By Frank Andorka, Senior Correspondent
The legislature giveth with one hand and seems poised to taketh away with the other hand from the Illinois renewable energy providers.
Despite a recent survey by CleanChoice Energy that shows 83% of Illinois residents want to have the choice of clean energy as an option to supply their homes and state-sponsored support under the Future Energy Jobs Act of 2016, action in the legislature later this week could diminish solar’s growth considerably if two amendments to SB 1531 are passed as part of the bill.
At issue is the idea of “automatic renewals,” a practice widely practiced by utilities to keep customers on board. For decades, this practice allowed customers to stay with utilities automatically unless they specifically sought to change their providers.
It keeps customer-acquisition costs low – renewals of existing customers are much less expensive than getting new customers. But an amendment to SB 1531 would end the practice for “alternatives suppliers” which, in the case of Illinois, means renewable energy providers.
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There are three significant problems that the amendment would engender in the renewable energy community:
Under the new rules, renewable energy providers appear to be singled out, meaning state-sponsored utility monopolies will not have to play under the same rules. This would have the actual effect of tilting the playing field in the direction of established utilities, who could make it easier for customers to stay with them through automatic renewals.
Renewable energy providers are operating on much tighter margins than state-sponsored utilities. Even if they were being forced to operate under the same rules, utilities have the financial wherewithal to absorb additional customer acquisition costs. Most renewable energy providers do not. Therefore, the playing field is again tilted in favor of the established providers and against newcomers like solar companies.
Finally, the new rules would clearly cause problems for the newly created community solar companies ready to take advantage of the promised state support under the Future Energy Jobs Act. One of the challenges community solar providers have is the necessity for long contracts (think 25-year PPAs as an example). That’s often a much longer commitment than most community solar customers want to make. To entice them, many community solar providers will shorten the commitment to one or two years, using automatic renewals as the way to get that longer-term commitment once customers decide they are satisfied with their service. If you remove automatic renewals from community solar installations, those companies are back to arguing over 25-year commitments and frustrated consumers throwing up their hands and sticking with their traditional utility providers.
Ultimately, this is an underhanded way for utilities to keep the field tilted in their direction, and it’s one solar advocates should work to stop.
We’ll be discussing this and other issues concerning the Illinois solar market at our upcoming SolarWakeup Live! event in Chicago on June 21. Tickets are going fast, so reserve your spot now.
More:
CleanChoice Energy poll finds majority of Illinois residents want clean energy option
