State regulators backed off a rate plan Wednesday that the solar industry claimed would have killed its industry and instead ordered a study.
Louisiana Public Service Commissioner Clyde Holloway said it’s not fair for everyday buyers of electricity from utility companies to pay for incentives used only by homeowners and businessmen who can afford to install solar panels.
The financial subsidies are aimed at helping establish the solar industry.
Holloway, of Forest Hill, says he wants the PSC to set the monthly electricity rates in a way that would shift more of the cost burden onto the owners of solar panels.
The incentives have helped the solar industry grow, said Aaron Dirks, chairman of PosiGen Solar Solutions in New Orleans.
He said his business employs about 300, all of whom would suffer if the PSC abruptly changed the rates for owners of solar panels.
Thousands of homeowners and businesses in south Louisiana used tax credits to install solar panels when rebuilding their homes and businesses after the past four hurricanes.
As the name suggests, the panels need the sun to make electricity. Using what is called “net metering,” customers can sell electricity made by the solar panels but not used during daylight hours to offset the costs of buying power from traditional utilities at night.
About 2.5 percent of the homes in New Orleans use net metering to send excess power created during the day to Entergy in return for a credit that lowers the customers’ monthly bills for the power bought from the utility company at night.
Recently, the issue came to a head when three small utilities operating in rural areas, including WST Electric Cooperative, which provides power to rural parts of Washington and St. Tammany parishes, claimed PSC rules give them the option to stop approving net metering requests when more than one-half of 1 percent of their customers installed solar panels.
Supporters dispute the rules interpretation as a cap and questioned how those cooperatives calculated the half percent.
Andrew Peffley, a contractor who installs solar panels in that area, says the cooperatives’ refusal to allow net metering is killing his business.
Holloway offered to clear up the rules by removing the half-percent cap. But he also wants owners of solar panels to carry more of the burden for servicing and infrastructure costs that are charged to all the customers of a utility company.
He also wants to lower what utilities have to pay to buy excess electricity from solar-powered units.
Holloway withdrew his motion when PSC commissioner Scott Angelle, of Breaux Bridge and the swing vote on the five-member regulatory panel, said he wanted more study of the issue.
The regulators then agreed to commission a study of the costs and benefits of solar power. The results would be reported by Nov. 30 and then the PSC will decide how to set the rates.