Maine appears poised to replace its net-energy metering (NEM) program with new legislation that is projected to increase the state’s solar photovoltaics (PV) penetration by over 12 times the current installed capacity by 2022. The legislation has the support of a broad coalition of consumer advocates, utilities, solar installers and environmental advocates, by contrast to the contentious and divisive NEM battles in states like California, Nevada and Arizona. (One prominent solar advocate, The Alliance for Solar Choice, has stated that the current NEM program should be kept in place until the new policy demonstrates that it will support solar growth.)
The move comes as Central Maine Power, the state’s largest utility, is nearing the 1 MW cap on NEM, and as the state has undertaken the ambitious effort to determine the proper value of solar. A study conducted last year found that the value of solar might be as high as $0.33 per kWh, whereas under the current NEM framework, customers with rooftop solar who export energy to the grid are paid the retail rate of $0.13 per kWh.
The new legislation provides that Maine utilities will enter into long term contracts for a total of 248 MW over the next five years, divided between four market segments: residential and small business, community solar gardens, large commercial and industrial, and grid scale projects (up to 5 MW). Nearly all of Maine’s 20 MW of solar PV is currently sited at residential and small business customers, and under the new legislation, that capacity could increase to 118 MW, or 47% of the market. Community solar could increase to 45 MW, or 19% of the market, large commercial and industrial could increase to 25 MW, or 10% of the market, and grid scale could increase to 60 MW, or 24% of the market.
Contract terms will vary based on the market segment. For example, residential and small business customers can either sell the entire output of their system to the utility or use the generation to offset their consumption and sell any excess generation. Unlike NEM, where the price per kWh varies over time, the price per kWh under the new legislation is set by the Maine Public Utilities Commission (PUC) in order to meet installation targets, subject to an overall cap on the cost of the program. The price is expected to step down as installation grows.
Existing NEM customers can continue under that program for 12 years, but NEM is not available to new customers once the program goes into effect. The Maine PUC will review the program after 18 months or 21 MW of installed capacity, whichever comes first.