Alliant shift should benefit public-sector solar projects

CEDAR RAPIDS - Alliant Energy has had a change of heart on solar energy that will make it more attractive for local governments, school districts and other public and non-profit entities to install solar arrays on buildings that aren't big power users.

In short, Alliant now says it will allow a public or non-profit entity that contracts to purchase power from a solar company that installs and owns the equipment to be credited at the retail rate for excess electricity produced and sent to the utility's electric grid.

Until now, Alliant has said it would not permit these 'net metering” payments at the rate that customers pay Alliant for electricity if a third party was involved in the ownership and operation of the systems.

But these third-party arrangements have been necessary to make financing work. Private-sector companies such as SiteGen Solar in Cedar Rapids, Moxie Solar in North Liberty and Eagle Point Solar in Dubuque identify investors who qualify for federal and state renewable energy tax credits and tax depreciation credits. Public-sector and non-profit entities, which don't pay income taxes, do not.

Tyler Olson, who heads up SiteGen Solar as vice president of Paulson Electric in Cedar Rapids, called Alliant's move on net metering 'good news,” saying 'it opens up opportunity.”

Alliant's policy change is apt to impact projects like those being explored by Linn County and Cedar Rapids as it will allow them to install larger solar arrays on buildings to meet most of a building's annual electric needs. Up until now, the entities had to look to install smaller arrays designed to meet a building's lowest monthly use. Larger, more costly arrays would generate excess electricity in low-use months that they would not be paid for.

Just this week, Alliant's policy change prompted Cedar Rapids to extend by two weeks its current bid request for proposals to install a solar array to help power the city's bus garage.

The city had asked for proposals from firms based on no net metering, but it said it is now reviewing the bid request in light of Alliant's new decision.

Linn County Supervisor Ben Rogers said the county is seeking solar proposals for all of its buildings, and a handful of companies have responded to the request. Linn County, too, wants to see how Alliant's decision impacts its plans.

An instructive example of what the change in net metering can mean is in Johnson County, where earlier this year the county wanted to install a 140 kilowatt solar array at its Secondary Roads campus. However, the county was forced to downsize the array by 40 percent so it did not create excess electricity in low-use months, said Josh Busard, Johnson County sustainability coordinator.

Alliant's Robin Sempf, manager of marketing and communications, said Alliant's policy change came after it reviewed its position once it received formal applications from customers.

Barry Shear, president of Eagle Point Solar in Dubuque, said the timing of the policy change didn't come in a vacuum.

In July, Shear launched a complaint against Alliant Energy with the Iowa Utilities Board over net metering in such arrangements. Alliant's change came to public light in its response to the complaint.

Shear called his legal position in the dispute 'on rock-solid granite ground” and said, 'Obviously, Alliant reached the same conclusion.”

He said it ranked as 'a significant story for Alliant to relent on this.”

The Environmental Law & Policy Center in Des Moines joined Shear in his complaint. Staff attorney Joshua Mandelbaum called Alliant's policy change 'a pretty remarkable about-face.”

At the same time, Ruth Comer, spokeswoman for the state's other major electrical utility, MidAmerican Energy, said MidAmerican has not changed its position to align itself with Alliant.

Shear said his latest victory with Alliant - his solar business operates in Alliant's territory, not MidAmerican's for now - is a second one, yet still a limited one. Shear said he will continue to fight at the Iowa Utilities Board to win board backing for Alliant's policy shift and to win approval on other issues allowing net metering on larger projects. Under the current rules, net metering is not permitted on projects that use more than 20,000 kilowatt hours of electricity a month or on electricity generated from the portion of an array larger than 500 kW.

By way of example, Shear said one of his firm's five solar projects for the city of Asbury in Dubuque County, the wastewater treatment plant, can't proceed because it uses more electricity per month than is allowed in the still-existing net-metering rules.

His largest victory came last July, when he fought Alliant to the Iowa Supreme Court and won after Alliant said Eagle Point should not be allowed to operate a solar array on Dubuque's Municipal Services Center that was installed in 2012.

The court ruling opened up the prospect in Iowa for the public sector to try renewable solar energy projects via third-party arrangements.

The federal renewable energy tax credits for solar projects are slated to drop from 30 percent of cost for non-residential projects to 10 percent for projects not in place at the end of 2016. That will make the public-sector projects hard to finance after that, Shear said.