Solar industry responds to rebate verdict

For residential and commercial installers of solar-energy systems, a Feb. 10 Missouri Supreme Court decision could spur additional work this year.

Empire District Electric Co. (NYSE: EDE) customers in southwest Missouri are in line for solar rebates, following a 5-2 court ruling that determined the Joplin-based utility was no longer exempt from renewable standards passed seven years ago in Proposition C.

The court decision is viewed as a hard-fought victory for renewable-energy advocates.

“It’s going to make this a no-brainer for all businesses in the Empire territory that have the sun falling on their roofs,” said P.J. Wilson, director of Columbia-based renewable-energy advocate Renew Missouri.

With the state’s third-largest investor-owned utility now forced into the solar rebate game, Empire District Electric customers in pockets between Joplin to Ozark should soon be able to get rebates on solar equipment equivalent to roughly half the cost of the systems. Wilson said about one in four commercial and residential properties have south-facing roofs that aren’t shaded and would be good candidates for solar installation.

In Springfield, Skywire Electrical Systems LLC owner James Bartley said he expected his solar business to pick up in 2015 without the Empire rebates due to his goals to more closely focus on that side of the business.

Once rebates are in place, solar could triple or more compared to the handful of installations the company managed in the area in 2014. Solar installations typically generate revenues between $15,000 and $25,000, he said.

“Solar has gotten to the point where it just makes sense,” he said, noting the average conversion cost is between $3 and $4 per watt and most of his jobs range between 4,000 and 8,000 watts.

A federal rebate of 30 percent currently exists, meaning most homeowners and business owners can expect lower utility bills to pay back their investment in less than 10 years. With the state rebate set at $1.50 per watt through the end of June and $1 per watt the next year – a 2013 law is phasing out rebates – consumers can save over 50 percent off of what they would pay otherwise, for now.

The Empire verdict
The Missouri Supreme Court ruling this month said the exemption Empire officials had been claiming – which stems from a law passed in the waning hours of the 2008 general session – was invalidated by Proposition C, approved by voters in November of that year. Two-thirds of voters approved the measure that requires investor-owned utilities to increase their dependence on renewable sources, part of which stipulated that 2 percent of their energy generation is from solar sources.

In May 2008, the Missouri General Assembly passed Senate Bill 1181, which stated a utility company could become exempt from solar rebate requirements, if it achieved an amount of renewable energy more than 15 percent of its “total owned fossil-fired generating capacity.” According to the court filing, Empire was the only utility company to claim eligibility for the exemption.

The court’s decision gave plaintiffs Renew Missouri and the Missouri Coalition for the Environment a win in their appeal from the Missouri Public Service Commission.

According to the opinion, the law Empire clung to in its defense wasn’t enough.

“The legislature could not pre-emptively negate the effect of the initiative before it had even been voted on by the people,” the opinion reads.

However, Empire is waiting to see if further action could negate a need to offer rebates.

“We are reviewing the court’s decision to determine our next steps,” a company statement provided by spokeswoman Amy Bass reads. “It is our understanding that the decision will not be final for at least 15 days. Thereafter, the matter may return to the Missouri Public Service Commission for further action related to the underlying PSC case. This process will likely take several months.”

Wilson said he doesn’t see any way around the high court’s decision.

“It was a 5-2 ruling and there are no questions about it,” Wilson said. “It is a direct order from the Missouri Supreme Court for Empire to start paying solar rebates and for the PSC to enforce (the ruling).”

Bass said it’s unknown whether the company would be required to pay out a settlement to customers.

Wilson suspected up to 10 Empire customers could have been eligible for solar rebates. A PSC spokesman could not be reached by deadline.

Wilson said the outcome also could influence the solar-energy programs of other southwest Missouri utility companies. City Utilities of Springfield, for instance, is not required by Prop C to offer the state solar incentive.

“We hope there is some indirect pressure on both City Utilities and the rural electrical co-ops that are all around Empire’s territory because you’re going to see solar companies marketing very quickly … that Empire is offering solar rebates,” he said.

Cara Shaefer, director of energy services and renewables at CU, said the public utility doesn’t foresee solar rebates anytime soon because it doesn’t want to pass along the associated costs.

“Even though the cost of solar panels has come down significantly over the past few years, it still doesn’t look to be a cost-effective improvement from the utilities’ standpoint,” Shaefer said.  

Emerging solar markets
While times could be good in the short term for area solar installers, such as Skywire, Houston-based Missouri Sun Solar and Joplin-based Ozark Energy Services Inc., the rebate clock is ticking.

Two years ago, state lawmakers passed House Bill 142 to incrementally reduce utilities’ obligations for rebates until they are eliminated in 2020. Also, the bill caps the pool of total rebates at “1 percent of the average retail rate increase.”

For Kansas City Power & Light, the cap equates to $36.5 million in the Show-Me State, according to KCPL.com.

Ozark Energy Services owner Travis Creswell said his company has averaged only three or four solar jobs per year. He mainly provides electrical services, such as commercial lighting upgrades, in the Joplin area.

“It can only be good news for me,” he said of the rebate ruling, noting he’s going to wait to market an EDE rebate until he has assurances customers would receive them.

Heidi Schoen, executive director of the Missouri Solar Energy Industries Association, said the trade group only had 10 members when she came on board in 2010, and it now has over 70 with the vast majority of those coming from the Kansas City and St. Louis areas. She said rebates are helping to create a budding solar installation industry in Missouri – around 40 companies and at least 2,800 workers – and the ruling should help grow the market in southwest Missouri.

“The solar rebates are supposed to help an emerging market and southwest Missouri has not had the big boom that Kansas City and St. Louis has,” she said.