The state is required to adopt rules for a community solar program, and it's looking to Colorado and Minnesota for ideas
As their deadline approaches, policymakers are figuring out how to implement state-mandated community solar programs across Oregon.
But the challenge lies in connecting low-income ratepayers with solar power without raiding already starved energy assistance programs for the poor.
In 2016, lawmakers in Salem passed the energy-overhaul bill SB 1547. It requires Oregon phase out coal by 2035, and that 50 percent of energy used by Oregonians come from renewable resources by 2040. Currently, the state is about 15 percent renewable energy usage. (That does not include hydroelectric power, some of which fails to meet certain renewable standards.)
The bill also mandates the Oregon Public Utility Commission, the state agency responsible for regulating utility customer rates and services, to write and adopt rules for a community solar program by July 1. The idea is that such a program will help the state boost its use of solar power, which at last estimate two years ago, accounted for less than 1 percent of total energy sources in Oregon, according to the state’s Department of Energy.
The Public Utility Commission is still in the information-gathering phase of designing a community solar program, and it’s not yet clear exactly what it will look like, but it is expected to resemble other models, such as those in Colorado, Washington and Minnesota.
Generally, ratepayers on a power grid are invited to partially own or lease a solar power project. The solar panels could be placed on the property of one of the participants, incorporated into a new development, or even located on a property that isn’t affiliated with the project, such as on the roof of a big-box store.
That solar energy goes directly into the power grid, and then the utility company pays the ratepayers who funded the project for the use of the power it generated in the form of a credit on their electricity bill.
That size of the credit would depend on the amount of electricity generated and by the size of their contribution to the project, which can come in the form of an up-front investment or monthly payment, depending on how the commission decides to design the program.
Community solar is a viable option for people who want to expand solar infrastructure in their community, but who rent or live somewhere that isn’t ideal for solar panels, such as in a condo or beneath thick shade trees.
While solar power has a long-held reputation as being out of reach for lower-income ratepayers, Oregon lawmakers included in the bill a provision that requires 10 percent of the energy output to benefit those who cannot afford the start-up investment.
But what exactly that means and how to meet that requirement is up for debate.
The Public Utility Commission has held a series of workshops bringing together stakeholders including utility companies, developers and energy experts to discuss what the program should look like.
At the last workshop in this phase of planning, hosted by Portland General Electric on Feb. 14, the commission sought feedback from stakeholders on how to meet the low-income requirement.
It became clear during the workshop that this unfunded mandate poses serious challenges, and if it isn’t funded correctly, it could potentially cause more harm than good for low-income ratepayers.
One option for funding the bill credit is to reallocate existing state and federal funds that support energy assistance and weatherization programs across the state. Doing so, however, could mean kicking thousands of households off of energy assistance programs, and there is no guarantee the bill credit would be substantial.
For those who cannot afford to pay their electricity bill, there are federal and state-funded energy-assistance programs that help low-income ratepayers avoid getting their power shut off that could be used to fund the solar credit.
Because this winter has been unusually cold, “an unprecedented number of people are asking for help,” Margot Bryant told stakeholders at the workshop. She manages social equity policy at Portland General Electric, and said 49 percent of the customers receiving assistance on their electric bills through PGE are elderly.
Dan Elliot, a policy analyst for Oregon Housing and Community Services, said the state has two energy assistance funding options: the Low Income Home Energy Assistance Program (LIHEAP), funded with $35 million from the federal government annually, and Oregon Energy Assistance Program (OEAP). State funded at $20 million a year, OEAP offers more flexibility than the federal program. There are also a host of funds used for home weatherization.
Not only is the state facing across-the-board cuts of 10 percent with a looming $1.8 billion state budget deficit and uncertainty about future federal funding, but demand from new assistance recipients is also up statewide.
During this past fiscal year, OEAP prevented more than 47,000 energy disconnections, with 34 percent of the people asking for assistance being first-time energy subsidy recipients. That is up from just 12 percent the year before.
Elliot said he agrees with Bryant that programs are “over-subscribed with need, under-subscribed with funding.”
He said if the money to incentivize low-income participants in the community solar program came out of LIHEAP, then “7,500 households wouldn’t get assistance, but then an unknown amount would get solar panels.”
Households receiving energy assistance get about $380 taken off their utility bills annually.
“That $380 from LIHEAP?” Elliot said. “That’s food, that’s medicine.”
Among speakers and participants who were all brainstorming on how to pay for this requirement, there appeared to be consensus that the 10 percent for low-income ratepayers provision would not make much of an impact unless it was completely subsidized to the recipient.
There was also a consensus that kicking people off of energy assistance to meet the low-income solar requirement was not ideal, but neither were other ideas on the table.
For example: Developers in attendance said if they footed the bill by including solar projects in affordable-housing complexes and it ended up not economically viable, they just wouldn’t participate.
But the commission is looking to Colorado and Minnesota programs for ideas as they draw up their plans.
In Colorado, there is a requirement that 5 percent of the output benefit go to low-income ratepayers, but the state has hit road bumps trying to fulfill that goal and it’s unclear how beneficial it’s been to low-income ratepayers.
There’s a lot of uncertainty when it comes to solar. When we asked if it was safe to tell our readers that an upfront investment in solar would lead to long-term savings, Michael Breish, a senior utility analyst for the Oregon Public Utility Commission, replied: “It’s not safe to say that. There’s potential that it could, but that depends on a number of factors, including the resource value of solar (the bill credit utilities will pay participants), the cost to participate (which will vary with each project) and the cost of existing electric service. What is safe to say is that customers will be participating in and consuming renewable power.”
Oregon Department of Energy spokesperson Rachel Wray said that changes in the cost of solar will continue to influence the market.
“Commercial solar is now priced below $3 per watt, or about two-thirds less than cost-per-watt in 2006,” she said.
She also said that while solar continues to make up a small portion of the state’s energy mix, the state has added several commercial solar projects in recent years.
“We also are seeing proposals for utility-scale solar generation, with two projects under consideration for the Oregon Energy Facility Siting Council, which has jurisdiction for solar facilities above a certain threshold,” she said.
How to define low-income for participation in the subsidized portion of future community solar programs in Oregon is also still up for debate, along with how much and how often proof of income should be provided to utility companies. Some stakeholders argued that repeatedly vetting participants would be expensive, while others argued that someone who is no longer low-income should no longer get a credit.
Sherrie Pelsma, program director at Community Energy Project in Portland, argued that sometimes income can be hard to prove.
She said studies show many low-income ratepayers are more concerned about climate change than those in higher-income brackets, and they want to do what they can to mitigate its effects.
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For this reason, she said, it will be important that low-income participants feel like they are really engaging in the community solar project, not just checking a box for a subsidy. She said her agency will take the opportunity to teach its clients about solar energy when they connect them with the community solar resource.
If the community solar program is successful, it could also provide a real economic boost to Eastern Oregon, where the sun shines more frequently and many projects would likely be built, said Jaimes Valdez, a policy manager Northwest SEED.
“We need to see solar as a tool for empowerment,” he said during his presentation.
Stakeholders all seemed to agree – whatever the rules are, they need to be flexible because they will likely need to be adjusted.
But Breish reminded the room: “Once rules are in place, it’s hard to go back and fix them. And we have a time stamp on this – July.”
He said the Public Utility Commission is interested in hearing about innovative ideas on low-income inclusion from organizations that provide services to low-income Oregonians. It also wants to know if service providers have any concerns about how the program may roll out, as the commission wants to avoid negative, unintended consequences.
Additionally, it’s interested in hearing viewpoints from low-income ratepayers about why they might want to participate in a community solar program.
The commission is encouraging that comments be submitted before it releases a draft of its draft rules in March.
To provide feedback, ideas and comments at this stage in the planning process, email Michael Breish at michael.breish@state.or.us.
Once the draft rules are opened to public comment, there will be community outreach and more opportunities to give feedback through more formal channels.
Email staff reporter Emily Green at emily@streetroots.org; follow her on Twitter @GreenWrites
