A Wisconsin family’s case could have helped clarify a nagging solar ownership question. But then they moved.
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 January 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.