Popularity Of Solar Rebates Pushes Program’s Limits

Vaughn Prost, CEO of Missouri Solar Applications, displays the solar array his company installed for Grace Episcopal Church in Jefferson City. Prost started his work in the solar industry in California but moved back to his Missouri home. | Photo by Meredith Turk
Vaughn Prost, CEO of Missouri Solar Applications, displays the solar array his company installed for Grace Episcopal Church in Jefferson City. Prost started his work in the solar industry in California but moved back to his Missouri home. | Photo by Meredith Turk

Ameren Missouri’s solar rebates are expected to last through the end of the year, thanks to a ruling by state regulators, but Kansas City Power and Light this week reached its limit on solar rebates in the surrounding rural areas.

Vaughn Prost, the CEO of Missouri Solar Applications in Jefferson City and a board member of the Missouri Solar Industry Association, said the rebate allowance set for Ameren by the Public Service Commission is OK for now, although Prost said it was less than expected. They said the industry will have to fight hard for rebate funding during the General Assembly session that begins in January.

An agreement reached last week between Ameren, the PSC and solar industry representatives established a $92 million cap on solar energy rebates in Ameren’s service area. As of Oct. 31, Ameren had paid almost $22 million in solar rebates and was processing another $20 million worth, leaving about $50 million to pay out. Ameren lawyer Wendy Tatro told commissioners that the remaining funds “should get us into 2015,” according to a St. Louis Post-Dispatch report.

In September, Ameren asked the PSC for permission to suspend payment of solar rebates, which proved to be more popular than anticipated. The public utility company claimed it was reaching what’s known as the 1 percent rate impact. Under the renewable energy policy previously negotiated between Ameren and the PSC, rebates paid by the utility must not raise the cost of providing electricity to a service area by more than 1 percent.

Several proponents of renewable energy and solar companies disagreed with Ameren’s request to suspend solar rebates.

Brightergy, a solar company based in Kansas City, the Missouri Solar Industry Association and Renew Missouri all filed testimonies that there was “insufficient accurate and reliable information for Ameren Missouri” to calculate the 1 percent impact.

Prost said Ameren would have to pay out about $300 million in rebates to have that level of impact on rates.

The signed agreement, however, does not establish how the 1 percent rate impact will be calculated. Prost said one question remains unanswered: How much of the rebate pool of money will be allocated to wind energy projects before the rate impact level is reached?

Photo Courtesy of Ameren
Photo Courtesy of Ameren

The $92 million cap set by the PSC is only for Ameren’s solar rebates, so other rebates could go towards renewable energy projects from its service area using wind power.

Prost said this is an unfair breakdown of rebates. He argued more rebates should be dedicated to an industry that he said actually contributes to the state’s overall economy.

“We are actually creating solar energy in Missouri,” he said. “And that translates into jobs and economic development for Missouri. Utility companies are mainly buying their wind energy from outside of Missouri like Kansas, Illinois and Iowa.”

Missouri’s solar energy industry has grown since 2008, when voters passed Proposition C, which required public utilities to get 15 percent of their power from renewable energy sources by 2010. Of the 15 percent, at least 2 percent must come from solar power.

The Missouri Solar Industry Association doesn’t track the total number of solar panels installed in Missouri. But it reported that employment among its members has more than doubled since 2011, from 150 to 350 this year. In 2010, Missouri had 1,205 jobs in the solar photovoltaics industry, the sixth-highest in the country, according to a 2011 Brookings Institution report.

Since Kansas City Power & Light started the rebates, more than 750 rooftop solar systems have been constructed in the region, and there are now at least 10 solar companies doing business in Kansas City, according to Renew Missouri, a renewable energy advocacy organization.

Prost started his company in Missouri after working for decades in California’s solar industry. He has been pleased with the growth of the solar industry market in Missouri, but thinks that it could grow faster with higher rebate levels.

Aside from this particular agreement with Ameren, solar rebates are drying up in other regions of Missouri.

In an email to solar stakeholders, KCP&L wrote, “We have received more than enough solar applications over the past few days that have caused us to exceed the $50 million solar rebate limit for the KCP&L Greater Missouri Operations Company (GMO) service territory.”

KCP&L also wrote it is almost halfway to reaching solar rebate limits in its other Missouri service territory. The utility has received more than $18 million in solar rebate applications currently for that area, and its rebate cap is $36.5 million.

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