Solar power advocates in state win small battle
PSC to allow third-party financing of systems
The Public Service Commission of Wisconsin on Thursday took a small step toward allowing third-party financing of rooftop solar systems in Wisconsin.
The 2-1 ruling allows a Stevens Point family to lease a solar power system for personal use from Amherstbased Northwind Solar. The regulators agreed the arrangement did not make Northwind a public utility. But the ruling was narrower than solar advocates had hoped for.
Whether such companies should be regulated as public utilities has been a thorny issue in Wisconsin, where previous attempts to clarify the legality of third-party financing arrangements have failed in the Legislature, the courts and before the commission.
Third-party financing is an arrangement in which the company that provides a solar array is paid by the property owner through either a lease of the equipment or purchase of the power the system generates, usually at a lower rate than what their electric utility charges.
Utilities oppose such arrangements. They argue that the solar companies would not be subject to the same oversight and consumer protections that they must follow.
Third-party financing is allowed in at least 28 states.
This year, two petitions asked the PSC to rule on its legality: One from the solar advocacy group Vote Solar on behalf of the Stevens Point family and another from the Midwest Renewable Energy Association that seeks statewide approval of third-party financing.
The PSC is expected to rule on that petition by the end of the year.
“We’re thrilled to see the commission make the right choice for this family, and hope the state will continue to build on this momentum by affirming that third-party financing is an option for all Wisconsinites,” Will Kenworthy, Midwest regional director at Vote Solar, said.
The utilities and their supporters claim a broad shift to third-party financed solar arrays would result in higher electric costs for the remaining customers who would have to take on a larger share of the fixed costs of electric power distribution.
Proponents argue that third-party financing would allow more property owners to benefit from lower-cost, carbon-free solar energy, including families and individuals who cannot qualify for bank financing.
The cases hinge on a 1911 court ruling that has guided decision making on utility regulation.
Vote Solar argued that contracts to lease a rooftop solar array or buy the power from one does not fall under the ruling’s definition of a public utility because the contract would be exclusive to the company and the property owner.
Commissioners Tyler Huebner and Rebecca Cameron Valcq agreed with that position in giving approval in the Stevens Point case.
Kenworthy said he was thrilled by those findings even though the commissioners did not act on Vote Solar’s request to authorize third-party arrangements statewide.
How broadly the ruling on Vote Solar’s petition can be applied to other projects in unclear, Kenworthy said.
“Installers will have to look at it and see what kind of comfort they get out from this,” he said.
The utilities argued a company with a collection of contracts to profit from the production of electricity should be regulated as a utility, even if each contract is limited to a single customer.