Metro-East Living

Homeowners switch to solar to save money. Some cities’ fees cut into the savings.

Jeffrey Hebrank wants to install solar panels on his Highland home to take advantage of federal, state and regional incentives that have created something of a solar boom in Illinois.

But a city fee of $25 a month would reduce the savings on his power bill and extend the time it would take to recoup his investment.

”Highland owns its own municipal power plant, so they don’t want us to install solar panels and generate our own electricity because they would lose money,” said Hebrank, an Edwardsville attorney. “In essence, Highland is anti-solar.”

Not true, according to George Stram, Highland’s electric operations supervisor.

The “net-metering” fee helps the city maintain the infrastructure that homes and businesses with solar panels need to import electricity when they’re not generating enough — at night or on cloudy days — and to export it when they’re generating more than enough, he said.

”We still have to maintain all the infrastructure to the house, as if they didn’t have solar panels, so the fee is designed to help offset that cost,” Stram said.

Mascoutah, which also operates its own electric system, has instituted the same $25 monthly fee for electric customers with solar panels.

Few utilities in the United States charge net-metering fees, said Brad Klein, senior attorney for the Environmental Law & Policy Center, a nonprofit environmental-advocacy organization based in Chicago.

“When they’ve been tried, they have frequently been struck down by regulators and in the courts,” he said. “And the reason is, they have not found the data to support the utility’s argument that the fees represent the additional costs that they incur to serve solar customers. In other words, they haven’t been able to prove that these fees are fair.”

Six towns in the power business

Highland is one of six metro-east municipalities that own and operate their own electric systems. The others are Mascoutah, Freeburg, Breese, Red Bud and Waterloo.

All buy power in bulk through an umbrella group called the Illinois Municipal Electric Agency, which has 32 members across the state.

”Each unit of local government has set up a different rate structure,” said Staci Wilson, IMEA director of government affairs. “Each one approaches it differently.”

Residents of other metro-east communities and rural areas get power from Ameren, a private company regulated by the state, or through rural cooperatives.

Ameren and Commonwealth Edison, the other regulated utility in Illinois, can’t charge net-metering fees, and they must give customers with solar panels full-value energy credits for any extra electricity they may produce. Whatever customers add to the grid, they get the same amount of power back at no charge when they need it.

”Municipal and rural electric cooperatives are not regulated by the state, so they can set their rates and structures how they want,” said Anthony Star, director of the Illinois Power Agency, an independent state agency that provides oversight for regulated utilities.

There are advantages to municipal electric systems, according to Freeburg Village Administrator Tony Funderburg. One is that during a power outage, workers can often get problems fixed faster than giant utilities responsible for an entire region, he said.

Two charge net-metering fees

A tiny percentage of metro-east homeowners have installed solar panels, and that includes those in the six municipalities with their own electric systems.

According to city and village officials, Highland has less than 10 customers who generate electricity with solar; Freeburg and Breese each have less than five; Mascoutah has two; Red Bud and Waterloo each have one.

“We have one customer that has solar, and that’s Gibault High School,” said Waterloo Director of Public Works Tim Birk. “And they’re doing just enough for a couple of lights in the greenhouse. It’s mainly a teaching tool. They’re not pushing out any electricity.”

Highland and Mascoutah are the only two of the six municipalities that charge net-metering fees.

They also are the only two that give full-value energy credits when customers with solar panels generate extra electricity and export it to the local power grid.

“We give 100 percent back of what (customers are) selling us,” said Mascoutah Utility Billing Clerk Kim Stambaugh. “We do have a cut-off in March or April, so what they have left at that time gets wiped out.”

Full-value energy credits are financially beneficial for customers with solar panels who generate more electricity than they need at times, but that isn’t feasible for some homes and businesses. Many people are just trying to offset a portion of their utility bills with solar each month.

Most give partial energy credits

Red Bud has no provision to give energy credits to customers with solar panels that generate more electricity than they need, although City Superintendent Josh Eckart expects the city to revisit its 2013 ordinance soon.

In Freeburg, customers buy electricity at a retail price of about 12 cents per kilowatt-hour. Those with solar panels who export power to the local grid get partial or “wholesale” credits worth about 8 cents per kilowatt-hour.

“I think our board came up with a policy that’s best for our residents and the community at large,” Funderburg said. “I think it’s fair. We put a lot of time and energy into it.”

Waterloo also gives wholesale credits. Breese gives credits worth 50 percent of the city’s retail price of about 11 cents per kilowatt-hour.

Plant Operation Manager Dale Detmer said Breese learned from the experiences of other cities that initially gave full-value energy credits without charging net-metering fees and had to make changes to keep regular customers from subsidizing solar customers who weren’t paying their share of infrastructure costs.

“If people could be completely solar, that would be great,” Funderburg said. “But that’s not going to happen. There are weeks when you don’t get sun.”

Detmer said it can be misleading to compare rate structures from municipality to municipality because there are so many variables.

Policies still are evolving

The federal government offers tax credits and the state of Illinois offers solar renewable energy credits for people who install solar panels. Madison and St. Clair county residents also are eligible for “Solarize Metro East,” a group-buy program that discounts installation costs. It ends Oct. 31.

The program’s public and private partners include StaightUp Solar, a company that designs and installs solar systems in Illinois and Missouri. It has held nearly 30 community information sessions since the beginning of May, but only one in Highland.

“It’s a hard sell,” said Natalie Lucas, solar support specialist manager, noting that a $25 monthly net-metering fee reduces the financial benefit of solar and can discourage some homeowners. “... You’re no longer looking at saving $100. You’re looking at saving $75.”

Klein said the Environmental Law & Policy Center’s goal is to make sure that policies related to solar power are transparent, understandable and stable so consumers can make the right choices for their families and be treated fairly.

Klein noted that municipal electric systems and rural cooperatives have been thrust into a complicated and rapidly changing energy world. He advises officials to take it slow, base decisions on solid data and follow the law, which prohibits discriminating against solar customers, he said.

“These smaller utilities don’t have a lot of staff, and they’re learning along with the rest of us,” Klein said. “They need time to evolve from a system where customers are only buying electricity to a system where they are also generating electricity.”