Regulators move to change incentive provisions for renewable energy 

State energy regulators moved Thursday to make a big change in how incentives are provided for renewable energy projects.

The state Public Service Commission agreed to set up a $16 million revolving loan fund that would work with a commercial lender to help finance installation of solar, wind or bioenergy projects.

The program is modeled in part on a similar initiative already in place in Iowa.

The move follows several years of different approaches on funding for renewable power projects, including several occasions in which incentives for renewable projects were suspended.

Commissioner Ellen Nowak said the revolving loan fund would “hold the renewable industry more accountable for its own development” and free up more dollars for energy efficiency incentives, which are more cost-effective initiatives for utility ratepayer dollars.

Phil Montgomery, the commission’s chairman, and, like Nowak an appointee of Republican Gov. Scott Walker, supported her move. Democrat Eric Callisto said he would likely oppose the move, saying he expected it would be supported only “by those who would like to see less money spent on renewable energy.”

Tyler Huebner, executive director of the renewable energy advocacy group Renew Wisconsin, said his group isn’t opposed to a revolving loan fund. He noted that the Wisconsin plan had key differences from one in Iowa.

In Iowa, a revolving loan fund is used in conjunction with grants that provide incentives to install renewable energy. The Wisconsin proposal would replace grants with the revolving loans.

“We will be looking into the details to see how this will affect the market, especially in concert with the utilities’ radical changes to how they propose to treat customer renewable energy,” said Huebner.

Utilities are asking regulators for permission to reduce the amount they are paying to customers for the power they are generating from their solar panels.

Also under Nowak’s proposal, the PSC would no longer tie funding for wind and solar projects to those it deems more cost-effective, such as bioenergy projects.

Under the most recent policy, the commission has allocated 75% of renewable energy dollars to bioenergy projects, in effect allocating a maximum of $8 million for bioenergy and $2 million for other types of renewable energy.

“This will give those who wish to fund small solar renewable projects that ability to potentially attain a low or no-interest loan for a portion of their loan amount and be able to start and fund the project that they deem fit for their needs,” said Nathan Conrad, a PSC spokesman.

In a separate decision, the PSC agreed to fund a $6.4 million pilot project for dairy-farm manure digesters, in a bid to assist farms smaller than the state’s largest dairy farms to afford to use the technology that helps address releases of methane, a potent greenhouse gas.

Wisconsin has led the nation in construction of methane-to-energy projects, but they have been located on farms with at least 800 cows. The new project could help finance up to 10 digesters at dairy farms with fewer than 800 cows over the next four years.

Callisto said he was concerned that the dairy initiative wouldn’t meet the cost-effectiveness metrics that the PSC has been so concerned about when limiting funding for solar projects.