Solar PPA model upheld in Iowa

In a huge boost for solar in the most wind-friendly state in the US, the Iowa Supreme Court has struck down a claim that a city’s power-purchase agreement with a PV company infringed on the local utility’s monopoly.

The move is a setback to the regulated utility model in the US, which finds itself increasingly at odds with the distributed PV sector.

In 2012 the Iowa Utilities Board, which regulates the state’s energy monopolies, concluded that a PPA signed between Eagle Point Solar and the city of Dubuque violated the terms of Alliant Energy’s exclusive operating rights in the area.

In 2013, however, a District Court overruled that decision, and the case made its way to the state’s Supreme Court.

The Iowa Supreme Court has now decided – in a 4-2 ruling, with one abstention – that the PPA should be upheld.

Dubuque-based Eagle Point Solar signed the PPA for modules installed on a building owned by the city. Such PPAs are one of the mainstays of the solar third-party ownership model, which has acted like rocket fuel for the distributed PV sector over the past few years.

Among the arguments against the PPA made by Alliant Energy, an energy utility based in the neighbouring state of Wisconsin, is that allowing such direct PPAs will lead to increased costs for non-solar power users in its services area – an increasingly common claim by monopoly utilities across the US.

Rhone Resch, chief executive of the Washington DC-based Solar Energy Industries Association, calls the legal decision “an important milestone for solar energy in Iowa”.

“It undoubtedly will help to jump-start solar installations across the state, creating new jobs, pumping money into the Iowa economy and reducing pollution."

Although Iowa has almost no installed PV capacity at present, Iowans are no stranger to renewables.

The state – which has a Republican governor and a Republican-controlled House of Representatives – has nearly 5.2GW of installed wind capacity, giving wind a 27.4% penetration in the electricity mix, the highest level in the country.