GOSHEN — The slowing gain of jobs in the Indiana solar power industry is being viewed as a one-time occurrence for a segment of the economy that has been thriving.
One of the industry’s advocacy organizations, The Solar Foundation based in Washington, D.C., reported March 28 that Indiana had 2,775 jobs tied to the solar power industry in 2017. That total was just 75 more jobs than 2016’s total. The gain was also a fraction of the 1,133 new jobs that flowed into the industry from 2015 to 2016.
Even with the slowing job growth, Indiana bucked the national trend of solar industry job losses. The foundation reported there were 9,806 fewer solar industry jobs nationwide in 2017 than in 2016. Yet, there were still 250,271 jobs tied to nation’s solar industry in 2017, a significant gain over 208,859 jobs in 2015.
So why the one-year glitch?
“We are really looking at three reasons,” said Ed Gilliland, senior director at the foundation.
First, a large amount of solar installations started in 2015 but were not completed until 2016, which boosted the need for workers.
Second, uncertainty over solar power policies in some states, including California, the largest consumer of solar power.
And third, concerns about 30-percent tariffs on imported solar panels, which President Donald Trump announced as reality in January of this year.
“These are the several factors that turned the market from its rapid growth to the 3.8 percent decline," Gilliland explained.
INDIANA RATE CHANGE
In 2017, the Indiana General Assembly passed Senate Bill 309, which started the clock ticking toward a reduction in the rates paid by utility companies through net metering in Indiana. Net metering is the process by which homeowners and businesses sell excess electricity from their solar or wind-powered energy systems at retail rates to utility companies and obtain credits in return.
A May 3, 2017 article in the Fort Wayne Journal Gazette stated Senate Bill 309 provides that those who install solar or wind systems during the next five years will receive the full retail rate for up to 15 years. After 2022, small-scale producers will receive a lower wholesale rate and a 25 percent premium.
According to Leah Thill of the South Bend-based regional planning agency Michiana Council of Governments for northern Indiana, owners of solar systems will receive net metering credits from utilities until July 1, 2032 if the systems are installed before July 1, 2022. But Senate Bill 309 means that the payback period for such systems is shrinking as time moves forward.
The return on investment for solar systems ranges from 9 to 14 years, Thill estimated.
As environmental planner for MACOG, Thill helped create teams of solar power advocates in South Bend and Goshen. That effort resulted in 97 new solar projects, she said. Most of those installations occurred in 2017 after Senate Bill 309 was approved and 21 of those installations are expected to occur this year.
Even with the dwindling net metering payback looming, Thill said many people were willing to install their personal solar power system because of the economics involved.
“There was a lot of interest in solar, but many people didn’t realize how much the cost had fallen in the last seven years,” she said.
The cost of solar panel installations has fallen 60 to 70 percent in Indiana during those years, according to Thill, and at the same time the efficiency of solar panels has increased.
“So you can produce more energy out of a smaller area of solar panels and you can do it more efficiently at a lower cost,” she said.
Northern Indiana Public Service Co. was one of the state's utility companies that supported the net-metering change.
"NIPSCO supported the Senate bill to develop a legal framework around the size and price of net-metering and to develop certainty around the future of net-metering policy," said NIPSCO spokesperson Denise Rodriguez. "The bill also worked to balance the interests of non-participating customers who subsidize the cost of those who do participate."
So far this year, applications for joining the company's net-meter program are ahead of the past two first quarters, Rodriguez said.
"There has been a decrease in the number of applications as compared to the fourth quarter of 2017; however, there have been more applications received in the last three months than in the first quarter of 2015, 2016 or 2017," she said.
In addition to the net-metering, which gives credit to energy producers, Rodriguez said, "We offer a Feed-in Tariff (FIT) program that buys back the amount of energy in the form a check to customers. Today, we have about 270 customers participating in those two programs (150 net metering, 120 FIT) out of nearly 460,000 total electric customers."
The total net metering generation equates to 0.33 percent of the company's generating capacity based on 2017's total system peak demand, she added.
A BIGGER PROJECT
Glenn Gilbert has his own small home solar system that occasionally produces enough electricity to sell to Northern Indiana Public Service Co. through net metering. Now, as director of facilities at Goshen College, he is in charge of a $400,000 project to install solar panels atop the college’s Recreation & Fitness Center. That 924-panel solar array is expected to produce 277 kilowatts of electricity.
“At peak performance it might provide 25 percent (of the college’s power need). But of course at night it doesn’t provide anything,” Gilbert said. “When you spread the math out, it probably provides 7 to 8 percent of our load.”
And none of the electricity produced will be sold to a utility company.
“We will consume it as fast as we make it,” he said.
The solar array is just the latest effort the college has made to reduce its energy consumption. Buildings have been renovated with energy-saving light systems and the vast expanse of green lawns in front of dorms and education buildings have been replaced with mini-prairies that feature native plants.
“We have done a lot of energy conservation,” he said. I have said for a lot of years it doesn’t make sense to manufacture expensive electricity and then waste it.”
That effort has saved the college a lot of money. Gilbert said the energy bill for the campus in 2017 was as low as it was in 1991.
“That was with 60 percent more square footage (of buildings),” he said. “So now I feel like we are at a good point where we did the hard work of conservation and it is easier to justify the investment in solar.”
SOLAR IS BUSINESS
Phil Roberts, owner of One Planet Solar Inc. in Terre Haute, said the passage of Senate Bill 309 has garnered attention from consumers
“Homeowners are inquiring about that,” Roberts said. “They want to know exactly how Senate Bill 309 will impact their decisions going forward.”
The bill has not yet had a financial impact on Hoosiers buying solar systems, according to Roberts, because he said the return on the investment in solar is under 10 years because of efficiencies and durability of the newest systems.
But he decried the adoption of Senate Bill 309, saying the “brotherhood of coal” in the state lobbied the General Assembly for the law.
“We get certain politicians that will put out a bill that will set us back about 30 years, and that is like Senate Bill 309,” Roberts said.
But he remains an optimist when it comes to the public embracing solar energy systems for homes and businesses.
He said his company installed more than 100 such systems in 2017 and he is seeing a gain already this year.
“If anything, they (installations) are going up,” he said, “because homeowners understand Senate Bill 309 has gone through and it is important for them to be grandfathered in the 15 years of net metering.”
Looking into the future, Roberts believes the state’s solar energy industry will be OK, even with Senate Bill 309’s net metering rate reduction looming.
“It is stepping back 20 years for the state of Indiana,” he said. “No matter what I think... we will prevail and keep on keeping on.”
Like Roberts, Gilliland and Gilbert believe solar energy production will gain ground in the years to come.
“We still believe that it is a strong, dynamic industry,” Gilliland said. “There may be some headwinds again this year, but longer term we are very positive for the outlook of the industry.”
He said consumers are now becoming interested in off-grid battery storage systems because of advances in battery technology and declining prices.
Gilbert believes the state’s solar industry will be able to overcome the change in net metering rules.
“While I think it is unfortunate and a bit regressive, I don’t think it is the end of the industry at all,” Gilbert said. “Unfortunately they discouraged solar in a time when it is so important that we come up with clean alternatives. I think its (Senate Bill 309) impact will be minimal because I think ultimately we will continue to find ways to take advantage of solar.”
Roger Schneider can be reached at firstname.lastname@example.org or 574-533-2151, ext. 309. Follow Roger on Facebook and also on Twitter @rschneider_TGN