Lawmakers Look for Stopgap as Home Solar Projects Hit Year-end Reimbursement Caps in March

The solar industry has high hopes for a new home solar program set to start next year, but there’s concern the existing program won’t bridge the gap until then.

Connecticut’s program for compensating owners of home solar systems for the power they provide the grid will be replaced in early 2022, and solar industry representatives say that could speed up solar development. 

The existing program, the Residential Solar Incentive Program (RSIP) has reached a statutory cap with nearly a full year still to go before the new solar tariffs take effect. If lawmakers don’t raise the cap, solar developers say they could take a major hit as hundreds of megawatts worth of projects sit in the development pipeline.

The RSIP is a net metering tariff, where electric utilities pay the owners of home solar arrays for the power they generate and don’t immediately use, which is put out into the electric grid. When it was first established in 2011, lawmakers capped the total amount of home solar that could be built using the program at 300 MW.

The cap was raised to 350 MW in 2019 as lawmakers debated dropping the RSIP for a new tariff program. That new cap has already been exceeded, said Bryan Garcia, president and CEO of Connecticut Green Bank – the quasi-public organization that administers the RSIP – and there are enough projects in the pipeline to exceed the cap by 100 MW.

Solar developers are worried those projects will sit idle until the new home solar tariffs take effect in 2022. Officially, the new tariffs – where homeowners can choose between net metering and a new “buy all” option – start Jan. 1, but Eversource has told regulators it could take longer to configure its billing systems. 

“That would be devastating for businesses that are invested here and are trying to make solar work,” Mike Trahan, executive director of SolarConnecticut, the state’s solar trade group, said.

The backlog of projects could sit idle for at least 10 months, stifling investment in the industry at a critical time, Trahan said. Solar developers are now pressing lawmakers to raise the cap again to make sure there isn’t an interruption before the end of year – a request that State Sen. Norm Needleman, co-chair of the legislature’s Energy and Technology Committee, said is being considered this session.

State Rep. Jonathan Steinberg, D-Westport, has introduced a bill that would raise the cap to 500 MW.

Connecticut Green Bank’s board decided to allow another 32 MW of projects, Garcia said, but that still leaves nearly 70 MW in the pipeline, and any more lifting of the cap would need to come from the legislature.

“The cost of solar is going to go up dramatically without the net metering and solar incentives for at least several months, maybe as long as a year,” Trahan said. “That’s not fair to the consumer.”

Trahan said there has been concern from some lawmakers who don’t want to “drag net metering out any further,” but the solar industry is asking to keep the status quo until the new tariffs take effect. Once they do, it should lead to increased investment in solar – largely because it doesn’t have a cap.

“If you’re a businessperson entering the marketplace, you’re asking, ‘how much do I invest in my business? Do I buy a new truck? Do I hire a new crew?’ You’re more likely to invest in the state in these sorts of areas if you understand the program has a long life,” Trahan said. “Right now, we’ve been living cap to cap, and that has made some businesses less interested in investing deeply in the state.”

PURA said that the new tariffs should, at a minimum, support 50-60 MW of additional home solar projects built each year, keeping pace with the growth rate from the past five years.

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