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Community Solar: A Hedge Against Maine Utility Rate Hikes

Ampion Renewable Energy

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December 01, 2021

This past week, a bitter energy forecast cast a dark shadow on Maine’s upcoming winter– and new year. Starting in January 2022, electricity supply rates will skyrocket by 88% for Versant (Bangor Hydro Electric) customers and 83% for Central Maine Power customers. As if Maine winters weren’t harsh enough!

The culprit? Rising wholesale electricity rates due to decreased natural gas supply. Our over-reliance on natural gas as a main form of energy has led us to this point, making it clear that we need to give more people access to locally-produced energy alternatives.

The good news? There is a way to control your electric rates, reduce your dependency on your utility, and support local, Maine-generated electricity. It’s called Community Solar.

Here, we explain more about Community Solar, as well as why your energy rates are increasing, the repercussions of higher supply rates, and how this clean energy program can provide much-needed financial relief for Mainers.

The Real Reason Behind Rate Increases

After a competitive bidding process for the standard rate, the Maine Public Utilities Commission landed on the new rates of 11.6 cents per kilowatt-hour (kWh) for Versant customers and 11.8 cents for Central Maine Power customers. The new rates represent massive leaps from the current rate of 6.2 cents and 6.4 cents, respectively.

You may be thinking to yourself, “Why is this happening? Why in Maine?” The Director of the Governor’s Energy office, Dan Burgess, explains that the rate hikes are a result of two factors: an over-dependence on natural gas and fluctuations in the global energy market:

These new high prices “are the direct result of New England’s over-reliance on natural gas to power its electrical grid,” Burgess said. “While Maine electricity prices are typically lower than other New England states, these price increases are being driven by volatile global energy markets and will cause too many Maine people to reach deeper into their pockets this winter to pay their bills.”

The problem comes down to a simple supply versus demand scenario. And it’s not just Maine; multiple factors including lower supply levels, disrupted imports, and fluctuating temperatures are causing even greater rate hikes in Europe and price jumps all over the world.

The demand for natural gas increases everywhere in the winter, but Maine’s bone-chilling winter temperatures result in an even greater need for heat than most places.

What Does This Mean for Mainers?

In 2020, the average Maine household used approximately 570 kilowatt-hours (kWh) of electricity per month and spent an average of $95.77 per month on electricity. If we apply the new CMP supply rate of 11.8 cents to the average Maine electric bill in 2020 (assuming all other factors remain the same), the average bill would’ve increased by $30.78, from about $95.77 to over $126.55. That’s almost an additional $370 per year!

Needless to say, this is a financial burden for Maine residents and businesses -– especially those who are still recovering from the recession and pandemic. These rate hikes have a particularly negative impact on Maine residents like retirees who are on a fixed income. Necessities like heat and electricity consume a much higher percentage of their income, and they end up allocating an unmanageable share of their hard-earned money toward their utility company. Since heating oil prices are up as well, many Mainers could lose financial stability – all just to power their homes.

Community Solar: A Hedge Against Rate Increases

There is a way to buffer the sharp price increases we’re all going to see. Community Solar is a state-sponsored initiative that allows Mainers to save on electricity while enabling Maine’s transition to clean renewable energy sources.

Residents can subscribe to a local solar farm at no cost.The clean energy produced by your household’s share of the solar farm feeds into the electrical grid, giving homeowners, renters, businesses and anyone who pays an electric bill the ability to support solar energy – no rooftop required.

Mainers receive credits or kWh reductions on their electricity bills for their share of the power produced, allowing them to save up to 15%! In the end, Community Solar lets homeowners and renters save meaningful money and live more sustainably by supporting local power, and Maine gets closer to reaching its aggressive clean energy targets. We all benefit from this outcome.

Let’s look back at the average monthly electric bill in Maine that includes CMP’s standard rate for 2022: $126.55. With the opportunity to keep 15% of that per month, or $18.98, you’d save $227.79 per year.

Community Solar gives us hope for a brighter, more abundant future

Traditionally, solar energy was reserved only for homeowners whose rooftops were facing the right direction and received direct sunlight, and who were able to afford the cost of solar (or had a credit score high enough to receive solar financing). Today, Community Solar puts power in the hands of the individual, giving them the opportunity to help initiate the clean energy transition. Every new subscriber who enrolls improves the likelihood of more clean energy capacity being built and plays a role in the reduction of fossil fuel usage.

Maine has done well to promote the expansion of Community Solar since legislation was passed in 2019. But the state can and should do more. We support policy changes to further expand Community Solar to accelerate progress in achieving Maine’s targets of 80% of electricity from renewable sources by 2030, and 100% by 2050.

Overall electricity rates will fluctuate, for sure. You may end up paying more due to factors that are out of your control, like the recent worldwide natural gas price increases. But Community Solar lets you mitigate some of that risk and take some control of your electric bill. The sun will keep shining, and Community Solar will continue to be a welcome reprieve. To learn how you can get started with Community Solar, visit ampion.net/maine.

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