The Legislative & Policy Balancing Act in the Booming Renewable Energy Industry
In the face of remarkable industry growth, state and local legislatures are trying to get their arms around how to manage and balance the demand for customer access to renewable electricity, the industry responding to the need, and the concerns about the impacts on ratepayers and natural resources.
The renewable energy industry, despite the setbacks encountered during the COVID-19 pandemic – is exploding. According to a June 2021 report from the Solar Energy Industry Association, the U.S. currently has installed 102.8 GW dc of total solar capacity. Enough to power 18.6 million American homes, and solar installations accounted for 58% of all new electricity-generating capacity added in the U.S. in Q1 2021. https://www.seia.org/us-solar-market-insight.
This growth is here to stay, as reflected in every day’s headlines regarding the devastating impacts of climate change and the benefits of clean, renewable, homegrown electricity. (This revolution is not only being televised, it’s powering everyone’s television!)
In the face of this remarkable growth across the US, state and local legislatures are trying – with varying levels of success – to get their arms around how to manage and balance the demand for customer access to renewable electricity and the rapidly expanding renewable energy industry responding to this need; and trying to weigh this explosive growth with concerns about impacts on ratepayers and natural resources. As more states bring solar programs online, these programs are encountering a mature developer market, replete with many players like Green Lantern Solar that have years of experience and proven track records, and an eye toward emerging markets.
It is definitely a different game than it was ten or even five years ago. And it’s not like Green Lantern Solar and our competitors are making and selling bricks or shoes or some other known commodity with steady demand and little regulatory intervention. The entire energy economy is highly regulated and the available incentive programs vary widely from region to region, state to state, and utility to utility. Literally every step along the entire process of developing and operating a solar project is subject to heavy scrutiny by some federal, state or local authority under a dizzying array of laws and regulations.
Furthermore, the production and delivery of electricity has been dominated by the monopoly structure that provides utilities with state-sanctioned control over their jealously guarded customers and their (often aged and occasionally decrepit) distribution infrastructure. Rapid deployment of new “intermittent” (primarily solar and wind) renewable energy has indeed forced a paradigm shift in how utilities manage both the distribution and transmission grids.
Some are handling this change better than others, of course. Giving credit where it is due, Vermont’s largest distribution utility, Green Mountain Power Corp, has embraced many aspects of the turn toward distributed renewable generation, and Vermont’s small, local Burlington Electric Department is now 100% renewable. Other utilities in Vermont, however, have been recalcitrant participants or downright hostile to programs like net metering.
Green Lantern stays on top of all this by being an active participant in trade groups but taking strong independent positions where necessary and being very clear-eyed and practical about where we deploy our resources. We believe it is critical to advocate for regulatory changes that ensure market stability, investor confidence, reasonable returns and continued job growth. We’re also nimble enough that we can redeploy assets to other markets when conditions require it.
For example, in Vermont, Green Lantern has for years been at the forefront of regulatory and policy making decisions through participation in Renewable Energy Vermont and other organizations, but the legislative and policy victories in recent years have been few, far between, and only incremental. For many years Vermont’s robust net metering program drove the deployment of hundreds of MW of new projects, provided the economic framework for customers to participate directly in the green economy and the fight against climate change, and allowed for the increased deployment of distributed generation by leveraging outside private investment. In fact, a recent report by Synapse Economics found that from 2014 to 2019, small-scale solar in New England saved utilities and all ratepayers – not just those participating directly – more than $1.1 billion, $79 million of that in Vermont alone. https://www.revermont.org/local-solar-saved-new-englanders-1-1-billion/
However, Vermont’s Public Utilities Commission and Department of Public Service have continued to inexorably ratchet down Vermont’s commercial/industrial net metering program. The project size cap of 500 kW(AC) and the commensurate customer cap of 500 kW(AC) were acceptable limitations when net metering rates were strong, but compared against other states with economies of scale, Vermont’s C&I net metering program has now withered. In September 2021 incentives will drop yet again, and Vermont is rapidly reaching the point where – at least as far as Green Lantern is concerned – the juice is no longer worth the squeeze. (It appears that the PUC may revive its moribund net metering rulemaking docket after three years of stagnation, and it remains to be seen whether the state will take this as an opportunity to inject new life into the C&I program, or kill it once and for all.)
On the other side of New England in Maine, Green Lantern faced a different, more acute issue. After years of conservative opposition to a strong solar incentive program, the new net energy billing program prompted a huge influx of development, and the regulatory infrastructure and monopoly utilities were overwhelmed. Legislators, under pressure from opponents, frantically over corrected in the 2021 legislative session. Multiple bills were introduced, including a variety of disastrous proposals that would have destroyed investor confidence in Maine’s emerging market and arbitrarily thrown hundreds of millions of dollars of investment out the window. A moratorium on all projects, arbitrary retroactive cutoff dates for project eligibility, and indiscriminate caps on participation were all under consideration.
Green Lantern took a lead role in pushing Maine’s industry representatives to take a hard line against these changes, which they did. We developed strategic alliances with other solar developers to present real-world, real-time data to legislators, worked with other industry groups to explain the benefits of the program, testified before legislative committees and subcommittees, and marshaled customer support. Through these efforts and the efforts of others, Green Lantern was instrumental in developing reasonable legislative alternatives and cementing opposition to the most unreasonable and regressive proposals. Green Lantern’s investments in Maine were protected, and rational legislative revisions to the program were implemented, heading off a calamity and to benefiting the industry as a whole. We are super proud of these efforts and the relationships our team developed along the way!
By leveraging our individual and collective experience and our openness to collaboration, all of us at Green Lantern will continue to lead the way in the realm of policy and legislation in any market that we enter. We look forward to the challenges that await!
David Carpenter. Esq. is General Counsel of Green Lantern Development, LLC. with more than two decades of providing counsel on environmental, land use, renewable energy and commercial matters.
Carpenter earned his J.D and M.S.E.L from Vermont Law School and is a Penn State University graduate. He is a past co-chair of Renewable Energy Vermont’s Legislative & Policy Committee, a Member of the Vermont Bar Association's Board of Managers, and a guest lecturer for the University of Vermont’s Sustainable Innovation MBA program. He is also Chairman and Training Officer with the Orwell, VT Volunteer Fire Department.