Senate bill won't throw shade on Ikea's solar plan

When Ikea in Fishers opens this fall, it likely will be outfitted with thousands of solar roof panels that will generate enough energy to power a hundred homes, despite a controversial bill in the legislature that critics say will dissuade solar energy investment.

A spokesman for the Swedish furniture maker said a decision would be made in the spring about whether to power the store with solar, as Ikea does with 90 percent of its outlets, including the last three built in California, Washington, and Columbus, Ohio.

“It’s a fair conclusion that the Indiana store will probably have solar” said Ikea spokesman Joseph Roth.

Roth said a solar power bill in the Indiana General Assembly won’t be a factor in the company's calculation. Senate Bill 309 would eliminate a discount homeowners and businesses receive when they buy back extra energy they had sent to the electric grid because they had generated more than they needed.

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Opponents of the bill said it would discourage homeowners, businesses and schools from switching to solar energy because it will cut into their electric savings. Some larger users, such as schools, say it could cost them hundreds of thousands of dollars over several years.

“This bill fundamentally and significantly changes the compensation for investing in new energy production,” said Kerwin OIson, executive director of the Citizens Action Coalition. “It is having a chilling effect on homeowners, businesses and schools.”

Ikea, though, would not be affected by the rule change because it never produces more power than it needs and, therefore, doesn't send any electricity to the grid. Roth said Ikea’s solar energy provides 20 to 60 percent of the electricity a store needs, with the rest being drawn from the local utility grid.

“We use solar to supplement the energy we take from the grid, not replace it,” Roth said.

A typical Ikea store has about 4,000 rooftop solar panels that generate more than a megawatt of energy. But the store uses an enormous amount of energy for lighted displays, kitchen service and air conditioning, so even a megawatt, which is enough to power about 100 homes, doesn't provide enough juice for everything.

The company touts itself as an environmentally conscientious corporation that is “about living within the limits of the planet and protecting the environment,” according to its sustainability strategy.

At least one local company has a bid on the Fishers Ikea job. Bob McKinney, president of Johnson Melloh Solutions in Indianapolis, said his company is talking to a general contractor in California that Ikea favors, REC Solar, to negotiate what type of subcontract work it can do on the Fishers store.

"Our bid was to construct, engineer and do everything, but they like to use REC so we'll see what they want us to do," McKinney said.

Ikea would not disclose how much it costs to install solar panels or what the cost savings would be. But at Sheridan Schools in Hamilton County, Johnson-Melloh built a 1.8 megawatt system that costs $4.3 million over 20 years for installation, operation and maintenance. Sheridan schools business manager Robin Popejoy said the system will save $4 million to $5 million over 25 years, and estimated SB 309 would cost the district up to $900,000 in that time.

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More and more school districts, in fact, are switching to solar to keep their budgets under control. It’s why Sheridan Community Schools Superintendent Dave Munday and seven other superintendents testified in opposition to SB 309.

“It would cut into our savings significantly,” he said.

SB 309 would do away with the current energy credit borrowing system called “net metering,” in which solar producers provide their extra energy to the utilities for a certain price and buy it back at the same price when they need it.

The pending legislation would require solar producers to give up their energy at a lower price and buy it back at a rate 70 percent higher.

Mark Maasel, president of the Indiana Energy Association, said the current system is unfair to the utilities because solar users are dumping electricity into the grid but not paying for its maintenance.

“If you use it, you should help pay for it,” he said, though he acknowledged that the extra electricity doesn’t put added stress on the grid.

But Olson of the Citizens Action Coalition said the solar users are assessed a monthly service fee just like regular electrical user and use the grid much less.

It's the second straight year utilities are backing a bill to eliminate the net metering system. An even more onerous provision was dropped from this year's legislation. The so-called "buy-all, sell-all" plan would have required solar users to send all their energy to the grid at the wholesale rate and buy it all back at a higher price.

Partly in response to the schools’ concerns, legislators will let Sheridan and others who already have solar stay on the current system for 30 years, and those who get solar before 2022 can continue net metering until 2032. But anyone installing solar after 2022 will have to pay the new rate.

Mundy said solar not only cuts costs, but is helping the environment and teaching the students a science lesson at the same time.

“I have received many letters of praise from residents and farmers,” he said. “Environmentally, it is the perfect thing to do in a farm community.”

Call IndyStar reporter John Tuohy at 317 444-6418. Follow him on Twitter: @john_tuohy.