The financial incentive for installing solar panels would be all but phased out in the coming years under a bill (SB309) passed 39-9 on February 27 by the Indiana State Senate. The new legislation would discontinue net metering in the Hoosier State, effectively wiping out Indiana’s 12-year-old policy of allowing residential and commercial customers who generate their own electricity to ship any energy they don’t use to the grid and get a dollar-for-dollar credit from their utilities.
Solar panel owners who feed surplus energy to the power grid currently are compensated at a retail market rate of about 11 cents per kWh that they say helps them to break even and pay off their investments. However, regulated utility companies have complained that the rate of compensation customer-operators receive through net metering is more than it costs them to produce the same amount of energy. The utilities contend that, when customer-generators produce their own power, the cost of maintaining the grid doesn’t go down; it shifts to the rest of the customer base.
The Distributed Generation measure, introduced by State Senator. Brandt Hershman (R-District 7) would drastically reduce the rate of customer-generator compensation within five years. Under the proposed changes, customer-generators would not be able to retain and use the energy they produce. Instead, they would have to sell it back into the grid at a wholesale rate—now about 3 cents per kWh.
However, the legislation would grandfather in current solar panel owners for 30 years. Specifically, the measure provides “that a customer that installs a net metering facility on the customer’s premises before July 1, 2017, and that is participating in an electricity supplier’s net metering tariff on July 1, 2017, shall continue to be served under the terms and conditions of the net metering tariff until: (1) the customer no longer owns, occupies, or resides at the premises on which the net metering facility is located; or (2) July 1, 2047; whichever occurs earlier.”
The measure now goes to the House for consideration.