Unbeknownst to many unsuspecting apartment developers, rules promulgated by the Public Service Commission of Wisconsin (PSC) in 1980 to promote energy conservation complicate efforts to developing apartments powered by rooftop solar.

The PSC is working to resolve the issue in an ongoing rulemaking proceeding, which proposes to marry rooftop solar deployment with the rollout of high efficiency appliances.

The PSC’s Individual Metering Requirements

The culprit for the current hurdle for rooftop solar deployment is the PSC’s individual metering regulations.^[1]

The rules require that developers include separate electric meters for each unit of an apartment building for new construction and buildings which undergo substantial renovations. The rules include two limited exceptions which the PSC could grant upon a petition from a developer: (1) short-term housing, like hotels, hospitals, and college dormitories; and (2) in situations where tenants would have minimal control over appliances and the appliances that the tenants would have control over are highly efficient.

The PSC designed the rules to promote energy efficiency following the 1970s energy crisis. The logic behind the rules was that if tenants were responsible for their own electricity bills at the end of each month, they would use less to save money.^[2] In addition, the rules allowed utilities to pair a nonpaying tenant or landlord to an individual meter and disconnect the delinquent party without punishing an innocent tenant.^[3]

At that time, the exemptions prevented absurd outcomes. Hotels would not be required to meter each room and could instead roll electricity costs into a guest’s bill. Likewise, the PSC could grant an exemption when tenants would not have much of a conservation incentive because they did not have significant control over their unit’s electricity usage in the first place.

The Rules Make Installation More Expensive

But the rules have not kept pace with a changing electricity landscape, and now have the effect of making the installation of rooftop solar on apartment buildings much more expensive.

Developers can generally only cost-effectively install solar to power their apartment buildings when they can wire the solar to connect to a single meter that measures the electricity usage for an entire building. In that ideal world, the landlord rolls the cost of electricity not offset by the rooftop solar into a tenant’s rent, without a tenant needing to set up a separate electric account with the utility.

But when a developer installs a meter for each unit, the developer must wire the rooftop solar to each unit of the apartment building to provide the same renewable electricity to tenants. That type of individual wiring greatly increases installation costs and can push a developer to drop solar from their building plans altogether.^[4]

Some developers with solar aspirations have tried to fit into the existing exemptions by submitting waiver requests to the PSC, but it has found that the developers have put too many appliances under tenant control, i.e., the developers have not shown that tenants will have minimal conservation incentive.^[5]

The PSC designed the rules with good intentions, but new considerations require a reset. The rules not only bar developers from developing apartments powered by solar and furthering the energy transition; they also prevent many housing facilities which serve the state’s most vulnerable populations from installing solar. The PSC has denied exemption requests from these critical developers because they either give tenants too much control over their appliances or house them for too long.^[6]

Ongoing Rulemaking: How Developers Can Prepare to Comply

The PSC is in the middle of a rulemaking proceeding to change the rules, and has set forth proposed adjustments which could provide exemptions for Wisconsin’s developers looking to install rooftop solar.

At the current moment, the rules appear to provide a pathway for developers to adopt rooftop solar, but only when that solar is paired with high efficiency appliances.

An early version of the revised rules proposed by the staff of the PSC would have allowed developers looking to install rooftop solar to forego individual metering if an apartment building had 10 or fewer units and the solar would offset 70% of the building’s electricity needs. Developers pushed back against that standalone exemption, asserting that the 10-unit cap was arbitrary and the seventy percent 70% offset would be challenging to meet, given the lack of sunny days in Wisconsin.^[7]

Instead, solar advocates proposed that the solar only be required to offset 20% of customer demand to align with standards produced by the Wisconsin Housing and Economic Development Authority.^[8]

However, the PSC appeared to do away entirely with the standalone proposed exemption in its June 19, 2025, open meeting. In that meeting, the PSC discussed the rules that it would send to Governor Evers for approval – the next step for the rules on the path to finalization. The commissioners appeared to resolve concerns about rooftop solar installation and maintaining the incentive to conserve energy by fashioning a new, technology agnostic exemption which considers the reduction in a tenant’s measured electricity usage against a baseline.

The new rules would provide an exemption to the individual metering requirement if (1) electric equipment under tenant control meets established high efficiency standards and (2) the average electric usage per unit will be less than half of the average Wisconsin residential customer.

The PSC clarified that on-site technologies which offset overall usage, like rooftop solar, would factor into the monthly usage calculation. This exemption is technology agonistic because it does not mandate that a developer adopt solar to achieve the reduction in electric usage per unit.

Thus, rather than having a standalone exemption for rooftop solar as originally proposed, developers would have the ability to install rooftop solar on a building of any size, but the units must also have high efficiency appliances.

And in concert, the rooftop solar and high efficiency appliances must reduce tenants’ expected electricity usage by 50% in comparison to the average residential customer for the building to qualify for an exemption. Unlike the prior rules, the PSC will seemingly allow for more appliances to be under tenant control, with the caveat that the solar array must be large enough to offset the electricity usage that comes with giving tenants access to additional appliances.

Looking to the Future

Assuming the PSC’s revisions become final, developers will have additional opportunities to install rooftop solar.

However, developers should be aware that they will not qualify for an exemption from the individual metering requirements solely because they plan to install rooftop solar. Instead, developers looking to install rooftop solar will need to also plan for the installation of high efficiency appliances alongside the deployment of right-sized, on-site generation.

This article was originally published on the State Bar of Wisconsin’s Public Utilities Blog. Visit the State Bar sections or the Public Utilities Section webpages to learn more about the benefits of section membership.

Endnotes

[1] Wis. Admin. Code § PSC 113.0803.

[2] Public Service Commission of Wisconsin, Memorandum: Proposed Revisions for Wisconsin Administrative Code Chapter PSC 113, for Individual Electric Metering, p. 2, Jan. 31, 2025.

[3] Id.

[4] Elevate Energy, a nonprofit developer focused on providing housing with clean and affordable technologies, reported that the cost to install solar for a six-unit apartment building increased from $395,597 to $525,526 once the project incorporated the need to individually wire the solar array to the units’ meters. Comments of Clean Energy Advocates, p. 3, note 4, March 24, 2025.

[5] See, e.g., Request of Brightwater, LLC for a Waiver of Wis. Admin. Code§ PSC 113.0803(1) Regarding Individual Electric Meters, No. 4220-EI-110, 2024 Wisc. PUC LEXIS 154, pp. 8-10, April 16, 2024.

[6] Request of Couleecap, Inc. for a Waiver of Wis. Admin. Code § PSC 113.0803(1) Regarding Individual Electric Meters, No. 4220-EI-113, 2025 Wisc. PUC LEXIS 200, pp. 6-10, May 1, 2025; Request of Current Electrical Services, Inc., a Waiver of Wis. Admin. Code § PSC 113.0803(3) Regarding Individual Electric Meters, No. 6690-EI-119, 2024 Wisc. PUC LEXIS 395, pp. 7-9, Sept. 26, 2024.

[7] Comments on Proposed Revisions to Wisconsin Administrative Code Chapter PSC 113 for Individual Electric Metering, pp. 2-3, March 24, 2025; Comments of Clean Energy Advocates, pp. 16-17, March 24, 2025.

[8] Comments of Clean Energy Advocates, pp. 17, March 24, 2025; Comments of the City of Madison on rulemaking proceedings in PSC Docket, p. 3, March 24, 2025.