Louisiana PSC to study solar industry impact and taxes

The Louisiana Public Service Commission is seeking an expert to study the impact of the solar industry in the state and whether solar providers and customers should be paying more in fees.

PSC Chairman Eric Skrmetta called for the study during discussion of whether the commission should lift restrictions on how much electricity utility companies should have to buy from homes and businesses that have solar cells.

At issue is “net metering,” a process that allows solar users that generate more power than needed to run lights, appliances and equipment to sell it back to utility companies that supply power to supplement solar-generated electricity. Instead of cash, though, they get credits toward whatever electricity bills they run up.

The state currently has a cap on that amount, based on peak demand loads.

“We’re not getting rid of net metering,” Skrmetta said. “We’re just lifting the cap.”

Commissioner Clyde Holloway argues that with the federal and state tax credits, solar users shouldn’t be getting further breaks. He maintains that homeowners who don’t have solar power have to pay higher rates because of solar users.

By generating their own electricity, homeowners and businesses with solar power don’t pay toward operating costs of utility companies.

“I don’t think it ever got to the public that you’re paying for this,” Holloway said. “I’ve urged the Legislature to kill this subsidy.”

Skrmetta said the commission’s concern is “the cost of solar on consumers who don’t have solar.” He said the current tax structure on solar systems that are owned expires in 2017 and in 2015 for systems that are leased. About 60 percent of the solar units in use are leased. He said the tax rate may need to be revised.

“Right now, we’re on the small end of solar,” the chairman said. For every unit of solar they generate, they (utility companies) have got to have an equal amount of electricity generated to back it up.”

Solar equipment providers argued that three small utility co-ops — Panola-Harrison, Northeast and St. Tammany — are getting around granting dollar-for-dollar energy credits through net metering by claiming they’ve reached the cap, but there’s no evidence to prove it.

The cap is 0.5 percent of peak demand.

Ken Antee, president of Wilwhite Solar Solutions in Shreveport, said he and others in the industry support a fair study so “we will get some answers. But it needs to be a true independent study to look at the cost benefit.

“Let’s find out what that cost is,” he said. “If there is a cost, let’s pay it and get on with business.”

Solar homes that are not occupied during the day build up electricity that is sent backward through net meters to be used by utility companies.

“If you stay home and use everything you generate, it’s not going to affect you,” he said.

Holloway said he also believes “we should lift the cap and let people go on solar if they want.” He also favors eliminating the tax credits and “I hope it survives on its own without a subsidy.”

Commissioner Foster Campbell said the current cap is too small, so solar power generators are limited in how much they can feed into the grid.

“We’re shooting with a full choke right now,” he said.

Solar providers said the typical home unit generates about 12 kWh. State law allows up to 25 kWh for homes and 300 kWh for businesses.

Source: The News Star

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