HB 1320 and how it Affects you
First of all, HB1320 does not affect Municipal or Rural CO-OPs.
Currently, we have full net metering where you get a kWh for kWh credit for your over production of energy, and the excess gets stored as credits indefinitely. Kinda like roll over minutes which some cellular companies offer.
The bill seeks to fundamentally change net metering for all residential customer, and only residential customers of Duke, IPL, Vectren, NIPSCO, and I&M. I say it like that because customers with demand charges which incur demand charges are exempt. Which means that some businesses, churches, schools and local units of government might fall under this rule as exempt as well. To replace the net metering they are going to an avoided cost measure, which basically means that instead of a kwh for kwh credit you will only get 30c on the dollar.
Also, current systems are wired in such a way that the energy you produce actually goes into the home and powers anything which is requiring energy, this is a form of energy efficiency. This bill will require a different wiring methods so you will have to sell all your power to the power company first, thus you will not get any of those energy efficiency benefits. This called “buy all, sell all” and it is drastically less beneficial to you!
Currently the bill states that all installs installed before Dec 31,2014 will get grandfathered with the old net metering rule (the current one) The bill is very confusing though because as introduced it also references May 14, 2015. However, if you add additional modules to your home, you will have to sign new interconnection agreement, thus you will no longer be grandfathered.
This is extremely bad for businesses because most people purchase a smaller system and then plan on buying more in the future. Also, if you were to sell your home the home buyer will not get the grandfathered net metering rule. Lastly on this topic, this removes the incentive to purchase a system as an investment for resale on the home market. Often times, a purchased solar system will be installed at a value less than the fair market value of the system. ie, installed for $3.25/watt, valued at $3.65/watt. You added instant equity, and resell value to your home. However, HB1320 if enacted, replaces and drastically reduces the kWh for kWh credit, thus the instant equity has vanished.
The economics on a purchased system has gotten so good that cleantechmedia.com did an article on it recently and found that your money is better invested in the purchase in a solar system, than putting it into the stock market (S&P500). Even in Indiana!
Here is an example for you: A 5kw solar system could save you on average of $65/mo if you are a Duke customer. In ten years, because we are projected to have another 45% increase in bills, that same sized system will now be saving you close to $100/mo; by then it will be paid for, so you still have 15 years on your warranty and 15 years of savings. Not to mention all the solar renewable energy credits (SRECs) you will be getting paid for your solar production.
We are just now starting to see Return on Investment or ROI hit the 8 year mark in some locations and conditions. Solar prices are still falling, so that magic number of a ROI of 5-7 years is when there is mass adoption, and it is right around the corner but the utilitie are aiming to stop it.
It may appear that there is one good thing about the bill, in that it opens the doors to third party solar leasing for net metering. Which I fully support. However, not at the expense of changing the current net metering, and there is a catch to leasing under HB1320. The leasing company will not likely be SolarCity, SunRun, or NRG; instead it will be your utility company. I’ve read up on this deal on how Duke operates this in other states, and here is how it may work. They install solar and maintain the system (but they really won’t maintain because there is no maintenance), and they will drop your bill by $30/mo.
Adding this type of third party leasing for net metering will not make up for the negative and damaging changes to the current net metering attangement currently available in Indiana and therefore adding this type of financing will not likjely have any significant impact on the solar market in Indiana.
HB 1320, however does not authorize third party purchase power agreements (PPAs).
If you cross compare the 5kw from the above paragraph, you are losing about $35/mo in actual savings for the life of the system. So, 10 years from now you will still be only saving $30/mo, compare that to the purchased system and that’s a difference of $65. It adds up over time. And guess what, the utility company will also get the 30% tax credit, they will make money selling the power to you and your neighbors on the solar equipment, they will get all the SRECs, and if the carbon legislation is implemented, the utility will get any and all environmental benefits to this ruling. That’s a lot of dough.
Duke Energy actually just closed a deal this past week on the purchase of a moderate sized solar installation company.. So the ball is already rolling for places like South Carolina, Florida, and if HB1320 passes, Indiana.
HB1320 is profoundly pro-utility, discourages private investment and personal responsibility by homeowners making it uneconomical, destroys small businesses, and discourages entrepreneurship.
Please contact your legislator and tell them to vote no on HB1320, and sign this petition. This petition asks Rep. Eric Koch to withdraw HB 1320.