent.

“Are the caps limiting?” she asked. “I think there’s obvious anecdotal evidence that they are.”

What she hopes she’s been able to do so far is update programs and set new ones in motion that are flexible enough to handle changes in components – like the caps. She also believes the programs are coordinated to achieve the big picture goals – more reliability on the grid and reasonable costs while addressing climate change. One example is getting more carbon-free solar power in place.

To that end, she said she’s often told legislators they can tell her the results they want and PURA can design a program around that.

“There are lots of ways that they can send us a signal without being as prescriptive as a hardline cap,” she said.

All this comes as Connecticut is pivoting on several initiatives that address the causes of climate change through the power sector. On January 1, the management of the wildly popular residential solar program shifted from the Green Bank – which created it and ran it for 10 years – to the utilities. It is now called the Residential Renewable Energy Solutions Program.

It also transitioned to a new financial model. It used to only offer net metering, compensating solar owners for power put back into the grid through a simple math process – what a home uses minus what it sells – paid at the retail rate of electricity. Now it – along with all the other solar programs – mainly uses what’s known as a tariff system.

A tariff is a highly confusing term to describe the fixed price solar owners are credited for the power they sell to the grid for a specific period of time – in this case – 20 years.

Also on January 1, the Green Bank implemented a new power storage program.

Ideally solar and storage should dovetail, and the two should work together with grid operations to bolster reliability by dispatching or storing excess power for use when it’s needed.

To do that, you need advanced metering infrastructure – AMI – also known as smart meters. For the most part, Connecticut doesn’t have them. Avangrid is moving ahead with them in its territory. Eversource hasn’t yet, though under orders from Gillett at PURA, it is devising plans for them.

Getting creative

A broader question bubbling up is whether the piecemeal changes, the impending fight over solar caps and the state’s struggle to meet its climate change benchmarks beg for a coordinated overhaul of Connecticut’s strategies for renewable and clean energy. And to really update solar programs, does the state need the kind of creativity that some – including Gillett – think has been missing?

“I do think we’re suffering from a lack of creativity, just generally, and it’s been kind of hard to draw that out,” she said.

But she also said, as did others, that while having smart meters in place first is ideal, the state should not stop programs to wait for them. “The systems are reasonably future-proofed and have value now even absent pairing with the smart meters,” she said, while noting that rate design and programs like electric vehicle charging will be better with smart meters in place.

“Would they be better with AMI? Absolutely,” she said.

Gillett, Commissioner Dykes and others point to federal infrastructure money as a potential way to pay for smart meters – which are expensive – without overburdening ratepayers.

“This technology is foundational to a modernized grid,” Dykes said.

Rep. Jonathan Steinberg, D-Westport, who has served on the energy and technology committee for a decade, is all for trying to get the feds to pay for smart meter deployment, but he pointed out it’s not the silver bullet for addressing Connecticut’s lag on clean energy – an area in which the state once led the nation.

The state is now losing ground on its mandates for lowering greenhouse gas emissions and risks missing Gov. Ned Lamont’s goal of a carbon-free electric grid by 2040. All this while anticipating an increased need for electricity as more residents transition to electricity for home heating and electric vehicles.

“Talk about falling behind. You know, it’s not simply a matter of bringing the grid up to the 21st century – it’s that we should be preparing for the future,” Steinberg said. “I think you’ve got to move on all fronts because we’re so far behind on all fronts.”

He said the grid modernization work Gillett has done should become the blueprint for devising a clean energy strategy for the state. “It lays out the map…she’s put out things that could keep us going for 20 years,” he said.

There are already a few creative ideas being floated. PACE’s Scully pointed to those empty commercial rooftops and suggested plastering them with solar. The owner would sell all of the power and buy back only what he needs. “It could be shared solar,” Scully said.

“We need to just push on all fronts,” said Ken Gillingham, who specializes in environmental and energy economics at Yale and was the senior economist for energy and the environment at the White House Council of Economic Advisers during the Obama administration. He thinks solar canopies tend to be an expensive option, but if that’s what’s available – go for it.

“One way forward is to say, ‘okay, if you add in storage, along with the solar you’re exempt from the cap,’” he said. Another concept is to allow development of microgrids on unused roof space, with storage that can be dispatched to the grid during peak times or when the grid would otherwise need to run dirtier power, such as on very cold days. “That’s, to me, a very promising way forward,” he said.

“Climate change solutions aren’t either-or, we’ve got to do all of it,” said Dykes, as she often does. “And you don’t wait to see how one solution works to then start trying on the next.” The state needs multiple programs running at once and the ability to tweak and adjust them if there are problems or new technologies.

For John Elsesser, back in Coventry, the reason for getting that VNM queue moving is that it will reduce costs and help everyone in his town.

“I don’t know why it’s so complicated,” he said. “We understand macroeconomics, and we’re just a small player. All we can do is try to say we think it’s the right thing to do and sometimes we should do the right thing just because it’s the right thing.”

Launched in 2010, The Connecticut Mirror specializes in in-depth news and reporting on public policy, government and politics. CT Mirror is nonprofit, non-partisan, and digital only.