This article was originally posted on the Wunder Capital Blog
Last month, the NC Clean Energy Technology Center and Meister Consultants Group released their 2015 Policy Review, “The 50 States of Solar”. The report sets out to provide key stakeholders in the solar PV industry with an overview of trends in relevant policy and regulation. It includes analysis of activities such as significant state and utility net-metering or community solar laws, important legislative efforts, and utility proposed rate changes. Here is our brief summary of the facts and trends.
Top Three Facts
- New PV systems are being installed in the United States at a rate of one every two minutes.
- The only states that did not take significant actions related to solar policy in 2015 were Alabama, North Dakota, and Wyoming.
- Nebraska’s Omaha Public Power District had the highest approved request, at $35, for a residential fixed charge increases.
Top 5 Policy Trends
- Net Metering vs Net Billing: 41 states have some level of mandatory net-metering policies, which allow solar and other generating customers to sell excess power back to the grid. However, there has been a growing trend among utilities to push for a change to “net billing”, which they say better reflects the actual avoided costs to them of the excess generation. Hawaii, Nevada, and Mississippi all enacted “net billing” policies in 2015, with Maine and Louisiana looking to follow.
- Fixed Charges: A whopping 61 utilities proposed an increase in fixed charges in 2015. Given that fixed charges apply regardless of how much energy a customer purchases, these policies can significantly impact the financial value of switching to solar. Of the 61, 36 were decided and 16 were rejected. Not surprisingly, we’ve been hearing more and more conversations about improvements in battery and storage technology. Will off-grid systems be a growing trend in this report next year?
- Cost Benefit Analysis: Net metering policies and fixed charges are both based on the presumption that we have been able to quantify the value of solar in the grid. As such, there is also a growing legislative trend towards efforts at studying this value in the hopes of better informing future policies.
- Community Solar: Community solar, the concept of crowd-funded solar farms that share the tax benefits and rebates amongst their investors, is one of the most recent policy trends in the solar space. At the end of 2015,14 states had enacted community solar legislation with Xcel Energy’s Minnesota program being the most substantial. They got a little more than they bargained for with more than 1,500 applications representing 1,400 MW in the queue as of January 2016.
- PPA legislation: Only eight states have come outright and specified that third party ownership of solar systems is illegal, while another 16 have somewhat outdated language that makes the legality of this structure uncertain. Outcomes have been largely determined by relative strength of solar-friendly vs utility-backed lobbying efforts.