On December 1, 2022, the Public Service Commission (PSC) ruled that a Stevens Point family can access electricity under contract from a third-party owned solar PV system.
What is Third-Party Ownership and Why Does it Matter?
Third-party ownership (TPO) is a financing solution for homeowners to gain the benefits of having a solar system on their roof without the upfront costs of purchasing the system. A solar company owns and maintains the system while the homeowner can use the electricity generated.
While existing utility law does not prohibit third-party ownership of generating equipment located on the customer’s premises, it does not expressly sanction this type of arrangement either.
Why is This Type of Ownership Controversial?
Since this type of solar arrangement is new to Wisconsin, there’s some rules and regulations to iron out. Utility providers argue that under this type of arrangement, the solar company installing and operating the system is acting as a public utility provider and would need to be permitted as such.
Some solar advocates also claim that the third party ownership model is predatory for the homeowners. By leasing the system rather than owning it outright, homeowners lose a lot of the control and independence that leads many people to pursue home solar in the first place. Depending on the lease agreement, a homeowner could have solar on their roof but not be able to expand on the system, add batteries, or possibly receive all the energy generated from the system.
On the other hand, solar companies and homeowners who support this type of financing think the way a project is funded should not impact access to the utility grid. They believe a house with solar should be connected to the operating utility, regardless of how the project is funded. There is a further benefit in the expanded access to solar. Many homeowners who might struggle to access solar if they had to purchase it outright could be able to afford solar through a third party ownership model.
What Does This Ruling Actually Mean?
By ruling that this Stevens Point family can install the 8kW array on their home through a third party, the PSC has opened the door for other similar petitions. Although utility companies are concerned this could dismantle the current utility model, a similar process occurred in Iowa in 2014 and has not upended their utility system. Time will tell how this decision plays out in Wisconsin.
Third-party ownership is a tricky debate in Wisconsin. While implementation rules are unclear, the ultimate goal is more affordable access to solar. Arch will continue to follow policies as they roll out, so keep in touch with us for any questions. As your local energy experts, we’re here to help!