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Rank 'Em: The Most Solar-Friendly States in the US

A new report from the Environment America Research & Policy Center acknowledges what it deems are the top 12 U.S. states for solar energy ranked by several criteria, from new and cumulative installed capacity to actual electrical generation to a variety of solar energy-friendly policies. Most are unsurprising, but there are some worthy comparisons — and criticisms — to be made.

More descriptions will follow on the next few pages (ranked in reverse order, for suspense' sake), but nearly all of them share the same characteristics: clear renewable electricity standards with carve-outs for solar, strong statewide interconnection policies, strong net metering policies, and accommodation for creative financing options including third-party ownership and property assessed clean energy (PACE) financing. 

Solar energy in the top 12 solar states (in red), vs. the rest of the U.S. Credit: Environment America Research & Policy Center

These 12 states account for barely a quarter of the nation's population (28 percent), but almost all of its installed solar energy (85 percent). "The progress of these states should give us the confidence that we can do much more," stated Rob Sargent, energy program director with Environment America. More than half of U.S. states have the technical potential to generate more than 20 percent of their electricity from rooftop solar PV, and that jumps to 30 percent for sun-drenched California, Arizona, Nevada and Colorado.

Groups contributing to the report included the Solar Energy Industries Association (SEIA), Institute for Local Self-Reliance, Vote Solar, Clean Energy States Alliance, Massachusetts Department of Energy Resources, Environment California Research and Policy Center, Frontier Group, the Tilia Fund, the John Merck Fund and the Energy Foundation.

Lead image: Happy people in city, via Shutterstock

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Number 12: Maryland

Residential and commercial solar PV system prices in Maryland fell by twice the national rate in 2012, according to the Solar Energy Industries Association (SEIA). Environment America ranks the state toward the bottom of the top 12 in PV capacity installed in 2012 (8th, 74 MW) 10th in 2012 installed solar PV per capita (13 W/person), 12th in cumulative solar PV per capita (19 W/person) and 14th in cumulative solar electric capacity (109 MW).

Nevertheless, "building our state's solar market is a top priority," states Governor Martin O'Malley. "Today, we have more than 1,410 times more solar on our state's grid and 2,000 more solar installation jobs than in 2007," he said. And the state's goals for its RPS (20 percent by 2022) and reduction in energy consumption (15 percent per-capita reduced electricity consumption by 2015) "are among the most aggressive in the country," he added.

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Number 11: North Carolina

North Carolina, ranked 11th, owes its presence on the list to several large-scale solar energy installations. Apple made a splash a year ago by building out a 20-MW solar project at its data center in Maiden, alongside several MW of biogas and fuel cells. Google, which has a data center in Lenoir, has called for the state to establish a renewable energy tariff for large business. The largest military installation of solar is at Camp Lejeune.

North Carolina was also one of the states highlighted by a broad effort to roll back RPS levels in two dozen other states — check out the awkwardly rushed voice vote that got North Carolina's motion out of a committee before it withered in the Senate. The trend hearteningly seems to have backfired, though.

And since much of its solar energy adoption has been in larger projects where net metering doesn't apply, North Carolina ranks well below the other states on the top 12 list in their adoption of net metering, with a grade "D."

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Number 10: Massachusetts

Solar installations in Massachusetts were around 130 MW in 2012, one of the most in the country, and residential solar installations have quadrupled over the past two years. Not bad for a New England state better known for long winters and mud season than strong solar resources. But Massachusetts is already primed to achieve a goal it established several years ago: 250 MW of installed solar capacity, a goal not anticipated until 2016. The state has since proposed a new target of 1.6 GW of cumulative installed solar capacity by 2020. Massachusetts also has a 400-MW carve-out in its RPS which also will likely max out well ahead of its target (2014), so the state is trying to fast-track an expansion of that.

Massachusetts also recently adopted renewable heating as part of its RPS efforts, encompassing biomass, solar, and geothermal heating, allowing consumers to sell energy produced back to the utility, similar to an SREC market.

A recent 3.5-MW installation in the state's southeastern town of Dighton incorporates net metering, and a specific installation pattern around sensitive wetland areas.

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Number 9: Vermont

Vermont won recognition in 2011 for its groundbreaking streamlined solar permitting rules, emphasizing residential and small solar installations, which it expanded in 2012. (The state's solar "registration" process, rather than "permitting," is described in an interview with AllEarth Renewables' David Blittersdorf.)

Interestingly, Vermont is also at the forefront of the net metering debate. A report earlier this year found that solar net metering is a net-positive for the state, even with a state incentive factored in, and not including any tangential economic multipliers. Similar reports, and conclusions, have been published for California, New York, and Texas.

Unlike the other top 12 states, Vermont does not have a formal RPS policy; rather it has "goals" of 20 percent of electricity retail sales from renewable energy and combined heat/power by 2017 as part of a Sustainably Priced Energy Enterprise Development (SPEED) program. Beyond that, the state has targets for each providers' annual electricity of 55 percent of retail sales in 2017, increasing 4 percent a year until reaching 75 percent by 2032.

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Number 8: Colorado

Colorado is one state (California another) that limits permitting fees that local governments can charge for solar installations. The state has targeted 1 million solar rooftops by 2030, equal to about 3 GW of output out of a calculated potential of 16 GW across every available rooftop in the state.

Xcel Energy's Public Service Company of Colorado is expanding program capacity for its Solar*Rewards program, which had been fully subscribed for the year and was in danger of being suspended until the next one gets approved for 2014. The company needs to source 30 percent of electricity generation and 3 percent of retail sales from distributed generation by 2020.

The federal government is also taking a closer look at solar energy in Colorado, with the Bureau of Land Management seeking RFPs for 3,700 acres for solar energy development on its lands.

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Number 7: Delaware

Delaware is one of several smaller eastern U.S. states where a comparative lack of solar resource is offset by higher electricity prices and demand for local clean energy sources. Delaware was fifth in 2012 installed solar PV capacity per capita (28 W/person), ahead of California and New Mexico and Colorado. "Delaware is aggressively working toward a clean energy future and demonstrating that we can have both a strong economy and a healthy environment," stated Governor Jack Markell.

Delaware has been reevaluating its SREC program after a 2012 pilot program, switching to a competitive bidding process. That's caused several newer projects entering the program to start with far lower prices than they would have.

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Number 6: California

The granddaddy of solar energy adoption in the U.S., California has more than a third of the nation's cumulative capacity (2.9 GW). Two other states have added 1 GW of cumulative capacity; California did that in 2012 alone. Third-party-owned solar residential systems made up two-thirds of all residential PV installations in the first three months of this year, exceeding non-residential for the first time. California also owns one of the more robust RPS in the country, and studies indicate the RPS efforts haven't broken the bank. In fact California is on its way to achieving its 33 percent RPS well before its 2020 deadline, and efforts are already underway to determine what the next level should be. Similarly, the state's California Solar Initiative has been successful, and arguably it too should be expanded.

Here is home for good news for solar energy adoption in our country. In California, some major utility territories have arrived at a "retail rate" parity situation where a residential solar PV system can compete or beat retail electricity rates with just the 30 percent investment tax credits — i.e. no other incentives. In fact we've heard from installers that trying to obtain those extra incentives is actually less desirable because they make the process longer, wiping out much of the savings they'd provide. Two communities, Lancaster and Sebastopol, have mandated that new or renovated homes must incorporate solar energy. This summer California set a new benchmark of 2.071 GW output on a Friday afternoon, exceeding five percent of peak demand — and not all that far from the 2.25 GW that was lost when the San Onofre Nuclear Generating Station (SONGS) went offline for good.

But again, the proliferation of distributed solar PV is causing concern among utilities and grid operators who struggle to understand and embrace so much "behind the meter" power generation. If the California Independent System Operator (CAISO) can't calculate the supply, it can't be applied to the state's RPS goals. Smart inverters and smart metering would help address this — and not just provide energy production but also voltage smoothing — which opens the door to the net-metering debate.

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Number 5: New Mexico

New Mexico is among the sunniest states, but is the only one that does not compensate consumers, at full retail rates, for excess solar electricity fed back into the grid; instead it calculates the "avoided cost" (i.e., wholesale) rate which is lower than what consumers pay.

That hasn't stopped New Mexico from being at the forefront of the "grid parity" discussion with solar. Earlier this year the state approved a long-term power purchase agreement between First Solar and El Paso Electric Power for a 50-MW project, with a rock-bottom rate of 5.79¢/kWh, far below standard pricing for either other solar projects and even new coal plants. (First Solar also is building 23 MW of solar capacity for the Public Service Co. of New Mexico.) Conergy, meanwhile, is claiming it can install solar in New Mexico at parity with the grid.

Another noteworthy solar milestone in New Mexico: earlier this year, the U.S. Army dedicated its largest solar PV system, a 4.1 MW ground-mount plus 375-kW carport, at the White Sands Missile Range.

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Number 4: New Jersey

New Jersey is another rising star in U.S. adoption of solar energy — and it's doing it not with a high solar resource, but with impressive legislative support and customer demand. The state was an early adopter of policies to support solar energy adoption, including an RPS with a solar carve-out that was recently doubled to 4.1 percent by 2028. Today it has the fourth-highest solar capacity per capita — more than California and New Mexico — and is the third state with 1 GW of cumulative solar installations. More than 15,000 homes, 3,000 businesses, 300 schools, and 200 government facilities in New Jersey now get at least part of their electricity from the sun, says Environment America.

New Jersey's Public Service Electric and Gas (PSE&G) recently got the green-light for a $447 million expansion of solar energy projects, split between smaller distributed generation ones and larger-scale ones on landfills and brownfield sites. PSE&G also got approval for another 97 MW of loans for residential and non-residential solar projects, with an option to pay them off in SRECs.

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Number 3: Hawaii

Ultimately solar energy has to be competitive on a "level playing field" with conventional energy sources, without help from subsidies. (Though defining "level playing field" comes with plenty of debate, and calculation of what benefits other energy production sources enjoy.) Part of that equation means solar will first gain adoption in areas where energy prices are already steep — and few places have higher energy prices than Hawaii, where solar energy is already proven to be cheaper than electricity from the grid, without incentives.

Hawaii does have an incentive program for small-scale residential solar projects ($0.21/kWh), and the state's legislature has voted to enact a "Green Energy Market Securitization" (GEMS) program to support financing for clean energy technologies including solar. Hawaii also has perhaps the most robust renewable portfolio standard of any state: 40 percent by 2030, and a greater target of 70 percent including energy efficiency measures.

Hawaii's recognition in this study "is encouraging and demonstrates our state's commitment to achieving its clean energy goals," stated Hawaii's Governor Neil Abercrombie. "Utilizing all facets of our diverse renewable energy landscape is key, and we are succeeding in removing barriers to allow a greater segment of our community to invest in and benefit from clean, alternative resources such as solar."

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Number 2: Nevada

Nevada is another sun-soaked state in the U.S. Southwest where solar energy's share of electricity generation could exceed 30 percent. It was third overall in 2012 for installed solar PV per capita (72 W/person) and fourth in installed capacity (198 MW), and is fourth overall in cumulative installed solar PV (403 MW).

Earlier this spring Nevada's major public utility, NV Energy, committed to replacing 553 MW worth of coal plants with a mix of renewable energy and natural gas, including solar, wind, and geothermal. Nevada is a national leader in geothermal energy; Apple is adding 20 MW of solar energy to its Reno datacenter, following the company's 100-percent-renewables lead at its other facilities; and a 200-MW wind project recently received federal approval.

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Number 1: Arizona

Arizona's 167 W of solar electricity capacity per resident is nearly 7× the national average, demonstrating the state's early and solid commitment to solar energy. The state also ranks 2nd behind California in utility-scale solar energy projects, with 633 MW in capacity and another 495 MW under construction. And the vast majority — 86 percent — of residential PV installations in Arizona are third-party owned.

Being at the forefront of solar energy deployment has also put Arizona at the head of several key debates about the future of solar energy. The Arizona Corporation Commission (ACC) has voted to eliminate incentives for both residents and businesses, and is one of a number of states to consider challenges to its renewable portfolio standard. And Arizona is ground-zero in one of the most contentious debates in all of energy: net metering. The fight against net metering — and to what extent the ACC is orchestrating it — has even drawn comparisons to the John Kerry/Swift Boat controversy.

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