The scramble for solar is on! Hundreds go solar as discount program fizzles in Indiana

There's a run to the sun across Indiana with an important deadline approaching for a new law that tipped the balance of solar power toward big utilities.

From Jeffersonville to South Bend, hundreds of solar enthusiasts are putting thousands of solar panels on their roofs by the end of the year. That way, they can get the most out of Indiana's so-called net-metering rules that determine how much money utilities must pay for any extra electricity their customers produce.

In Southern Indiana, a new Solarize the Sunny Side effort has been underway, playing on the nickname for Louisville's neighbors to the north.

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Organizers have held several public meetings and have gathered 10 letters of intent from customers who want to go solar. They are looking for as many as 14 other more to make a shared bid to get reduced prices in what could be called an informal buyers club.

"Many of us are doing this to offset our carbon emissions" out of concerns about climate change, said Rick Lovett, who has been holding public meetings with Trisha Tull, another Hoosier solar advocate. "But at this point, (solar) makes sense in terms of dollars and cents."

Jeffersonville's First Presbyterian Church, which recently added a second collection of solar panels, expects to reduce electricity bills by as much as $7,000 per year, said Tull, who is on the church's green team. In a symbolic transition, the operating equipment for the system is in a basement room where a boiler once burned coal, a leading cause of heat-trapping gases.

Both Lovett and Tull warn of an earlier Oct. 19 paperwork submittal deadline for Duke Energy customers that also must be met. "It's a shrinking opportunity," he said.

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Deadlines aside, Louisville advocates are closely watching how their counterparts in Indiana are successfully rallying potential new solar customers.

"The Solarize the Sunny Side model looks entirely doable," said Wallace McMullen, chair of Solar Over Louisville, a project started by the Louisville Sustainability Council.

Businesses slammed

The Indiana rush for people to generate some or all of their electricity is straining a small but growing business sector. The state ranks 21st nationally for solar capacity, producing enough electricity to power 30,000 homes, according to the latest report from the Solar Energy Industries Association.

That compares to Kentucky's ranking of 41st, with solar powering 2,177 homes, SEIA says.

"We are adding new teams and new labor, but the rush we are seeing in Indiana is outpacing the industry, completely, at the moment," said Steve Rickets, co-owner and general manager of Solar Energy Solutions, which recently completed 40 residential installations in Bloomington. The company has offices in Louisville, Evansville, Cincinnati and Lexington.

Solarize Bloomington has been so successful that it's overwhelmed a different contractor hired to do work there, so only about 10 percent of some 240 new jobs will meet the deadline, said Anne Hedin, who is active with Solar Indiana Renewable Energy Network, which she said launched the buyers' club model last year.

Still, she said, those who install next year will get "a pretty good deal."

Across Indiana, Rickets estimated that "hundreds and hundreds" of new systems have been installed in 2017, adding many thousands of new solar panels.

"We've received more than double the number of net metering requests so far in 2017 compared to 2016," said Angeline Protogere, a spokeswoman for Duke Energy.

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The impetus is that new net metering law, which was supported by utilities but opposed by solar power advocates. It cuts back over time the rate that investor-owned utilities pay their customers who install solar for their extra electricity.

A separate political push to reduce net metering benefits in Kentucky failed earlier this year despite its backing in the General Assembly by utilities who have been seeking to recover more of their fixed costs not covered by fees on electricity use.

In Indiana, rural electric co-ops are not covered by the same rules but offer their own policies for buying back electricity from customers, said Mandy Barth, spokeswoman for Indiana Electric Cooperatives.

But customers of regulated, investor-owned utilities with solar installations who have operating systems by the end of 2017 will get the current rate - essentially what utilities charge retail customers - for 30 years.

That time-span for the maximum net-metering benefit drops to 15 years for Indiana customers who install solar next year, sliding a bit further each year until July 1, 2022, when net metering goes away.

It is to be replaced by a new system that requires these utilities to buy their customers' solar power at much lower prices - at just 25 percent above the wholesale rate.

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Wholesale rates can be three times less than retail rates, so a reduction to, at or near wholesale rates "adds up to a small fortune" over time, said Jeremy Coxon, owner of SunWind Power Systems in Floyds Knobs.

For new systems that can cost thousands of dollars to install but can now pay for themselves in 10 or 12 years, that could add several more years before customers break even, said Madi Hirschland with the Hoosier Solar Initiative, which has been organizing "solarize" events in Indiana.

That would make solar power less financially attractive

Coxon said he's worried that the Indiana solar market is "all but dead" because of the dimming of solar policies for the big utilities and because rural coop policies that are often similar. Instead, he said he expects to see more solar projects utilities are building for themselves with greater costs for their customers.

"Each of Indiana’s electric cooperatives has a locally-elected board of directors who have the autonomy and authority to set net metering or net billing policies that best meet the needs of their local membership," Barth said.

A 30 percent federal tax credit for residential solar will continue through 2019 unless Congress takes that away.

Subsidies questioned

Sen. Jim Merritt, R-Indianapolis, co-authored the net metering law, and said it was passed in part to correct what he called an imbalance.

"It seemed we were getting a little out of wack on the subsidies of solar at the expense of the regular use of electricity," he said. He said he believes solar will continue to grow even with less generous pricing policies to customers as the cost of solar systems drop.

Solar prices have declined 64 percent in Indiana and Kentucky over the last five years, according to SEIA.

"People who have solar systems on rooftops tend to be wealthier, said Mark T. Maassel, president of the Indiana Energy Association, which represents investor-owned utilities. "You end up with the poor subsidizing the rich."

Solar advocates took issue with that characterization, and Hirschland said she hopes future lawmakers will find revisit net metering within the next five years.

"We are very confident that rule will change," she said.

Meanwhile, she said she's pleased so many people are lining up for solar in Indiana as costs are coming down and solar panels are getting more efficient.

The statewide push is also making it easier and cheaper to purchase solar power systems by helping people cut through barriers, Hirshland said.

"We find that people are very hungry to go solar," she said. "But it's hard to know what's a good price, or what's good quality."

The model they use that's been successful has teams of experts working as go-betweens for solar installers and potential customers, removing some of the mystery cutting better deals with installers, she said.

"They get a better deal because you are getting rid of the promotion and marketing costs, and it turns out those are quite high," she added.

Reach reporter James Bruggers at 502-582-4645 and at jbruggers@courier-journal.com.

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