Solar energy policies are hurting Maine businesses

By Sen. Stacey Guerin, R-Glenburn

When a Katahdin-area forest products company president received an email from his account manager at Versant Power in May, he was shocked at what it said. According to an email from Versant that he shared with our office, the manufacturer was going to be on the hook for an additional $58,958 in electricity costs beginning in July.

The reason for the 475 percent increase? It was the new public policy charge being implemented by Versant in response to the solar development subsidies – also called net energy billing – the utility had to start collecting from residential and commercial ratepayers. While Maine’s other public electric utility, Central Maine Power, had begun that collection process last year according to rules adopted in 2023 by the Maine Public Utilities Commission , Versant was unable to change their billing system to begin collecting it until this year.

The company executive did what any constituent would do – he immediately reached out to his representatives in the Legislature. Unfortunately, we couldn’t help him. The state’s utilities had already incurred over $95 million in net energy billing costs as solar projects came online after the 2019 law creating the program took effect, according to filings with the Maine Public Utilities Commission.

Additionally, by my office’s calculations, the Maine PUC had also just approved another $28.4 million increase of solar subsidy recovery, which many businesses are calling a “job-killing solar tax.” That took effect in July.

In the time since, lawmakers and even the media have heard from many more companies in the same boat. Solar subsidy cost increases ranged from 200 percent for some businesses to one in particular that our office learned was going to go up by 1,644 percent.

According to William Harwood, Maine’s public advocate, the program will cost Maine ratepayers $220 million per year for the next 20 years – that’s about $4.4 billion in total. He has also called the program “inequitable” since it favors those who can install solar at the expense of those who can’t or choose not to.

And at a meeting held recently in Milo between local business owners and lawmakers, the owners expressed their frustrations with years of surging energy costs and many are now struggling because of it. Notably, Milo Chip recently announced the potential closure of its operations due to the financial strain from net energy billing policies. The wood products company said it may close after it finishes processing its current hardwood and softwood inventory.

Legislative Republicans have been sounding the alarm about this for years. Our concern has never been about solar energy itself – diversifying our energy portfolio is a smart strategy that some states like Texas have embraced the correct way. We diversify our energy sources now with solar, wind, natural gas, nuclear, hydropower and oil on occasion.

Rather, our current solar energy policy has disproportionately harmed small businesses and led to higher costs for consumers. And now it even threatens workers as companies must absorb these costs, cut back in other areas or close entirely.

Maine currently has the sixth-highest electricity rate in the nation. When you consider the additional factors of regulation and our high tax burden, which is only getting worse as property and payroll taxes rise, we are creating an inhospitable environment for our businesses and residents to survive and thrive.

The feedback I’ve received underscores the sobering, urgent need for a reevaluation of our net energy billing policies to protect the interests of our communities. I’m afraid, however, that these harmful policies will continue unchecked without a change in the legislative majority. Yes, elections have consequences.

Regardless, I remain committed to advocating for policies that support sustainable energy development while ensuring that Maine’s small businesses and consumers are not left behind. We must reduce the inflated subsidies that are draining resources from Maine ratepayers, with much of those funds going to out-of-state developers.

I also urge businesses and consumers across the state to reach out to their local legislators or industry groups and demand meaningful reforms in the next session. This is especially important after Election Day, as new members will join the ranks of those who will be returning to Augusta.

Guerin represents District 4 in the Maine Senate. She is the Senate Republican lead for the Legislature’s Innovation, Development, Economic Advancement and Business Committee.