Indiana House passes bill to cut solar panel incentives

A bill that would eventually reduce the reimbursements solar panel users receive for the extra energy they generate passed the Indiana House on Tuesday.

Senate Bill 309, a controversial energy bill that addresses net metering, a billing mechanism that credits individuals who generate more solar power than they need and send it to the electric grid, passed 56-43 on the House floor. The bill has already passed the Senate.

Both sides of the issue clashed over the impact the bill would have on Indiana’s growing solar energy industry.

Utilities say the current Indiana system of compensation is unfair because it requires them to pay solar panel owners more than it costs the utilities to produce the same amount of energy on their own.

Currently, those who participate in net metering receive a retail price of roughly 11 cents per kilowatt-hour for the extra energy they generate.

The bill in its current form would lower that price to the wholesale rate of 3 cents per kilowatt-hour, plus a 25 percent premium.

The reduction would take place in five years, but current solar panel owners wouldn’t see the decrease for 30 years.

Author of the bill, Sen. Brandt Hershman, R-Buck Creek, said he came up with that amount by his own calculations after comparing it to what other states have done.

Rep. Carey Hamilton, D-Indianapolis, said that she favors policies that promote clean energy, but objects to the changes that affect net metering.

“I wish we could take the net-metering portions out of the bill, because I would love to support the rest of it,” Hamilton said. “This is not a bill I can support.”

The bill, among other provisions, requires the Indiana Utility Regulatory Commission to publish results of recent rate reviews and study the rates utilities charge for backup power.

Opponents argue that lowering the amount of credit they receive is unfair, and will all but eliminate the incentive to invest in solar energy in the future.

Hamilton argued that the task of determining rates should be left to the IURC—not the legislature.

“A random decision by one of our colleagues for a rate is not how we should be making important decisions,” she said.

Rep. Dave Ober, R-Albion, said he thinks the bill provides certainty in the energy market moving forward, adding that although unpopular, the legislation is decent policy.

However, Rep. Matt Pierce, D-Bloomington, who strongly opposed the bill, said it creates uncertainty for small businesses and Hoosiers investing in the solar industry.

“We had six hours of testimony, and the only people who were in favor of it were the utilities,” Pierce said. “All of the other four and a half, five hours of testimony were people saying, ‘Why are you doing this to me?’”

After listening to Hoosiers’ concerns about the reduced amount they would be credited for generating excess energy, Ober proposed an amendment last week that would bar utilities from seeking even lower reimbursement rates in the future from the IURC.