A recent ruling by a Wisconsin appeals court closes the door on the long-standing battle for third-party-owned solar in the state — at least for the near future, as disappointed advocates see it.

On Jan. 3, the court dismissed ongoing legal proceedings regarding a Stevens Point family’s efforts to buy electricity from solar panels that would have been installed on their home but owned by a solar company. The arrangement, known as third-party solar, allows customers access to solar power without the upfront cost of installing panels.

The family moved before their case concluded, though, making it “moot” in the court’s opinion. Advocates had hoped a court decision could still clarify that under existing law, third-party-owned solar is indeed legal, but those hopes are now dashed.   

“I think this road is at a dead end at this point,” said Will Kenworthy, Midwest regional director for Vote Solar, which had brought a petition before the Public Service Commission on the family’s behalf, asking the commission to affirm their right to do the project. “We had a chance to resolve it once and for all, and we made the effort to get it this far, then had the carpet pulled out from underneath us.” 

In late 2022, the Wisconsin Public Service Commission ruled in favor of the family, who wanted to install rooftop solar that would be owned by North Wind Renewable Energy Cooperative, a developer based nearby. 

After the commission decision, the Wisconsin Utilities Association filed a lawsuit challenging the commissions’ ruling, arguing such arrangements violate utilities’ monopoly rights to provide power. 

A trial court remanded the issue back to the commission for further information. Vote Solar, represented by the Environmental Law & Policy Center, appealed that ruling, and hoped the appeals court would affirm the commission’s decision. 

But when the Public Service Commission members found out that the family had moved without installing solar, they withdrew the decision on their case. 

“It closes this phase of the very long and ongoing saga here to clarify the law for third-party financing,” said ELPC senior attorney Brad Klein. “What’s frustrating with this setback is a lot of work went into teeing up a strong legal case for the commission and the courts. It got knocked out on a procedural non-substantive issue on the status of the customers, which leaves the rest of Wisconsin customers in the dark on the lawfulness of this tool.” 

The commission’s decision on the Stevens Point case had applied only to that particular project. But advocates thought the move could pave the way for others to do third-party-owned solar. 

Why it matters

“The hope with that decision was it would serve as a precedent — if this one family can do it, then a second family, a third family, a fourth family could do it too,” said John Albers, a director at Advanced Energy United, which filed an amicus brief in the case. “The frustrating part is none of this should be happening. Wisconsin is an outlier — you’ve got Michigan, Illinois and Iowa that all allow third-party ownership.” 

Nationwide, third-party ownership makes solar more accessible for many households, nonprofits, churches, schools and government agencies, since the solar developer or other third-party owner pays the upfront costs and reaps the tax incentives, while providing power and passing on energy bill savings to the resident or nonprofit.     

The direct-pay provision in the Inflation Reduction Act makes third-party ownership less crucial for nonprofit entities including government agencies, since direct payments —unlike tax incentives — can be tapped even if one doesn’t pay taxes. But the paperwork requirements for direct pay can be onerous, and under the Trump administration, pieces of the IRA may be rolled back. 

Advocates have long argued that existing Wisconsin law actually does allow for third-party-owned solar. But without clarity from a government authority, utilities have refused to interconnect third-party-owned solar arrays, and developers have been reluctant or unwilling to explore the arrangement with customers. 

A legal battle over Eagle Point Solar’s plans to do a third-party-owned solar project with the city of Milwaukee, for example, has been before the public service commission and in the courts for years. 

Kenworthy said advocates were hoping the commission and appellate court would offer “an interpretation of statute that avoids this preposterous outcome that someone putting a small solar array on someone’s roof is suddenly constituting a utility.” 

“We think it’s as urgent as ever to get third-party ownership available to the people of Wisconsin, we’re still interested in trying to figure out if there’s a way we can address it,” Kenworthy continued. That could mean another resident attempting third-party-owned solar, a lengthy and frustrating undertaking, as the Stevens Point family saw.   

“It was illustrative of the problem people are facing,” Kenworthy said. “Getting solar on a residential rooftop is a tough choice anyway, and when you have that type of uncertainty out there it really is a deterrent.” 

In an amicus brief, Advanced Energy United had made the case that residential third-party-owned solar would benefit all ratepayers, and could reduce reliance on planned new gas plants in Wisconsin. The group is among many that have filed testimony opposing a $1.2 billion new gas peaker plant that the utility WEPCO plans to build at the site of its Oak Creek coal plant. 

“Really, the more behind the meter solar you have in Wisconsin, the better for all ratepayers,” he said. “Utilities wouldn’t need to spend as much on new generation if homeowners were able to generate at home.” 

In years past, advocates have pleaded with the legislature, courts and commission to offer clarity on third-party ownership, so far to no avail. The Public Service Commission declined to rule on a petition from the Midwest Renewable Energy Association seeking to develop third-party-owned solar, noting that the association did not have a specific project contract. 

“The problem remains unresolved and it’s going to require some additional work over time, but we are going to continue pushing,” Klein said. “I’m confident in the long-term outcome because I think we’re right on the law. We don’t know if the next effort will mirror this one, which was an attempt to be responsive to the commission’s request to bring a specific case to them. We may do that again, or there’s other avenues. Certainly the legislature could act, there are other ways the commission could act. We’ll be exploring all of those options.”

A Wisconsin family’s case could have helped clarify a nagging solar ownership question. But then they moved. is an article from Energy News Network, a nonprofit news service covering the clean energy transition. If you would like to support us please make a donation.

Living in a net-zero home is often a luxury for those who can afford solar panels, state-of-the-art HVAC and other innovations and renovations.

But lower-income people are those who could benefit most from energy cost savings, and those who suffer most from extreme climate. Milwaukee is trying to address this disconnect by building net-zero homes for low-income buyers in partnership with Habitat for Humanity, a marquee project of the city’s 2023 Climate and Equity Plan.

In September, the U.S. Department of Energy announced a $3.4 million grant that will go toward Milwaukee’s construction of 35 homes on vacant lots in disadvantaged neighborhoods and the opening of a factory to make wall panels for net-zero manufactured homes.

City leaders have found the undertaking more challenging than expected, especially on the factory front. But they hope overcoming roadblocks will help create a new local and regional market for energy-efficient, affordable prefabricated homes, while also training a new generation of architects in the sector through partnership with the University of Wisconsin-Milwaukee School of Architecture and Urban Planning.

“It remains an ambitious project,” said Milwaukee environmental sustainability director Erick Shambarger. “We’re trying to support equity, climate, new technology, manufacturing. It takes some time, but we’re excited about it and looking forward to making it a success.”

Panelized, prefabricated homes can be built relatively cheaply, but making them highly energy efficient is a different story. A handful of small companies nationwide make the wall panels used in such construction to highly energy-efficient standards, but transporting the panels is expensive and creates greenhouse gas emissions. 

The city sought a local manufacturer, but an initial request for proposals yielded no viable candidates. Now the city and UWM professors are working with the Rocky Mountain Institute to convince a qualified company to open a site in Milwaukee to make energy-efficient panelized home components at commercial scale, for both the city and private customers.

“It’s such a great fit for Milwaukee,” said Lucas Toffoli, a principal in RMI’s carbon-free buildings program. “It’s a city that has a very strong blue-collar tradition, so the idea of bringing back some manufacturing, and leveling up the home-building capacity of the city feels very congruent with the spirit of Milwaukee.”

And panelized homes could be a cornerstone of affordable, energy-efficient housing nationwide if the sector was better organized and incentivized, RMI argues — a goal that Milwaukee could help further. 

“Local action always drives a message in a way that federal action doesn’t,” Toffoli said. “It will be even more important under the incoming presidential administration and Congress. Having this project getting started at the local level in an important Midwestern city is a way to help ensure that progress continues at some level, even if it’s less of a priority at the federal level.” 

Panel problems

Habitat for Humanity builds its own panels in its Milwaukee warehouse, and is working on an energy-efficient panelized design that it hope will yield the first net-zero affordable homes in 2025. Milwaukee has yet to select a developer for the DOE-funded program, but Milwaukee Habitat was a partner in the DOE grant and CEO Brian Sonderman said the organization is hopeful it will be chosen during an RFP process.

Single-family homes are typically “stick built” from the ground up, with 2×4 or similar boards forming a skeleton and then, one by one, walls. Panelized homes involve walls transported intact to the site. 

Milwaukee Habitat for Humanity often uses a hybrid method wherein walls are “stick built” laying on their side in the Habitat warehouse, and then brought to the site where volunteers help assemble the new house.

There are various other methods of making panels that don’t involve lumber, UWM Associate Professor Alexander Timmer explained, and making these models highly energy efficient is still an emerging and decentralized field.

“It’s the chicken-or-the-egg problem in some sense,” Timmer said, since component manufacturers don’t know if there’s a market for energy-efficient panelized homes, and developers don’t build the homes because few component suppliers exist.

Wall panels can involve two sheets of plywood with insulation in between, or a steel interior surrounded by rigid insulation, among other models.

“With 2x4s, any small crew can build a home,” said Timmer. “With panelized, you need a factory, specialized tools, specialized knowledge. The hope is we are graduating architects into the market who know these technologies and techniques, and can design them to high energy efficiency standards. The city needs architects and builders who want to do these things and feel comfortable doing them.”

Toffoli touted the benefits of net-zero homes beyond the carbon emissions and utility bill savings.

“There’s less draftiness, greater comfort throughout the whole home,” said Toffoli. “In addition to making the heater run less to warm the air, there’s a big comfort benefit and acoustic benefit,” with little noise or pollutants filtering into the well-sealed home.

“In the middle of a severe Wisconsin winter storm, [if] power goes out for everyone, you have a home that can basically ride through harsh conditions passively much better,” Toffoli added. 

Toffoli said examples in Pennsylvania and Massachusetts show panelized, highly energy-efficient homes can be built at costs not much greater than standard market panelized homes. A different design, including thinner studs and more insulation, means less heat or cold is transported from the outside in. Insulation and highly efficient windows cost more than market rate, but smaller appliances can be used because of the efficiency, helping to mitigate the cost increase. 

He said mass production of net-zero panelized homes is much more efficient and cost-effective than stick-built energy-efficient homes. 

“You don’t need to, every time, find a contractor who understands the proper sequence of control layers for a very high-performance wall,” Toffoli said. “It’s been done in part in a factory where they’re plugging and chugging on a design that’s been validated and repeated.”

The DOE grant includes $1 million for Milwaukee to incentivize construction of the panel factory, $40,000 each toward 25 homes, plus funds for administration and other costs. Shambarger said $40,000 per home will cover the construction cost difference between an affordable home that merely complies with building codes, and one that is net-zero – meeting federal standards with a highly efficient envelope, an electric heat pump and solar panels.

Shambarger noted that the city funding and business will not be enough to motivate a company to build a new factory in Milwaukee.  

“Any company is going to have to have a customer base” beyond the city orders, Shambarger said. “We’ll have to make sure other housing developers like the product that companies have, that it’s cost effective. One of the things we learned the first time around is most of the developers really didn’t understand how to do net-zero energy. We want to make sure the product we select fits within Milwaukee neighborhoods, will work in our climate, has buy-in from the community.”

Local jobs would be created by the factory, which is slated to be in Century City, the neighborhood with the most vacant manufacturing space.

“Overall with the climate and equity plan, we are trying to create good-paying jobs that people want,” Shambarger said. “That often means the trades. One of the things attractive about building housing components in a factory is it offers steady year-round employment, rather than having to go on unemployment for the winter,” as many building tradespeople do.

Creating Habitat

Sonderman said that in the past, Milwaukee Habitat has put solar on some homes, but little else specifically to lower energy costs.

“Clearly if there was a really substantial market for developers who were interested and willing to do this work, the reality is Habitat wouldn’t be the first call,” he said. “It’s something new. One of the things we’re looking forward to is sharing with our Habitat network in the state and other developers and builders, so we build some confidence this can be done efficiently and cost-effectively.”

Net-zero homes are not only a way to fight climate change, but an environmental and economic justice issue in predominantly Black neighborhoods scarred by redlining and disinvestment, where the majority of residents are renters, Sonderman added.

“Even for the individuals who don’t live in that home but live in the neighborhood, it breathes hope, it says that our neighborhood is being invested in,” Sonderman said. “That matters deeply for the residents of Lindsay Heights, Harambee, Midtown and elsewhere. To take a project like this and see it come to fruition has tremendous ripple effect in a positive way.”

Several other Habitat chapters nationwide are building net-zero homes, including in Colorado, Illinois and Oregon.

Milwaukee Habitat is planning to build 34 homes in 2025 and up to 60 homes annually by 2028. Sonderman said they will make as many as possible net-zero.

“We’re not in a capacity to be the full-scale factory [Shambarger] was envisioning,” he said. “But we believe we’ll be able to supply the walls we need to build dozens and dozens of net-zero homes in the future.”

Milwaukee plans to build net-zero modular homes for lower-income residents — but it’s not easy is an article from Energy News Network, a nonprofit news service covering the clean energy transition. If you would like to support us please make a donation.

A new contract between Kalamazoo, Michigan, and utility Consumers Energy signals a change in direction for the city’s clean energy strategy as it seeks to become carbon neutral by 2040. 

Solar was seen as a pillar of the city’s plans when it declared a climate emergency in 2019 and set a goal of zeroing out carbon emissions by 2040. After spending years exploring its options, though, the Michigan city is tempering a vision for rooftop solar in favor of large, more distant solar projects built and owned by the utility. It’s not alone either, with Grand Rapids, Milwaukee, Muskegon and other cities taking a similar approach.

“Folks want to see solar panels on parking lots and buildings, but there’s no way as a city we can accomplish our net-zero buildings just putting solar panels on a roof,” said Justin Gish, Kalamazoo’s sustainability planner. “Working with the utility seemed to make the most sense.” 

Initially there was skepticism, Gish said — “environmentalists tend to not trust utilities and large corporate entities” — but the math just didn’t work out for going it alone with rooftop solar.

The city’s largest power user, the wastewater treatment station, has a pumping house with a roof of only 225 square feet. Kalamazoo’s largest city-owned roof, at the public service station, is 26,000 square feet. Spending an estimated $750,000 to cover that with solar would only provide 14% of the power that building uses annually — a financial “non-starter,” he said.

So the city decided to partner with Consumers Energy, joining a solar subscription program wherein Kalamazoo will tell Consumers how much solar energy it wants, starting in 2028, and the utility will use funds from its subscription fee to construct new solar farms, like a 250 MW project Consumers is building in Muskegon. 

Under the 20-year contract, Kalamazoo will pay a set rate of 15.8 cents per kWh — 6.4 cents more than what it currently pays — for 43 million kWh of solar power per year. If electricity market rates rise, the city will save money, and Kalamazoo receives Renewable Energy Credits (RECs) to help meet its energy goals. 

The subscription is expected to eliminate about 80% of Kalamazoo’s emissions from electricity, Gish said. The electricity used to power streetlights and traffic signals couldn’t be covered since it is not metered. As the city acquires more electric vehicles — it currently has two — electricity demand may increase, but city leaders hope to offset any increases by improving energy efficiency of city buildings.  

Consumers Energy spokesperson Matt Johnson said the company relies “in part” on funds from customers specifically to build solar, and considers it a better deal for cities than building it themselves, “which would be more costly for them, and they have to do their own maintenance.”  

“We can do it in a more cost-effective way, we maintain it, they’re helping us fund it and do it in the right way, and those benefits get passed on to arguably everybody,” Johnson said. 

Grand Rapids, Michigan, joined the subscription program at the same time as Kalamazoo. Corporate customers including 7-Eleven, Walmart and General Motors are part of the same Consumers Energy solar subscription program, as is the state of Michigan.

Costs and benefits

“There’s a growing movement of cities trying to figure out solar — ‘Yes we want to do this, it could save us money over time, but the cost is prohibitive,’” said John Farrell, co-director of the Institute for Local Self-Reliance. 

Until the Inflation Reduction Act, cities couldn’t directly access federal tax credits. The direct-pay incentives under the IRA have simplified financing, Farrell said, but cities still face other financial and logistical barriers, such as whether they have sufficient rooftop space.  

Advocates acknowledge deals with utilities may be the most practical way for budget-strapped cities to move the needle on clean energy, but they emphasize that cities should also strive to develop their own solar, and question whether utilities should charge more for clean power that is increasingly a cheaper option than fossil fuels.

“Our position is rooftop and distributed generation is best — it’s best for the customers, in this case the cities; it’s best for the grid, because you’re putting those resources directly on the grid where it’s needed most; and it’s best for the planet because it can deploy a lot faster,” said John Delurey, Midwest deputy director of the advocacy group Vote Solar. “I believe customers in general and perhaps cities in particular should exhaust all resources and opportunities for distributed generation before they start to explore utility-scale resources. It’s the lowest hanging fruit and very likely to provide the most bang for their buck.”

Utility-scale solar is more cost-effective per kilowatt, but Delurey notes that when a public building is large enough for solar, “you are putting that generation directly on load, you’re consuming onsite. Anything that is concurrent consumption or paired with a battery, you are getting the full retail value of that energy. That is a feature you can’t really beat no matter how good the contract is with some utility-scale projects that are farther away.”

Delurey also noted that Michigan law mandates all energy be from clean sources by 2040; and 50% by 2030. That means Consumers needs to be building or buying renewable power, whether or not customers pay extra for it. 

“So there are diminishing returns [to a subscription deal] at that point,” Delurey said. “You better be getting a price benefit, because the power on their grid would be clean anyways.” 

“Some folks are asking ‘Why do anything now? Just wait until Consumers cleans up the grid,’” Gish acknowledged. “But our purchase shows we have skin in the game.” 

A complement to rooftop

In 2009, Milwaukee adopted a goal of powering 25% of city operations — excluding waterworks — with solar by 2025. The city’s Climate and Equity Plan adopted in 2023 also enshrined that goal. 

For a decade, Milwaukee has been battling We Energies over the city’s plan to install rooftop solar on City Hall and other buildings through a third-party owner, Eagle Point Solar. The city sought the arrangement — common in many states — to tap federal tax incentives that a nonprofit public entity couldn’t reap. But We Energies argued that third party ownership would mean Eagle Point would be acting as a utility and infringing on We Energies’ territory. A lawsuit over Milwaukee’s plans with Eagle Point is still pending.

In 2018, We Energies launched a pilot solar program in Milwaukee known by critics as “rent a roof,” in which the utility leased rooftop space for its own solar arrays. Advocates and Milwaukee officials opposed the program, arguing that it encouraged the utility to suppress the private market or publicly-owned solar. In 2023, the state Public Service Commission denied the utility’s request to expand the program.

Wisconsin Citizens Utility Board opposed the rent-a-roof arrangement since it passed costs they viewed as unfair on to ratepayers. But Wisconsin CUB executive director Tom Content said the city’s current partnership with We Energies is different, since it is just the city, not ratepayers, footing the cost for solar that helps the city meet its goals.

Milwaukee is paying about $84,000 extra per year for We Energies to build solar farms on a city landfill near the airport and outside the city limits in the town of Caledonia. The deal includes a requirement that We Energies hire underemployed or unemployed Milwaukee residents.

The Caledonia project is nearly complete, and will provide over 11 million kWh of energy annually, “enough to make 57 municipal police stations, fire stations, and health clinics 100% renewable electricity,” said Milwaukee Environmental Collaboration Office director Erick Shambarger. 

The landfill project is slated to break ground in 2025. The two arrays will total 11 MW and provide enough power for 83 city buildings, including City Hall – where Milwaukee had hoped to do the rooftop array with Eagle Point. 

Meanwhile Milwaukee is building its own rooftop solar on the Martin Luther King Jr. library and later other public buildings, and Shambarger said they will apply for direct pay tax credits made possible by the Inflation Reduction Act — basically eliminating the need for a third-party agreement.

“Utility-scale is the complement to rooftop,” said Shambarger. “They own it and maintain it, we get the RECs. It worked out pretty well. If you think about it from a big picture standpoint, to now have the utility offer a big customer like the city an option to source their power from renewable energy — that didn’t exist five years ago. If you were a big customer in Wisconsin five years ago, you really had no option except for buying RECs from who knows where. We worked hard with them to make sure we could see our renewable energy being built.”

We Energies already owns a smaller 2.25 MW solar farm on the same landfill, under a similar arrangement. Building solar on the landfill is less efficient than other types of land, since special mounting is needed to avoid puncturing the landfill’s clay cap, and the panels can’t turn to follow the sun. But Shambarger said the sacrifice is worth it to have solar within the city limits, on land useful for little else.

“We do think it’s important to have some of this where people can see it and understand it,” he said. “We also have the workforce requirements, it’s nice to have it close to home for our local workers.”

Madison is also pursuing a mix of city-owned distributed solar and utility-scale partnerships. 

On Earth Day 2024, Madison announced it has installed 2 MW of solar on 38 city rooftops. But a utility-scale solar partnership with utility MGE is also crucial to the goal of 100% clean energy for city operations by 2030. Through MGE’s Renewable Energy Rider program, Madison helped pay for the 8 MW Hermsdorf Solar Fields on a city landfill, with 5 MW devoted to city operations and 3 MW devoted to the school district. The 53-acre project went online in 2022.

Farrell said such “all of the above” approaches are ideal.

“The lesson we’ve seen generally is the more any entity can directly own the solar project, the more financial benefit you’ll get,” he said. “Ownership comes with privileges, and with risks. 

“Energy is in addition to a lot of other challenging issues that cities have to work on. The gold standard is solar on a couple public buildings with battery storage, so these are resiliency places if the grid goes down.”

Correction: Covering Kalamazoo’s public service station roof with solar panels would provide an estimated 14% of power used by that building. An earlier version of this story mischaracterized the number.

In Michigan and Wisconsin, cities are finding rooftops alone may not achieve solar energy goals  is an article from Energy News Network, a nonprofit news service covering the clean energy transition. If you would like to support us please make a donation.