U.S. State Renewable Energy Policy Progress Abounds

This year marks the fourth edition of Freeing the Grid, an annual report on state net-metering and interconnection practices. Together these two policies – one that lets electric meters spin backwards and one that allows customers to “plug” into the electricity grid – help consumers meet their own electricity needs through distributed renewable energy such as solar PV. Since the first report was issued, just four short years ago, both the report itself and the programs it examines have evolved to become real contributors to our nation’s renewable market.

In 2006, net metering and interconnection rules demonstrated just how diverse America’s 50 different states can be.  There was a patchwork of well-intended renewable policy concepts making their way through about a dozen state legislatures.  There was little in common from one state to the next and it was very hard to tell which states were doing what and even harder to tell what was working and what was not.

We envisioned creating a singular document that defined best practices and compared and contrasted programs in different states. We imagined that Freeing the Grid would be a comprehensive guide that the states could follow to avoid pitfalls on the path to effective program design.

The timing couldn’t have been better as the Federal Energy Policy Act of 2005 required the states to assess their net-metering and interconnection programs and create or revise statewide policy to address any shortcomings. With utility commissions from coast to coast opening dockets, conducting workshops and otherwise taking public comments, there was a clear need for accessible and informative resources.

The Interstate Renewable Energy Council (IREC) put its policy insight to work defining best practices in its 2007 release of Model Rules for Net Metering and Interconnection and the Connecting to the Grid guide – two additional resources that continue to provide invaluable guidance to policymakers to this day. Freeing the Grid looks at existing programs through the lens of those IREC best practices and grades each state on their practices.

In the years since 2006, we’re proud to see Freeing the Grid continue to serve as a barometer of existing practices and a catalyst for additional improvement. The report card has armed local advocates with ammunition for change. And the policy guide has provided a roadmap to local policymakers navigating complex program structures.

And while international and federal leaders continue to wrestle over policy solutions, our report indicates just how much the U.S. states are doing to drive our nation’s renewable energy economy forward. In the 2010 report, 37 states received “A” or “B” grades for their net metering policies, up from just 13 states in 2007.

In addition, 20 states received “A” or “B” grades for good interconnection practices, a tremendous improvement over the solitary “B” grade awarded in 2007. In those few short years, there has also been increasing uniformity across state lines, particularly at the regional level, where states looks to their neighbors for the best practices.

As state policies have evolved to meet the changing needs of energy customers, a maturing industry, and a dynamic economy, Freeing the Grid has similarly evolved to reflect new policy mechanisms and best practices. In recent years, the report has assessed state policies for third-party Power Purchase Agreements, the interplay between self-generation policies and effective Feed-in Tariffs for wholesale generation, and, in this latest edition, innovative community models that allow consumers to reap the benefits of shared or remote renewable energy systems.

Of course, for all the advances, there is still plenty of room for improvement. Some states still don’t have any statewide net-metering policy, with Texas serving as one whopping example. Maryland is another state that experienced set backs in its Freeing the Grid scores. But as states increasingly recognize the inherent value of building strong local renewable energy markets, the positive policy momentum is undeniable.

Here are a few bright spots from this year’s report:

* Two states with double “A” marks.  Until this edition not many states could claim high marks in net-metering or interconnection rules. And no state could claim an “A” in both. In 2010 we have two states that share that distinction for the first time: Massachusetts and Utah. Nothing like a leadership position to keep these states working to stay on top. And nothing like a little friendly competition to drive “A” grades in more states.

* Net metering for all. One of our biggest pet peeves is when net-metering programs restrict customer classes from participating.  When it comes to energy consumers meeting their own electricity needs through solar, what is good for homes, is good for business, is good for industry. Fortunately, that distinction is not used very often these days. New York and Indiana were the last two states to impose restrictions on the basis of customer class and it seems that the last pillar is about to fall.  Indiana stands at the ready to remove that final hurdle and allow all customers to participate in net-metering programs.

* Community Solar. Leading solar states are now starting to adopt net-metering policies that support shared community solar programs. These community solar models are intended to empower a broader segment of the population – renters, for example, and buildings without optimal solar siting opportunities – to go solar. Although the programs themselves come in many different forms, they primarily function by de-linking solar generation and the customer load through new net-metering structures: meter aggregation in Pennsylvania, virtual net-metering in Massachusetts, and shared community solar gardens in Colorado.

Progress abounds. We continue to hear state policymakers affirm their commitment to further improvements in the coming year.  Considering the challenging political environment and fragile economy, there’s never been a more critical time to work on these core elements of a strong state renewable market.

Finally, we have not always enjoyed handing out the poor grades — we much prefer the success stories.  We understand that its hard to accept a lesser mark in comparison to your peers. For those states that have not made the mark, changing the grade is very simple: just improve your clean energy economy. A new report comes out next year.

You can access the full report here.

James Rose (left) is a Senior Policy Analyst at Network for New Energy Choices and lead author of Freeing the Grid. 



Shaun Chapman (left) is Director of East Coast Campaigns for Vote Solar and co-author of Freeing the Grid.

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