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Solar Storm: Rebate Audit Requested

by St. Louis CNR, July 18, 2013
Solar Storm: Rebate Audit Requested
A fight has erupted over a possible suspension of solar rebates in Missouri. On July 5, 2013, Kansas City Power & Light (KCP&L) filed a motion with the Missouri Public Service Commission to suspend payments of solar rebates for the rest of this year.

“I wouldn’t be surprised to see Ameren make a similar filing later this year,” said Chuck Caisley, vice president of marketing and public affairs at KCP&L. “There are policy issues involved that affect all customers in Missouri,” he said.

The St. Louis-based Missouri Solar Energy Industries Association (MOSEIA) intervened in the case this week to opposed the suspension of rebates.

Caisley said the utility is required by law to file the motion when it expects that applications for solar rebates will exceed the one percent electric retail rate impact cap set by voters. The cap is supposed to prevent the cost of rebates from increasing the utility’s customers’ rates by more than one percent.

“We think we are going to hit or exceed the one percent cap,” Caisley said. KCP&L estimates that it will receive applications for nearly $51 million worth of solar rebates this year, and the one percent cap limits the total value of rebates for the year to slightly more than $10 million.

MOSEIA alleges that KCP&L made excessive and improper payments to solar installation company U.S. Solar. MOSEIA Executive Director Heidi Schoen said that excessive payments and payments for installations that were not made should not be included in the calculation of the retail cap.

Schoen said that her organization wants the Missouri Public Service Commission to conduct an independent audit of KCP&L’s rebates.

MOSEIA’s allegations stem from an ethics violation complaint filed by a building owner early this year. The owner claimed that U.S. Solar had installed a 8.46 kw system and gave the owner a copy of a rebate application for a 8.46 kw system, but then filed a rebate application with KCP&L for a 16.45 kw system. KCP&L send the rebate to U.S. Solar, instead of to the building owner, and paid based on the larger system.

After reviewing the complaint and the owner’s supporting documentation, and giving U.S. Solar time to respond, MOSEIA expelled U.S. Solar from the association on March 20, 2013. Schoen informed Caisley of MOSEIA’s decision by certified letter on June 3. She asked that KCP&L review all applications that U.S. Solar had filed with the electric power company and verify that they were accurate and properly described the systems installed.

“We are concerned that there are more cases, but this is the only case for which we have evidence,” Schoen said. “It has opened a Pandora’s box.”

Caisley said that KCP&L had already known about the customer’s complaints, and had adjusted its policy because of them.

“The customer had called us and asked where his rebate check was. We said we had sent it, and he said he hadn’t received it,” Caisley said.

Further discussion revealed that the solar installer had told the customer to put the installer’s address as the designated address for all correspondence.

“We don’t allow that anymore. Since then, we have said that all correspondence has to go to the customer’s address of record,” said Caisley.

That decision upset a lot of solar installers, he said, because many other installers had followed the same practice. Schoen disagreed. She said the practice was “unusual” and not followed by other installers. “Typically, the check goes to the building owner, not the installer,” she said.

U.S. Solar had no comment on the allegations.

As for the rebate fund running dry, Caisley blames the solar industry. “We are aware of some in the industry adding 100 percent margins to their product pricing, which you can do when there is an 80 percent subsidy for the product,” he said.

On July 17, Columbia-based Renew Missouri started a petition on Change.org calling on KCP&L to continue solar rebates for the rest of the year. The petition makes no mention of any issues around rate increases, price gouging, or improper payments in the power company’s rebate program.

Homeowners, meanwhile, are caught in the middle between problems in KCP&L’s solar rebate program and the expiration of the Residential Energy Property Credit at the end of this year. The energy property credit provides tax credits for residential solar installations.

“Right now it is about as good as it is ever going to be for solar,” Marc Lopata, president of Microgrid Solar, said before the news broke about problems in solar rebate programs.

“The (Missouri) legislature has agreed to start cutting the solar rebate next June and phase it out completely in four years,” he said. The result is, “We are selling like we’ve never sold before. People who have been thinking about solar are ready to do it and we have a nine-month backlog.”

Source: St. Louis CNR