With the congressional passage last month of a five-year extension of the Investment Tax Credit (ITC), the solar industry received an unprecedented acceleration in development of the clean-energy source. The Solar Energy Industries Association says the extension of the ITC will push U.S. solar capacity from a current level of just more than 24 gigawatts (GW) to well more than 90 GW by 2020, and double the jobs in the sector to more than 420,000.
However, with the relative certainty of solar policy now established at the federal level, renewed focus must be placed on policies that states have implemented – or plan to implement – to sustain the growth of this needed, clean source of power.
A recent analysis from Vote Solar, a multi-state, grassroots advocacy group, and the Interstate Renewable Energy Council (IREC), a New York-based think tank, indicates there is much work to be done. The assessment, which is the latest in a series of “report cards,” analyzed two distinct solar policy areas in each of the 50 states ‑ interconnection standards and net metering.
Interconnection procedure grades are based on rules and processes that an energy customer must follow to be able to ‘plug’ their renewable energy system into the electricity grid. The process, the authors say, should be straightforward, transparent and fair. Half of U.S. states have good “A” or “B” grades, and the remaining need improvement, according to the assessment, known as “Freeing the Grid.”
Drawing greater media attention of the two policy areas is net metering. The “report card” bases its grade for that policy on state provisions that ensure renewable energy customers, such as homes and businesses, with rooftop solar panels, receive full credit on their utility bills for valuable clean power they deliver to the utility grid. In 2015, six states improved their net-metering grade compared to the previous year, and now more than two-thirds of U.S. states qualify for good “A” or “B” grades under the policy. However, nine states received an “F,” including two – Nevada and Hawaii – that had scored good grades only the year before.
Nevada offers a quick case study of the need to maintain commitment at the local level to insure clean alternatives are given the best opportunity to grow and offer the optimum contribution to a state’s energy portfolio. The state drew an “F” from the Vote Solar/IREC assessment because of rules adopted last year by the Nevada Public Utilities Commission (PUC) to essentially gut a net-metering policy that has spurred significant solar growth in the state.
The changes went into effect Jan. 1 and lowered the net-metering credit for both existing and future solar customers from the retail rate to the wholesale rate, down from 11 cents per kilowatt hour (kWh) to 2.6 cents per kWh by 2020. It also raised the fixed rate – assessed by utilities to compensate for what they say are costs incurred for poles, wires, power plants and vehicle fleets, which are constant regardless of how much electricity the utility sells – by more than three-fold, from $12.75 per month to $38.51.
The changes drew heavy criticism from renewable energy advocates across the country, who said the lower remuneration rates and higher fixed fees essentially kill solar power in the state. Several major solar installers, including SolarCity, closed operations, costing Nevada thousands of jobs. In the state, solar customers filed a lawsuit against NV Energy, the state’s principal utility, and even the state’s Consumer Protection Agency petitioned the commission to reconsider its decision.
Given the outcry and subsequent pressure, it was not surprising when the PUC announced last week that it would consider reversing some of the rollbacks and “grandfather” in the state’s 17,000 existing solar customers. And NV Energy subsequently issued its own proposal to extend for 20 years the more generous remuneration to not only existing customers, but also to 13,400 residents and businesses that had applied for solar licenses while the retail-scale credits were still in place. The Nevada PUC says it will hear the proposals Feb. 8.
Nevada is just one of many states that have ongoing debates over solar policy. Similar fights over net metering and fixed utility rates are going on in Arizona, California, Hawaii and Wisconsin, among many others. The apparent road to some restoration of incentives for solar systems in Nevada is attributable to a steadfast coalition of champions who understand solar and other clean energy technologies are fast becoming an economic and environmental boon to the quality of life available to the state’s residents. As these policy debates continue in other states through 2016 and beyond, a similar commitment is needed from those on the ground who understand what is needed to achieve a clean energy future.