Maine's solar industry possibilities shine after 2019 law changes
Photo / Maureen Milliken
New state law allows solar arrays of up to 5 megawatts use net metering — storing excess energy for use or sale. Previous law capped net metering to arrays of 660 kilowatts, like the one at Brunswick Landing, pictured here.
The landscape for solar development for everyone from land owners to businesses to investors has changed dramatically after a slew of laws were passed this year making it more accessible, industry experts said this morning.
The Maine Real Estate and Development Association breakfast today coincided with Wednesday's move by the Public Utilities Commission to adopt rules for procuring blocks of energy from solar producers, which is expected to spur larger solar arrays.
"There's lots of new interest in Maine solar development around the region," Fortunat Mueller, co-founder and managing partner of ReVision energy, told the standing-room-only audience.
Mueller was joined by Justin Morren, a tax manager with BerryDunn, and Jim Larrick, a commercial lender with Mascoma Bank, in discussing the future of solar development in the state, given the slew of laws related to clean energy and specifically to solar energy, passed by the Legislature this year.
Net metering — the ability to store excess generated energy for later use or sale — was radically changed under L.D. 1711 , approved by the Legislature in June. The new law raises the cap to allow it for arrays of up to 5 megawatts, which could cover as much as 20 to 25 acres. The previous limit was 660 kilowatts, an array of about 3,000 panels on three or four acres, similar to the array ReVision installed at Brunswick Landing at the end of 2017, Mueller said.
The law calls for the PUC to solicit bids for for long-term contracts to supply up to 400 megawatts of energy from solar projects, which is expected to encourage more large-scale solar developments. The PUC adopted the rule Wednesday and will go out to bid in January. Mueller said while some predictions are it will take more than a year to get the dozen or so bids required, he thinks it will happen this summer.
The law also lifts the 10-meter limit on shared net metering, which will help, for instance, a multi-family developer where the landlord pays the energy bills. The new limit is 200 meters for community users, and no limit for commercial ones. A new commercial and institutional net metering option makes it easier for large-scale commercial and institutional owners to recover costs, which should spur more development among those users.
He said, overall, new rules will allow more partnerships, as well as make solar power more accessible to low and moderate-income users.
'Maine looks good'
Larrick, whose bank opened a commercial lending office in Portland in 2018, said, "Maine looks really good right now."
Mascoma Bank, headquartered in Lebanon, N.H., has loaned more than $30 million for solar project construction and permanent financing in Vermont, New Hampshire and Massachusetts, and is now also in the Maine market.
Larrick said that while Maine's new legislation lays a good foundation, things change fast in the solar industry. The best financial move for a developer looking for financing is to have a strong contract, which lenders weigh heavily. Maine's new laws increase the possibilities for contracts, he said.
Morren said the investment tax credit for solar is also a good development option — at 30% in 2019, it cuts the qualified part of a project cost by that much, and typically 90% to 95% of a project qualifies. A project must be underway by Dec. 31 to qualify, though. The percentage decreases by 4% in 2020, and continues to decrease each year.
Previously, the law was that the array had to be in service. The fact that it now only has to be underway means physical work has had to begin, with five costs locked down.
At least seven major laws related to clean energy were passed during the first session of the 129th Legislature, several specific to solar energy. Besides L.D. 1711, another overturned legislation that eliminated net metering, and a third created a tax exemption for renewable energy equipment. Mueller said with so many new laws, the is now on seeing what they generate rather than proposing more.
"We'll see how the market works now," he said.
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