Illuminating pact shines ray of hope on Iowa’s solar industry

School House Apartments in Fort Madison has solar arrays. A bill that passed the Iowa Legislature would encourage private solar energy developments. (Photo courtesy of the Iowa Environmental Council)

Iowa’s solar energy industry would get a big boost if the governor signs a bill that resulted from eight months of negotiations, backers said this week. 

Senate File 583 allows private owners of solar arrays to continue to get the retail rate for the extra power they generate and sell to their utility. But it also sets up a future independent study of the costs and benefits of solar energy, in part to make sure the industry is paying its fair share of the transmission system costs.

The Iowa Utilities Board will set the specific rules for what some dubbed the Solar Act. 

Iowa Sen. Eric Giddens is a Democrat from Cedar Falls. (Photo courtesy of Iowa Senate)

The House and Senate both passed the bill unanimously this week. Backers anticipate Gov. Kim Reynolds will sign the legislation. Reynolds spokesman Pat Garrett did not immediately respond to an email seeking comment. 

An economic plus?

“This is good legislation,” Sen. Eric Giddens, D-Cedar Falls, said during Wednesday’s debate. “It’s good for our economy. It’s good for the environment. It’s good for the people of Iowa.”

Giddens, who called last year’s version “flawed,” said the compromise bill was will make solar installations cheaper and reduce the amount of fossil fuels used in Iowa.

Iowa Sen. Michael Breitbach is a Republican from Strawberry Point. (Photo courtesy of Iowa Senate)

Floor manager Sen. Michael Breitbach, R-Manchester, said the bill will tell current solar array owners, who were grandfathered into the bill, and those considering an installation what to expect when they go to sell their excess power.

The clouds that formed last year

MidAmerican Energy set off one of the nastier environmental fights of the session last year with its original proposal for the bill, which passed the Senate but stalled in the House.

The utility wanted to charge a fee to cover solar-panel owners’ share of the cost of transmission lines. Critics, including the state’s largest environmental nonprofits, at the time said the move would kill the state’s budding solar energy industry.

Last year, some critics said privately they thought MidAmerican wanted to protect its own interests because it plans to develop solar energy on its own to complement its massive wind energy holdings.

Iowa City is reviewing MidAmerican’s $6 million plan for 10,000 solar panels near Interstate Highway 80 and the Iowa River in what would be its first foray into commercial grade solar installations, MidAmerican Energy spokesman Geoff Greenwood said Friday. That development would provide power equal to a bit more than one commercial grade wind turbine. 

The biggest debate was over whether Iowans would be allowed to generate their own power, or part of it, and be paid fairly for any extra electricity sent back to the grid. The stakeholders also battled over whether the proposed fee for transmission costs was fair.

MidAmerican Energy contended that without the special transmission fee, those without solar arrays would be subsidizing other people’s solar installations.

Solar industry poised for expansion?

Kerri Johannsen, energy program director for the nonprofit Iowa Environmental Council, said the new version of the bill would expand the solar industry while addressing MidAmerican’s concerns about costs.

“This is really a great piece of legislation for solar energy in Iowa,” Johannsen said. “This will allow solar to grow.”

Kerri Johannsen is energy policy director, Iowa Environmental Council. (Photo courtesy of Iowa Environmental Council)

The Iowa Environmental Council reports that Iowa has 110 MW of solar. Most of that is at homes, farms and businesses. Utility-scale projects in Louisa, Mitchell, and Howard counties will increase that to nearly 1,000 megawatts.

“I would not have predicted this a year ago,” Johannsen said of the bill. This showed that MidAmerican was willing to come to the table and work on a policy. It allows them to have certainty” on the regulatory climate, Johannsen added.

Currently, 1% of major utilities’ customers have solar panels, wind turbines, or another form of renewable energy. Under the amended bill,  when that figure reaches 5%, or July 2027 arrives, whichever is sooner, the Iowa Utilities Board will arrange a third-party review of the costs and benefits of solar in Iowa to inform future rate discussions. That would include the transmission systems.

MidAmerican Energy supported the new bill, while Alliant Energy registered as “undecided” in lobbyist declarations. The bill only applies to those rate-regulated utilities now. The amended bill doesn’t affect municipal utilities and similar operations. 

MidAmerican praises deal

Greenwood, the MidAmerican spokesman, praised the pact with environmentalists, pork producers and others who opposed the original approach that was sidelined last year.

“We’re pleased with the strong, bipartisan outcome in the Iowa Legislature to support this bill, which meets the common goals of all stakeholder groups,” Greenwood said. “Those goals include supporting all forms of renewable energy, fairly valuing the customer-owned solar energy that benefits all customers while keeping rates affordable, and maintaining a strong and safe grid that supports energy delivery to all customers.”

Josh Mandelbaum is a senior attorney for the Environmental Law & Policy Center. (Photo courtesy of Environmental Law & Policy Center)

Josh Mandelbaum, a senior attorney for the Environmental Law & Policy Center, said negotiations started almost immediately after last year’s session. He credited all parties for keeping the debate going until the bill was amended to everyone’s liking.

“The bill provides everyone with certainty that they need going forward,” Mandelbaum said. “It provides certainty to solar customers, installers and the utilities.”

Mandelbaum added: “Everyone can live this bill and it allows the solar industry in the state to grow and thrive.”

Pork producers in on the agreement

Drew Mogler, public policy director for the Iowa Pork Producers Association, which opposed last year’s bill, said his organization endorsed this year’s legislation. Hog farmers have increased used of solar panels, especially as some have added powered ventilation systems.

“We are looking to protect those folks who have put up panels in the past, and we are after predictability and certainty for folks that want to install panels on their farms,” Mogler said. “With the emphasis on sustainability, solar is a good way to lessen the farms’ carbon footprints.”

Groups release report on siting solar installations

The Iowa Environmental Council and Center for Rural Affairs have published a guide for counties developing utility-scale solar siting ordinances. 

“Utility-scale solar and community solar projects are just taking off in Iowa, so direct experience here is limited. We want to encourage counties to take a look at best practices for solar siting that are working around the Midwest,” Jordan Oster of the Iowa Environmental Council’s energy staff said in a statement. “Having a good ordinance developed through a public process can provide the certainty necessary to bring the economic benefits of solar to a county while balancing the interests of residents.”

The report encourages municipalities to plant native vegetation around the installations for habitat.