The Future of Solar in Wisconsin

This past November, the Wisconsin Public Service Commission voted to allow the state’s major utility, Wisconsin Energy to implement a fixed rate increase for of its customers as well as lower the credit for solar that customers receive. The increase is now the highest in the U.S. and will significantly hurt citizen’s property rights as well as slow the potential for increasing residential solar generation in the state as we begin the New Year.

This move by state regulators is only the most recent example of strangling the free market in the energy sector. Currently, Wisconsin provides monopoly protection for its electric utilities. This legal protection is a powerful form of subsidy provided by state law, and in Wisconsin, fully supported by a Republican controlled legislature. Yet this conflicts directly with what Republicans otherwise say about rejecting “subsidies” for energy.

When the Republican governed State of Wisconsin grants monopoly privileges by law to one industry especially a legal protection from free-market competition, then the Republicans are picking winners and losers.  This form of subsidy defies free market capitalism. Such excessive governmental regulatory restrictions prevent capitalism from functioning. 

Unlike other conservative states, Republican policy in Wisconsin requires you to pay for solar energy systems by paying 100 percent cash up front.  More affordable financing models like output- tied leasing and 3rd party non-utility PPAs are not allowed by law.  If a homeowner, church, school or business wants to lower their electric bill using such other forms of solar financing in Wisconsin, they don’t have a choice,  they can’t.  And if they try, they get sued by the electric utility, all supported by state law. The law requires them to pay more for electricity than they otherwise could.  That’s government interference in your private life.

In Wisconsin, it is hard to believe that these laws are Republican policy because they are neither Republican nor conservative. In fact, they are outdated policies leftover from previous Democratic controlled legislatures. These old laws work to trample on the property rights of Wisconsin electric utility customers.

In order for homeowners and businesses to have energy options, it is necessary to overturn these outdated energy policies. This newly established fixed rate increase is a blow not only to the state’s solar industry, preventing new jobs and lower energy costs for homeowners but to property rights as well. Instead as we start a new year, the Wisconsin Legislature needs to pass legislation that provides Wisconsin citizens with choices to finance solar energy as a way to help manage their energy costs and exercise their lawful property rights. This legislation would actually protect property rights and allow for the financing of solar energy through output leases or power purchase agreements.  It would overturn the picking of winners and losers and stop preventing a level playing field in what should otherwise be a free market system of capitalism in Wisconsin. 

Lead image: Wisconsin map via Shutterstock

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Lee Peterson is a licensed attorney and Senior Tax Manager for CohnReznick’s National Renewable Energy Practice. To date, Lee has been a critical tax advisor in over 10 billion dollars of renewable energy projects within the U.S. and its’ territories. He is responsible for thought-leadership and governmental affairs and his clients include the U.S. Department of Energy, Fortune 100 companies, state and local governments and domestic and foreign renewable energy project developers and manufacturers. Lee also advises the nation’s top financial institutions regarding their tax equity investment structures. Lee has published numerous articles in both the traditional and trade press, including, North American Windpower and Solar Industry magazine and he is regularly quoted in the media. Lee is also the author of numerous white papers on a wide range of critical renewable energy finance and tax topics and is a regular speaker at national professional education and industry events dealing with renewable energy policy, tax credit finance and federal and state tax policy. Lee volunteers hundreds of hours, pro bono, assisting non-profit renewable energy organizations, federal and state legislators as they seek to improve and implement new energy policies. For 10 years, Lee was an adjunct professor at Clayton State University and is a guest lecturer for the J. Mack Robinson MBA program at Georgia State University. Lee has also served as instructor for the State Bar of Georgia continuing legal education seminars.

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