BUSINESS

Hotly debated solar power financing question will receive more attention from state regulators

Corrinne Hess
Milwaukee Journal Sentinel

In Wisconsin, third-party financing of solar projects has been a legal hot potato that politicians and regulators have avoided for years. 

But this week, the Public Service Commission agreed to hear testimony from groups hoping to clarify the legality of third-party financing for rooftop solar. 

Proponents say allowing third-parties to do this will expand competition in the utility market, accelerate the state's clean energy goals, and make it easier for homeowners to purchase solar panels. 

But others, including We Energies, say third-party solar developers won't have to follow the same regulations as utility companies. The utility argues that the solar developers are pushing this plan in the hopes they can circumvent the law and the legislature.

"The types of 'financing' arrangements that seek to cherry pick certain solar owners are not lawful and would harm our customers by shifting additional costs from solar owners onto those who cannot afford or choose not to host solar systems," We Energies spokesman Brendan Conway said in a statement.

"This cost shift is not theoretical; it is happening. In California the cost shift to non-solar customers is as much as $3.5 billion per year and studies found that lower-income customers are hit the hardest."

In May, The Midwest Renewable Energy Association and Vote Solar filed petitions with the Public Service Commission asking the utility regulating body to consider third-party financing options. 

Will Kenworthy, Vote Solar's regulatory director for the Midwest, said he's hopeful that the PSC will recognize third-party ownership for solar as a common-sense measure that is long overdue.

"Third-party financing breaks down financial barriers by removing high upfront costs for solar panels," Kenworthy said. "Confirming its legal status will go a long way for clean energy equity in Wisconsin."

The PSC's 2-1 decision Thursday was only to open the case. A decision will not be made until December. 

Gov. Tony Evers-appointed commissioners Tyler Huebner and Rebecca Cameron Valcq voted in favor of the move. Both said it's time the PSC makes a decision on third-party financing. 

"This is the appropriate place for the process to play out," Huebner said. "This doesn't make us trailblazers. Seven states and Washington D.C. have already decided this."

More:Kathleen Gallagher: Wisconsin homeowners who want to install solar panels face a fight with We Energies. Why the utility continues to win.

Ellen Nowak, who was appointed by former Gov. Scott Walker, said the decision should be made by the state Legislature. Nowak called the PSC's vote "purely political," since the state Supreme Court has already ruled the issue. 

"By instructing the parties to forgo their rightful motion practice and have the proceeding concluded by Dec. 1, the Commission made it clear that they want this issue decided before a potential change in the Commission’s make-up," Nowak said. "Because the  Commission decision (Thursday) improperly expands its jurisdiction, I could not support it.”  

In 2018, We Energies stopped a plan by the city of Milwaukee and its partner, Eagle Point Solar, from installing rooftop solar panels on six downtown buildings. Since Eagle Point was running the project and getting an 80% ownership stake, We Energies contended it was acting like a public utility and therefore violating state law.

Eagle Point took the case to the Wisconsin Supreme Court and lost.

More:Solar project developer takes dispute with We Energies to court, suing the utility and Public Service Commission

Corrinne Hess can be reached at chess@gannett.com. Follow her @corrihess