Court overturns PSC decision to allow third-party financing of solar panels » Urban Milwaukee

Solar panels on the roof of a house in Milwaukee.  File photo: Dave Reid.

Solar panels on the roof of a house in Milwaukee. File photo: Dave Reid.

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

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

Under this agreement, the family would lease the system from the North Wind Renewable Energy Cooperative. Similar leases are common in other states, but utility companies oppose their use in Wisconsin, saying they are not allowed under current state law.

According to North Wind’s founder, the Stevens Point family sold the house and did not pursue the project Josh Stolzenburg.

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 association and sent the case back to the Public Utilities Commission. The court found that the PSC misinterpreted the concept of “public utility” in its decision because it focused on a single project rather than North Wind’s entire operations.

State law defines a “public utility” as any entity that owns, operates, manages or controls equipment used to “transmit, deliver or supply heat, light, water or energy, directly or indirectly, to the general public.”

Utilities have largely opposed third-party financing of solar installations, arguing that it violates state law by allowing installers to operate as a utility without being subject to such regulation.

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

But renewable energy advocates called the court’s decision a major setback for Wisconsin homeowners seeking clean, affordable energy.

In a statement Will KenworthyChief regulatory officer of the nonprofit Vote Solar, an intervener in the Dane County court case, said the ruling limits customers’ rights to manage their energy use and favors utility profits.

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

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

As of 2021, at least 29 other states have allowed third-party financing for solar installations, according to the NC Center for Clean Energy Technology at North Carolina State University.

Chelsea Chandlerdirector of the climate, energy and air program at Clean Wisconsin, said the legality of third-party financing for residential solar installations has long been unclear.

She said the 2022 PSC decision was intended to provide some clarity to the rules, but a recent court ruling effectively invalidated that clarification.

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

“Investments in solar energy pay off very quickly and can save residents money over the life of the panels,” she said. “But especially for people who are on lower incomes and don’t have a lot of savings, the ability to put that money forward is a barrier (that prevents) some people from doing so.”

Chandler said low- and moderate-income households in Wisconsin can get help installing solar energy thanks to $62.4 million awarded to the state by the Biden administration on Earth Day. However, she said this is not the only solution.

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

Legal uncertainty surrounding third-party financing in Wisconsin also makes it difficult for developers like North Wind, Stolzenburg said.

He said there are nonprofits and households that would benefit from third-party financing, but legal ambiguities prevent them from doing so.

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

“There are other measures that are beyond the scope of this particular case,” Klein said. “Further petitions may be submitted to the Commission based on different sets of facts or legislative action on this matter. I think this district court opinion is certainly not the last word on this issue.”

Listen to the WPR report

The court overturned the PSC’s decision that allowed the family to lease the solar system was originally published by Wisconsin Public Radio.