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Loss Of Rebate Clouds Missouri's Solar Industry

Stephanie Zimmerman, St. Louis Public Radio
Microgrid Solar installer prepare to put panels on an O'Fallon, Missouri home.

Those in Missouri’s solar industry are losing their sunny outlook.

A combination of lower solar equipment costs, a federal tax incentive, and an attractive state-mandated rebate pushed sales through the roof in 2013. The solar industry reported an additional 1,700 jobs in the state.

Missouri even ranked in the Top Ten State for Clean Energy Job Announcements by the national group Environmental Entrepreneurs.

But that was last year.

The switch flipped when Missouri’s two biggest investor-owned utilities announced they could no longer pay the rebate for solar installations.

The rebate of $2 per watt made a big difference in the cost of installing solar energy systems, with utilities paying up to 25 kilowatts or $50,000 per installation.

The rebate program came out of Proposition C, the 2008 voter-approved mandate that requires investor-owned utilities to get some of their power from renewable energy, including 2 percent from solar. The legislation stipulated that if meeting those standards leads to rate hikes for customers of more than 1 percent, then the utilities can back off.

Kansas City Power & Light announced last July that the rebate's costs had pushed it to the 1 percent cap. In October, AmerenMissouri filed with the Missouri regulatory body saying the same that it, too had met the cap.

Credit AmerenMissouri
AmerenMissouri reached the $91.9 million dollar limit for solar rebates on Dec. 17, 2013. Applications remain in queue if another project falls through.

Bill Barbieri, director of renewable energy strategy for AmerenMissouri, said even before the cap was met, the company’s 1.2 million customers were paying for the 1,500 customers who chose to get solar installed.

"All of these rebate dollars get put into rates. All customers pay for this," he said. "So if you have a solar system on your home and your neighbor doesn't, your neighbor is paying the cost of (installing) your solar system."

AmerenMissouri reached a settlement with the solar industry and the Missouri Public Service Commission in November that it would pay a total of $91.9 million in rebates. The company had paid $42 million in rebates at that point. It reached the rest of the cap by mid- December, as customers rushed to get in on the rebate. Applications since then have been put in a queue in case another project falls through, but all installations must be completed by June 30.

Thousands of Jobs

The Missouri Solar Energy Industries Association said if the rebate had stayed in place then by the end of this year the solar industry would have added a total of $415 million to the state’s economy and more than 3,700 jobs.

Credit Institute for Local Self-Reliance
A study commissioned by MOSEIA found the state would add another 1,660 jobs if the rebate continues.

"These are people going to Schnucks and Dierbergs and buying their Fourth of July picnics," MOSEIA executive director Heidi Schoen said. "These are people who live here and work here and they pay taxes here."

Now, Schoen said, thousands of jobs will be lost instead.

What galls her is that MOSEIA had worked with both Ameren and Kansas City Power & Light to ensure that the cap would not be reached. Just last spring legislation passed through the Missouri General Assembly to step down the rebate until it was zeroed out in 2020.

Schoen says such a phase-out would have created market certainty and gotten the solar industry to a place where it could thrive on its own.

Credit Institute for Local Self-Reliance
Legislation passed last year, and supported by the solar industry, would have phased out the rebate by 2020.

"We never wanted to create an industry that depended on incentives," she said.

MOSEIA is working to get the rebate reinstated through new legislation. Several bills have been proposed but none have moved out of committee.

The Solar Coaster

At its peak last year, Microgrid Solar in Clayton had a staff of 75. The company has done several high-profile solar installations, including on Busch Stadium.

Founder and CEO Rick Hunter said for now his installers are working on projects that came in during the last days of the rebate. But come July 1, if the rebate doesn’t return, he may have to lay off up to half of his employees, he said.

"If we had known just how much uncertainty there was, there’s no way would have hired all the people we hired over last summer and early fall. There was no expectation that there would be this switch," Hunter said.

Microgrid will be able to survive what Hunter calls the “solar coaster” of policy ups and downs. The company works in eight other states as well as the Caribbean. But, he said, he hates to lose the momentum Missouri was gaining with solar.

"The sad part is that we thought we had done what we needed to do to avoid that from happening here," he said. "It really is devastating to have people hired and then lose their jobs six months later."

Follow Maria on Twitter: @radioaltman

Maria is the newscast, business and education editor for St. Louis Public Radio.