Residents of Indiana need to be aware of a recently enacted piece of legislation that affects residential solar in our state: Senate Bill 309, which has been signed by Gov. Holcomb and goes into effect July 1. So what exactly is SB 309, and what does it mean for Indiana homeowners with solar as well as those planning to have a system installed in the future?
Net metering is a benefit provided to residential solar homeowners originally put in place to promote the growth of solar and to help make systems more affordable to residents by shortening the payback period—the time it takes for a system to pay for itself. Under this policy, homeowners who produce solar energy can sell any excess power back to the utilities at retail value, the same price at which they purchase power. This provides the best possible payback rate for solar systems through an even watt-hour for watt-hour, dollar for dollar exchange.
The new net metering policy under SB 309 lengthens the payback period. Excess power produced by residents will now be sold back to utilities at wholesale value, which is approximately 30 percent of the retail value. This represents a significant reduction in the benefits provided to Hoosiers who wanted to save money on their utility bills and help the planet by going solar.
Full net metering benefits will disappear from the state completely after 2047. Although that may seem like a long way off, it is imperative for Indiana residents considering going solar to take advantage of remaining net metering benefits now in order to get the most bang for the buck. While this news is disheartening for solar enthusiasts and green advocates, there is still time to take action.
Here’s a quick rundown of the three tiers of Indiana’s new net metering policy:
- Tier 1. Anyone who currently owns or installs a solar system prior to December 31, 2017, will receive the original net metering benefits (at retail value) until the year 2047. After 2047, excess energy can be sold back at wholesale value.
- Tier 2. Anyone installing a system prior to January 1, 2022, will receive the original net metering benefits (at retail value) until the year 2032. After 2032, excess energy can be sold back at wholesale value.
- Tier 3. Finally, anyone installing a system after the year 2022 will receive net metering benefits under the new policy at wholesale value.
In a nutshell, we recommend that you get your solar installed before year’s end if possible, and if not, there is still time to plan for a system before the year 2022.
As disappointing as this news is, SB 309 will not cripple the rooftop solar industry in Indiana the way some have characterized it. Residential installers will need to be smart about how systems are designed to compensate for lower net metering benefits or even avoid net metering in certain cases. For example, homeowners can take advantage of energy storage solutions such as the Tesla Powerwall and other battery systems, which are becoming more available and will make solar installations less than 10 kilowatts more feasible for those who want to store some of the excess electricity generated by their solar systems to use when the sun isn’t shining.
While solar supporters across the country may be shaking their heads and thanking their lucky stars when their own state governments are more supportive of solar, Inovateus remains committed more than ever to promoting the benefits of solar in Indiana and building a brilliant tomorrow.
By Mauricio Anon, marketing ambassador, Inovateus Solar
