AUGUSTA, Maine — Lawmakers settled a messy debate over Maine’s solar subsidies on Thursday by approving an industry-backed proposal aimed at reining them in.
The importance of the change is still up in the air. Regulators and policy experts haven’t said with any certainty how much the measure will save ratepayers after the incentives for community solar projects drove an electric rate increase that was finalized last month.
It is another example of how policymakers have been working with limited information and under duress on solar policy. The incentives dating back to 2019 succeeded in prompting a boom in solar projects, but the contracts subsidizing the projects are tied to global energy prices that have risen since then and added costs for ratepayers not directly benefiting from solar.
The complex issue has pitted the solar industry against Public Advocate William Harwood and a group of manufacturers in the State House halls. The former side won out when the Democratic-led Legislature agreed Thursday to support a set of fixes from Sen. Mark Lawrence, D-Eliot, effectively setting aside a more aggressive bid from Republicans.
Harwood and his allies doubt there will be much savings from Lawrence’s bill, while supporters of the measure, including Gov. Janet Mills’ energy adviser, say the effect could be meaningful while keeping projects going that could be endangered under the rival bill.
“It’s too soon for anybody to be saying, ‘I don’t think this is going to be saving money,’” Jeremy Payne, a lobbyist who works with the Maine Renewable Energy Association, said, responding to critics of Lawrence’s measure.
Overall, Lawrence’s proposal authorizes Maine to seek federal funding for solar initiatives. It limits participation in the subsidies, allows projects to opt out of them and requires utility regulators to annually determine costs and benefits of the incentives, known as net energy billing. The rival proposal from Rep. Steven Foster, R-Dexter, would have allowed regulators to propose subsidy adjustments that would have to be approved by the Legislature.
Harwood estimated that his preferred bill would have generated savings of at least 20 percent for ratepayers, while he didn’t know of any similar estimate for the other bill.
But Dan Burgess, director of Mills’ energy office, said Friday that an estimate of savings from either bill “would be speculative at this time,” but he expected the changes to “meaningfully reduce” costs by limiting new projects, setting deadlines to ensure only the most competitive projects are built, phasing out a costly program and finding certain lower-cost contracts.
Lawmakers have already twice made changes to the program since 2019 in an effort to rein in costs. Payne added the solar industry was not in love with either bill considered this year but viewed Lawrence’s plan as the “least damaging reform we could live with.”
His side has routinely questioned Harwood’s estimates, also arguing Foster’s plan would lead to less investment in Maine, loan defaults and litigation if the Maine Public Utilities Commission could change subsidies at any time. Those costs would be harder to quantify.
The fight ramped up earlier this year after Harwood estimated the cost of solar subsidies could reach $220 million a year by 2025 and keep rising for the next 20 years. Maine regulators also approved last month an estimated $135.7 million in annual rate hikes that began July 1.
Plenty of lobbying took place over the dueling bills this legislative session, which is set to wrap up soon this month after the Legislature approved an addition to the two-year state budget.
Republicans criticized the vote to advance Lawrence’s measure, arguing solar groups are the winner and Mainers the losers as a result, with Sen. Matt Harrington, R-Sanford, an energy committee member, saying Thursday was “our last opportunity this session to provide relief.”
“It’s obvious the all-out lobbying effort by the big solar developers over the holiday weekend had the desired effect on Maine senators,” Foster said.
Harwood, who also previously served under Mills as an adviser in the Governor’s Energy Office, said in a statement Friday that his office “respects the decision of the legislative majority” and hopes the program will reduce costs from the solar incentives. Lawrence is confident the change will be worthwhile.
“I think that last night, ratepayers ended up in a very good position,” Lawrence said Friday.