The N.C. Clean Energy Technology Center (NCCETC) recently released its 2018 annual review and Q4 update edition of The 50 States of Solar. The quarterly series provides insights on state regulatory and legislative discussions and actions on distributed solar policy, with a focus on net metering, distributed solar valuation, community solar, residential fixed charges, residential demand and solar charges, third-party ownership, and utility-led rooftop solar programs.
The report finds that 47 states and the District of Columbia took some type of distributed solar policy action during 2018 (see figure below), with the greatest number of actions relating to residential fixed charge increases, net metering policies, and community solar policies.
2018 Policy Action on Net Metering, Rate Design, and Solar Ownership
The report highlights ten of the top distributed solar policy trends of 2018:
- Compensation frameworks and program designs growing increasingly complex;
- States expanding opportunities for low-income customer participation in community solar programs;
- Policymakers and regulators authorizing solar-plus-storage net metering;
- Regulators approving residential demand charges for distributed solar customers;
- Companies seeking clarity on solar leasing legality;
- Requests to significantly increase residential fixed charges slowing;
- Solar policies being addressed within the broader scope of grid modernization;
- Mixed decisions on separate customer classes for distributed generation customers;
- States and utilities increasing rate options for customer-generators; and
- States exploring the locational value of distributed generation.
“The number of distributed solar policy actions has increased every year from 2015 to 2018,” observed David Sarkisian, Senior Policy Analyst at NCCETC. “The complexity of the policies under consideration has also increased as states move to account for temporal and locational value in compensation frameworks and to address the interaction of solar with complementary technologies like energy storage.”
A total of 264 state and utility level distributed solar policy and rate changes were proposed, pending, or decided in 2018. This represents an increase in activity over 2017 (249 actions), 2016 (212 actions), and 2015 (175 actions.) The report notes that ten of the most active states in 2018 for solar policy developments were:
Michigan where state regulators approved a net metering successor tariff and utilities filed proposals to implement the changes in their general rate cases;
- South Carolina, where legislators considered bills addressing the net metering aggregate cap and stakeholders reached an agreement to extend net metering until March 2019;
- New York, where regulators approved a tariff for solar-plus-storage facilities and continued to consider refinements to the value stack tariff;
- Massachusetts, where regulators approved the first mandatory demand charge for residential customer-generators of an investor-owned utility and legislators overturned the charge;
- Arizona, where regulators approved export compensation rates for Tucson Electric Power and UNS Electric, while rejecting the utilities’ proposed distributed generation rate design;
- Connecticut, where the General Assembly enacted a bill creating a new shared clean energy program and initiating a transition to a net metering successor tariff;
- Maine, where the Governor vetoed significant net metering legislation and the Public Utilities Commission restored net metering for medium and large non-residential customers;
- New Jersey, where the state legislature enacted a bill adopting a statewide community solar policy and increasing the net metering aggregate cap;
- Virginia, where a stakeholder process considering solar policy changes took place and regulators considered net metering rules related to small agricultural generators and meter aggregation; and
- Montana, where NorthWestern Energy published its net metering cost-benefit study and filed for approval of a separate class and demand charge for residential net metering customers.
“Distributed solar policy and rate reform continued to sweep the nation in 2018, with nearly every state considering changes,” said Autumn Proudlove, lead author of the report and Senior Manager of Policy Research at NCCETC. “We expect to see even more activity in 2019, as some states consider increasingly intricate policy designs.”
In Q4 2018, 43 states and D.C. took some type of action on distributed solar policy or rate design. A total of 152 actions were tracked in Q4.