State law prohibits Shawano solar farm
Bills to allow private installations are stalled
Bonnie and Rick Beyer are at the point in their lives where they’re thinking about the future of their Shawano farm.
They both have jobs off the farm and aren’t actively working the land. Some of their 115 acres of land is leased to a neighbor and some is in a conservation program. That brings in income, but as they approach their 60s they’ve been thinking about supplementing it with solar energy.
They don’t want to sell to a utilityscale developer, a company that would potentially buy or lease the entire property, and they think they’ve found a solution: hosting a smaller communityowned solar installation.
They’ve signed a lease option for up to 30 acres with Dimensions Renewable Energy, a community solar developer based in Atlanta, which would build a solar farm and sell subscriptions to the couple’s neighbors and the broader community, helping them to reduce their electric bills.
Bonnie Beyer said it would be a way to earn some additional income, preserve the land for future farm use at the end of the solar farm’s working life, and participate in the clean energy movement without the disruption to rural communities that often follows largescale solar projects.
“Change is going to be coming no matter what and we just like to help out our community. It’s a greener way,” Bonnie Beyer said.
However, the option they’ve signed with Dimensions is as far as they can go for now. They signed on with the company with the hope that bills introduced in March would change a state law that prohibits such arrangements for any entity other than a regulated utility, but the bills authorizing thirdparty ownership and operation of community solar installations have been stuck in committee with no clear prospects for legislative action.
What are community solar energy projects?
It’s pretty much what it sounds like: A community-financed solar installation.
How it works begins with a developer and landowner reaching a lease agreement for the installation. That provides income for the landowner and allows the developer to begin selling subscriptions for a share of the energy produced by the array to other people within the territory of the electric utility that serves the area.
The utility is the actual buyer of the electricity. Subscribers benefit by
getting a credit on the bill for the share of the energy they “own” and being able to say they’re participating in the transition to renewable energy.
Community solar installations are smaller than the massive arrays that have been developed by utilities in Wisconsin. They typically are 5 megawatts or less and are built around one large customer with the remaining power offered to individuals, businesses, community organizations and others.
Advocates say community solar would make renewable energy accessible for people who rent or live in condominiums and homeowners, businesses and other organizations that aren’t able to install a rooftop solar array or can’t afford one.
Why isn’t community solar allowed in Wisconsin?
It actually is, but the only companies that can develop it and sell subscriptions under state law are regulated investorowned utilities and cooperatives, and it hasn’t seen widespread development.
Alliant Energy and some of the state’s cooperative utilities have developed community solar projects, and others offer subscriptions to larger utility-scale solar installations.
AMadison company, SolarShare Wisconsin Co-op, has found a way to offer something similar to community solar by offering shares of the company and paying a 5% dividend to its shareholders. SolarShare sells electricity from its two developments to local electric-power cooperatives.
After four years, a legislative hearing is on the calendar
This isn’t the first time that community solar advocates have tried to change state law. A bill introduced in 2021 died in committee. Backers say that’s a testimony to the lobbying power of utilities and affiliated organizations, and the unions that work with the utilities.
Until recently, that same fate appeared to be in store for the current bill, however a Feb. 14 hearing has been scheduled by the Assembly Committee on Energy and Utilities. However, state Senate action appears unlikely, the bill’s backers say.
Still, a hearing is a step in the right direction, and one that could encourage the utilities to begin to work on a deal that’s acceptable to all parties, said John Soper, chief of staff for Sen. Duey Stroebel, R-Cedarburg, a sponsor of the Senate bill.
“We are optimistic about a public hearing in the Assembly and we hope that will bring more attention to the issue and hopefully increase the likelihood of a hearing in the Senate and more dialogue among the stakeholders,” Soper said.
The new bill attempts to overcome some of the utilities’ opposition by increasing financial requirements for solar developers and allowing the utilities to capture costs associated with a new billing system for community solar subscribers. It also directs the Wisconsin Public Service Commission to develop rates used to calculate the amount of bill credits that subscribers receive.
Advocates say community solar would benefit communities, utility customers
More than 20 states allow community solar, and interest in it is increasing nationwide as consumers look to lower their energy bills and solar-development companies push to open up markets.
Proponents say the benefits of community solar include:
● Democratizing energy production: Community Solar allows participants to reduce their bills through energy-production credits and claim a share of the clean-energy transition.
● Diversifying the electric grid: Smaller, distributed points of power generation can bring local control to rural and underserved areas and help protect the electric distribution grid from large catastrophic events.
● Smaller impacts on agricultural communities: Taking large swaths of land out of agricultural production can have a ripple effect on the incomes of farmers who might be leasing the land and support businesses like grain elevators, seed companies, contract harvesters and others.
● Local control: Unlike large utilitydriven installations, smaller developments are subject to local zoning rules and local government approval.
Those benefits have generated a broad coalition of supporters that include solar installers and other renewable energy businesses, clean-energy advocates, the Wisconsin Farm Bureau Federation, Wisconsin Conservative Energy Forum, Realtors and building associations.
“For the last few years, there’s been a growing interest among a pretty wide and diverse group of stakeholders in state,” said Matt Hargarten, vice president of campaigns for Coalition for Community Solar Access, a national organization that has lobbied to change Wisconsin’s rules for community solar.
Given those benefits, what’s the opposition?
Third-party community solar is opposed by the state’s investor-owned, cooperative and municipal utilities, trade unions that work with them, and Wisconsin Manufacturers & Commerce.
The utilities argue that community solar would siphon off customers, leaving those who can’t participate to pick up a larger share of the fixed cost of the utilities’ power generation. In addition, they claim allowing third-party ownership of energy production would create an unregulated power market that could undermine reliability.
“The bill would chiefly benefit the outof-state community solar developers at the expense of the non-subscribing customers,” the investor-owned utilities’ lobbying group, the Wisconsin Utilities Association, argued in a memo to lawmakers. “Meanwhile, the developers would benefit from using Wisconsin’s electric grid with no obligation to maintain service and reliability, to prove the generating asset is necessary or cost effective, or to be a provider of last resort, as Wisconsin’s utilities are required to do.”
In addition, opponents argue, community solar can put subscribers at risk. Subscribers typically sign up for the lifetime of a solar installation, a 20- or 25year commitment that can result in reduced bill credits if costs change and early termination fees or trying to sell the subscription if they move out of their utility’s service area.
Is community solar allowed in other states? And how has it worked?
Twenty-two states have authorized community solar in some form, though its adoption has been slower in states like Wisconsin, where power is supplied by monopoly utilities that control power production, transmission and distribution, Hargarten said.
“Those programs were not easy to pass, are not easy to maintain, because of the utilities’ power,” Hargarten said.
One of those states, Minnesota, has become a focus for both sides of the community solar debate in Wisconsin.
Minnesota approved community solar in 2013 and trails only New York in the number of installations built as of March 2023, according to the Institute for Local Self-Reliance. Community solar accounts for nearly two-thirds of the solar energy produced in Minnesota.
Wisconsin community solar advocates say that points to widespread interest and customer benefits. But opponents point out that success has come at a cost to the utility’s non-participating customers.
“In other early adopter states, including Minnesota, we’ve seen the negative impacts of private community solar programs which disproportionately shift additional costs onto residential customers,” Alliant spokesman Tony Palese said.
Xcel Energy, Minnesota’s largest utility and a service provider in northwestern Wisconsin, in November said it would need to raise electric rates to offset the rising cost of the state’s community solar program, the Minneapolis Star Tribune reported. The utility’s costs for electricity from community solar gardens are expected to be $329 million this year, compared to $184 million in 2021.
Those costs are paid by all Xcel customers, but bill credits earned by subscribers are more than three times what Xcel pays for electricity generated by utility-scale natural gas and renewable energy sources, a Minnesota Public Utilities Commission official told legislators in November. More than 80% of the credits went to businesses.
Hartgarten said those impacts would be addressed by the rates set by the Wisconsin Public Service Commission.
“The reality is this bill doesn’t actually legislate what the bill credit would be,” he said. “The bill credit will be decided, based on a thorough analysis, and a thorough stakeholder process at the PSC. So for them to be talking about cost shift is very premature.”