December 01, 2022
MADISON – In a victory for both common sense and the environment, the Public Service Commission of Wisconsin on Thursday agreed that a family of four in Stevens Point can use a financing method called “third-party ownership” to install rooftop solar panels.
In third-party ownership, a third party – usually the solar installer – pays the up-front installation costs for a homeowner or business to install solar arrays to serve their personal energy needs. The customer then pays for the system over time, the same way they would finance a car or other home improvement.
There is no rule against this form of financing in Wisconsin and the entire system would be located on the family’s private property. However, the family’s gas and power utility, the Wisconsin Public Service Corporation (WPS), has fought the plan, alleging that the small solar project is a competing utility, violating WPS’ state-granted monopoly.
Energy utilities across Wisconsin have adopted this same spurious argument against third-party ownership projects in their territories.
“Rooftop solar is a proven tool to keep bills affordable, spur our clean energy economy, and reduce our reliance on polluting fossil fuels,” said Will Kenworthy, Midwest Regional Director at Vote Solar. “Utilities should be working to expand solar access – not seeking out flimsy legal loopholes to prevent it. We’re thrilled to see the commission make the right choice for this family, and hope the state will continue to build on this momentum by affirming that third-party financing is an option for all Wisconsinites.”
Third-party ownership removes one of the major barriers to installing renewables – the up-front costs. This makes it popular with moderate-income families like the one represented in the petition, who want to save money on their power bills while benefiting the environment. The family has two children between 14 and 17, and are looking to manage their expenses as college nears.
The family contracted with Wisconsin-based North Wind Renewable Energy Cooperative to install the solar panels and related components to connect “behind” the point of interconnection with the grid. It will only provide power to the family on their property, highlighting the inaccuracy of WPS’ argument that this small panel setup is a competing utility. The family will remain WPS customers, still subject to all of the charges and taxes applied to every other residential customer.
“As others observed during the proceeding, the utility position that two homes with the same equipment, installed the same way, connected to the same utility – with absolutely no functional difference – should be categorized differently simply because of the way the system is financed defies logic and common sense,” said attorney Tim Lindl of Keyes & Fox LLP.
Third-party ownership is used by families, businesses and nonprofits across the nation, including in neighboring Illinois, Iowa, Michigan and Minnesota. By allowing families to pay off their solar panels over time, it removes the up-front costs of installation, a major financial barrier that keeps middle-income and low-income families from adopting renewable power.
It is also popular among churches, schools, community centers and other tax-exempt nonprofits and government bodies. In a third-party ownership arrangement, the group that owns the panels can apply for federal and state tax benefits designed to speed the nation’s transition to renewable power. These benefits lower the project’s costs, but haven’t been available to the tax-exempt churches and schools.
“You can finance a car. You can finance a refrigerator. It’s just common sense that you should be able to finance home solar,” said Environmental Law & Policy Center Staff Attorney Erica McConnell. “But unlike cars or refrigerators, home renewables have climate benefits that extend far beyond the families that invest in them. Third-party financing helps get more renewable power on the grid fast, reliably and safely.”
A second petition, filed by the Midwest Renewable Energy Association (MREA), is currently before the commission, with a decision expected before the end of the year.
As the Stevens Point family is a member of Vote Solar, the organization brought their petition to the PSCW. Vote Solar was represented by the Environmental Law & Policy Center and Keyes & Fox LLP.