Renewables group sues Wisconsin regulators over third-party solar financing – pv magazine USA

The Midwest Renewable Energy Association alleges that uncertainty about leases and power purchase agreements hurts the state’s solar industry.

The Midwest Renewable Energy Association (MREA) is suing Wisconsin state regulators over policies the group claimed hinder local clean energy and prevent access to third-party solar financing.

Filed in the Wisconsin Circuit Court on Feb. 25, the lawsuit argued that the state’s Public Service Commission (PSC) should stick to “regulating monopoly utility companies” and not overstep its power by “illegally” interfering with private choices of families and businesses.

MREA’s litigation challenged PSC guidance documents that the group alleged discourage third-party financing for on-site solar. The group said such financing, which includes long-term leases and power purchase agreements (PPAs), helps make solar more attractive for customers who cannot afford to buy solar installations outright.

…many solar companies deem it risky that regulators will interfere with their business and block the sale of a project’s power to a customer.

According to the lawsuit, those guidance documents incorrectly assert that private solar arrays built with third-party financing constitutes a “public utility” subject to PSC regulation. It also said the PSC has not clarified the legality of third-party financing in the state.

Because of the uncertainty, the lawsuit added, many solar companies deem it risky that regulators will interfere with their business and block the sale of a project’s power to a customer.

MREA’s lawsuit also challenged guidance related to demand response incentives. The lawsuit is available here.

A PSC spokesperson told pv magazine USA that, although the commission is aware of the lawsuit, it does not comment on pending litigation.

Stalled solar pilot

In its lawsuit, MREA said that it hopes to build at least three 20 kW solar projects at Milwaukee-area public schools under a pilot program funded by the Couillard Solar Foundation. MREA would handle upfront costs and installation, and sell the energy under PPAs to host customers.

MREA said it hasn’t advanced the pilot program because the PSC’s documents assert that third-party financing constitutes prohibited public utility service.

MREA said that the State of Wisconsin has used third-party financing itself to obtain solar energy using contracts between the Department of Administration and outside financing entities. The contracts enable the state government to benefit from federal tax credits passed through the third party that the state could not otherwise receive.

Faulty guidance?

Third-party financing has been an ongoing issue in the state. MREA Executive Director Nick Hylla claimed Wisconsin utilities are using the “faulty” PSC guidance to limit energy options for ratepayers.

According to a local news report, We Energies previously denied a developer’s plans to install rooftop solar and connect it to the grid. A utility spokesperson reportedly said, “If anyone sells electricity to our customers, they should be viewed as a public utility and should be registered as such.”

David Bender, the Earthjustice attorney representing MREA, argued that the regulatory commission’s role is to protect customers from monopoly power, “not to protect utilities when their customers want cleaner and more cost-effective options.”

According to MREA, solar customers across most of the country are able to use third-party financing.

“We’re not asking for favorable treatment,” said Hylla. “We’re asking for fair treatment.”

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