DES MOINES — A year ago, Senate File 583 was one of the most contentious bills considered by the Iowa Legislature.
On Thursday, a House Commerce subcommittee hearing on the bill, dubbed the “sunshine tax” by solar energy advocates, was a virtual lovefest with lobbyists for utility companies, solar and renewable fuel advocates, and agricultural interests either endorsing the changes made since last year or declaring neutrality.
“I didn’t hear any nays,” a pleased Chairman Gary Carlson, R-Muscatine, said at the end of the hearing on SF 583, which addresses electric utility rates and how private solar generators are charged for use of the electrical grid.
Last year, the Senate voted 28-19 to approve the bill, which would have allowed rate-regulated utilities to charge solar customers additional fees.
Then the bill stalled in the House, largely because of opposition from Democrats who sided with solar energy advocates. They warned the uncertainty SF 583 would create would lead to job losses for Iowans who build, install and maintain solar systems.
Legislators credited the interested parties with working together to break the stalemate.
“They decided to come together to cut bait and basically work together to come up with a solution that would, hopefully, satisfy both sides without getting all they want,” said Rep. John Forbes, D-Des Moines. It now appears the Legislature will be able to pass “some type of a solar bill that will be workable for Iowa for now and in the future,” he said.
SF 583 as amended provides “certainty to the utility companies and the companies that are involved in solar and solar sales and solar installation, and it provides certainty to the consumer,” Carlson said. “Those are the partners that we need to all have together on this issue.”
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The compromise supports all forms of renewable energy while fairly valuing the customer-owned solar energy and keeping rates affordable.
“This updated energy policy that all stakeholders are rallying around will create long-term certainty for all customers and set the stage for the development of even more renewable energy in Iowa,” MidAmerican Energy said in a statement.
The company pushed for SF 583, arguing that solar customers shift costs to other ratepayers. Private solar generators avoid some of the $328-a-year cost to access the electrical grid that the average nonsolar customer pays, the company said. The renewable energy lobby countered, saying residential solar benefits the electrical grid.
The agreed-to amendment grandfathers in existing private solar and maintain net metering, which provides owners of those systems more certainty about the payback on their investments.
It also calls for the Iowa Utilities Board to study of the value of private solar in Iowa in seven years or when Iowa is getting 5 percent of its energy from solar, whichever comes first. Less than 1 percent of the state’s energy comes from private solar.
If the study finds ratepayers are being disadvantaged by private solar, the Legislature may have to revisit the issue, Forbes said. That provides some certainty to the rate-regulated utilities that the issue will not be forgotten.
Iowa Solar Association President Tim Dwight doesn’t think that will be the case. Passage of the bill could unleash growth in solar because of the certainty and predictability, he said after the hearing. He noted there were $9 million in applications to the state’s $5 million solar tax credit fund.
Iowa Pork Producers were part of the discussion after last session because its members like the opportunity to generate their own electricity, public policy director Drew Mogler said.
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“Solar energy is a way for them to manage their costs,” he said, “and last year’s bill created a lot of uncertainty.”
Rep. Joe Mitchell, R-Mount Pleasant, who was among Republicans who opposed the bill in 2019, signed the subcommittee report.
“It sounds like this is a heck of a lot better than last year,” he said.
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