The court overturns the PSC’s decision that allowed the family to lease a solar energy system

Clean energy advocates say a recent court ruling is a setback for efforts to increase the use of residential solar energy in Wisconsin.

Last week, a Dane County court overturned a 2022 decision by the Public Service Commission that would have allowed the Stevens Point family to use third-party financing to install solar energy on their home.

Under that agreement, the family would lease the system from North Wind Renewable Energy Cooperative. Similar lease arrangements are common in other states, but utilities have opposed their use in Wisconsin, saying they are not allowed under existing state law.

According to North Wind founder Josh Stolzenburg, the Stevens Point family sold their home and did not move forward with the project.

Still, the Wisconsin Utilities Association challenged the PSC’s decision in Dane County Circuit Court last year.

Last Friday, the court sided with the utility and sent the issue back to the Public Service Commission. The court said the PSC misinterpreted what constitutes a “public utility” in its decision because it focused on the specific project and not North Wind’s operations as a whole.

State law defines a “public utility” as any entity that owns, operates, manages or controls equipment used for the “transmission, delivery or supply of heat, light, water or power, directly or indirectly, to or for the public.”

Utilities are largely opposed to third-party financing for solar installations, saying it violates state law by allowing installers to act as a utility without being regulated as such.

“We are pleased with the court’s decision that affirms our position that if you supply energy to the public, directly or indirectly, you must be regulated as a public utility,” said Bill Skewes, executive director of the Wisconsin Utilities Association. in an email.

But renewable energy advocates see the court’s decision as a major setback for Wisconsin homeowners looking for affordable clean energy.

In a statement, Will Kenworthy, regulatory director of the nonprofit Vote Solar, an intermediary in the Dane County lawsuit, said the ruling limits customers’ rights to manage their energy consumption and favors utilities’ profits.

“This is a violation of fundamental consumer rights and will exacerbate existing inequalities within our energy system, where financial barriers can prevent people from accessing clean energy solutions,” he said.

A spokesperson for the Public Service Commission declined to comment, saying the agency does not comment on pending litigation.

At least 29 other states allowed third-party financing for solar installations as of 2021, according to North Carolina State University’s NC Clean Energy Technology Center.

Chelsea Chandler, climate, energy and air program director for Clean Wisconsin, said the legality of outside financing for residential solar installations has long been ambiguous.

She said the PSC’s 2022 decision sought to bring some clarity to the rules, but that clarification has effectively been nullified by the recent court ruling.

Chandler also said that many low- to moderate-income families want to invest in rooftop solar, but the upfront costs are a major barrier. Allowing families to lease their system, she said, would make solar energy more accessible and affordable.

“Solar energy has a large payback period over time and can save residents money over the life of the panels,” she says. “But especially for people with a lower income, who do not have a lot of savings, it is impossible for some people to get that money.”

Chandler said low- and middle-income households in Wisconsin could get help installing solar energy through a $62.4 million grant the Biden administration awarded to the state on Earth Day. But she said it’s not the only solution.

“We still have very low overall penetration of rooftop solar in Wisconsin, and there is huge, huge untapped potential,” Chandler said.

The legal ambiguity of third-party financing in Wisconsin also hinders developers such as North Wind, Stolzenburg said.

He said there are nonprofits and households that would take advantage of third-party financing, but the ambiguity of the law prevents them from pursuing it.

Brad Klein, senior attorney at the Environmental Law & Policy Center, said his office is closely monitoring Dane County’s injunction and is considering an appeal. He said the company could take the case to the Wisconsin Court of Appeals or possibly the state Supreme Court.

“There are other measures that are beyond the scope of this specific case,” Klein said. “More petitions may be submitted to the committee based on different facts or legislative activity on this subject. I believe that this court decision is certainly not the last word on this issue.”