Ironically coinciding with an announcement that Chicago plans to utilize more renewable energy, a bill has passed the Indiana legislature eliminating much of the financial incentive for individuals to install solar panels. The bill was pushed by Indiana’s investor-owned utility companies, who fear the growing popularity of the solar industry. Solar energy only accounts for less than 1% of the state’s power, but quickly falling solar panel prices—paired with their increased efficiency—is leading to their growing popularity.
The bill is now in the hands of Governor Eric Holcomb. Currently, the state has four main solar energy incentives: a net metering program, the Renewable Energy Property Tax Exemption, the Indiana Sales Tax Incentive for Electrical Generating Equipment, and the Indiana Income Tax Deduction for Solar-Powered Roof Vents or Fans. The bill is specifically targeted at the net metering program. Energy customers that participate in net metering receive credit on their energy bills for the solar energy that they produce but do not consume.
The bill would limit the rate at which credits are issued for net metering. Everyone who installed solar panels before 2018 would continue to receive credits at the current rate for the next 30 years. Those who install panels before 2018 and 2022 would only be able to collect until 2032. The 11 cents per kilowatt/hour credit would also be reduced to 3 cents per kilowatt/hour. Some are saying that the bill is unnecessary tough because the net metering program will only be in effect until over 1% of the state’s energy comes from alternative energy sources, such as wind or solar.
Others believe that the bill is directly aimed at encouraging consumers to buy into community solar programs, which the utility companies own. Community solar programs work by leasing solar panels, which are part of larger solar arrays, to consumers. This allows customers to use solar energy without having panels on their own roof, but it also keeps the utility companies in control of energy production.
The bill was introduced by State Senator Brandt Hershman. The Senate voted 37-11 to pass the bill with changes made by the House.