Utility-backed 'sunshine tax' for solar energy advances in Iowa House

The Iowa State House cupola on Thur. Mar 11, 2016. (Rebecca F. Miller/The Gazette)
The Iowa State House cupola on Thur. Mar 11, 2016. (Rebecca F. Miller/The Gazette)
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DES MOINES — Legislation requiring a “sunshine tax” for homeowners, farmers and businesses that generate solar power will move to the full House Commerce Committee with the support of rate-regulated utilities and large business groups.

Opponents of House Study Bill 185 said Tuesday it would impose fees of about $300 a year on solar customers to cover the cost of using the electric grid.

That would extend the payback on small-scale solar power generating units from less than 10 years to as long as 20 years, former legislator and current Cedar Rapids City Council member Tyler Olson told the subcommittee.

“If the life of system is 25 years — no one going to make that investment,” he said, adding that it could lead to the loss of some or all of the estimated 800 solar industry jobs in Iowa, he said.

However, the state’s largest utilities called the changes in the bill a matter of fairness.

“When a customer uses the grid but does not pay their share of those costs, all other customers bear that cost,” said Julie Vande Hoef of Alliant Energy, which supports the bill’s objective.

“It is important that we preserve a cost-of-service system so that all those that are taking advantage of the infrastructure system are paying for the usage of that system,” said J.D. Davis of MidAmerican Energy Company, which also supports the bill.

Derek Sadler of Shell Rock-based Current RE Solar, which installs renewable energy systems, estimated the solar electricity being talked about in the bill amounts to “tenths or hundredths of a percent” of Iowa’s total generation.

“If the idea is to kill private generation, this bill goes in that direction,” said former Speaker of the Iowa House Christopher Rants.

Rants, who represented the Iowa Solar Energy Trade Association, called the conversation “premature” because the Iowa Utilities Board’s study of distributed generation and net metering — how solar energy producers are compensated for generating excess electricity — and won’t be completed until next year.

However, former Senate Majority Leader Mike Gronstal said the bill would “usher in a dramatic era in solar energy.” He disputed earlier claims that solar generators are already contributing to the cost of maintaining the grid. Their monthly service charge only covers the cost of the electric meter and billing, he said.

Current policy allows a small number of Iowans to use the grid for free while 95 percent of Iowans subsidize the transmission and distribution costs of solar power generators, he said.

Under current net metering policies, a customer who owns private solar can “bank” excess energy and use it to offset their bill when their energy needs are greater than the energy they produce.

Like MidAmerican, Olson believes there is a huge opportunity for solar power in Iowa.

“The questions is who is that opportunity going to be available for?” he said. “Is it going to be available for a handful of monopoly companies? Or is it going to be available to all Iowans — farmers, business owners, homeowners? I believe we should not be choosing a few companies.”

Rep. John Forbes, D-Des Moines, a member of the subcommittee who has 90 solar panels on his pharmacy, called for delaying action until the Legislature has the results of the utilities board study.

However, Commerce Committee Chairman Gary Carlson, R-Muscatine, said now is the time to make sure Iowa has the right infrastructure policy and to prevent solar power generators from pushing their costs onto low-income people and those on fixed incomes.


A hearing on a companion bill, Senate Study Bill 1201, is scheduled for 1:30 p.m. Wednesday.

l Comments: (319) 398-8375; james.lynch@thegazette.com

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