Louisiana's largest utility puts the brakes on solar

It is usually best to save unpopular news until a major holiday. In Louisiana, a state with a history of brazen political corruption and dominance by the oil and gas industry, this is a time-honored method of limiting public outcry.

On Wednesday, the day before the Thanksgiving Holiday, Entergy Louisiana informed state regulators that it would close its net metering program as of January 1, 2016. The utility says that solar installations in its service area had reached a capacity exceeding 0.5% of its peak load, the level at which it is allowed to shut off the program.

Entergy Louisiana reports 8203 PV systems under net metering in its service area, with a total capacity of 47.4 MW, or 0.57% of peak electricity demand as of October 2014.

Until such time as a successor program to net metering is crafted, Entergy Louisiana will continue to accept applications for interconnection by PV system owners. However beginning January 1 2016 the utility will credit the electricity generated by its customers at "avoided cost", which is a calculation of the wholesale cost of electricity.

As Entergy Louisiana was the state’s largest utility and distributed PV is generally not considered viable without net metering, this will have a significant impact on the state’s solar market. While this market was small in overall terms due to the lack of a solar market in the large commercial, industrial or utility-scale sectors, Greentech Media estimates that the state had the 10th-largest residential solar market in the United States.

A recent vote at the Louisiana Public Service Commission allowed a pre-existing, optional cap on solar installations under net metering to be implemented. This cap is easily the most restrictive of the 45 U.S. states that have passed net metering policies, and the penetration of solar in Louisiana is a small fraction of that in several other states.

Commissioner Erik Skrmetta led the 3-2 vote to implement the caps. Skrmetta has been an outspoken opponent of solar, and recently narrowly won re-election after being challenged by an advocate for energy efficiency and renewable energy. During that election the home of the chief fundraiser for Skrmetta’s opponent was burned to the ground.

“Entergy Louisiana is using this vote to do what many consumers and solar businesses have feared: slam the doors on years of progress in developing solar choices for homeowners, and the hundreds or thousands of jobs that came with a new clean energy industry,” states GSREIA President Jeff Cantin.

GSREIA notes that other utilities are likely to hit these caps in the coming weeks. From June through the end of December, Cantin estimates that the state’s solar industry will have lost one thousand jobs.

Louisiana is stopping its solar market dead in its tracks while other states in the Deep South are making moves to expand large-scale solar. Mississippi, Alabama and Arkansas have all recently approved their first large-scale solar projects, however the largest project underway in Louisiana is a 1 MW pilot project in New Orleans.

Update: This article was updated on December 8 to include new information on the timing of the closure of the net metering program, and to clarify how Entergy will compensate new customers who interconnect in 2016.