Policy trumps sunshine as a solar resource

The future looks bright for solar in the U.S. That’s according to a recent UC Berkeley study that claims that by 2050, solar power could supply a third of all electricity demand in the country’s western states.

Top solar states

The Berkeley researchers are not alone in identifying the huge potential of solar energy. A report from the nonprofit advocacy group Environment America looks to what our top 12 solar states are doing as a model for what could happen in the rest of the U.S. As Rob Sargent, the group’s energy program director, points out, the success of solar in these states “should give us the confidence that we can do much more.”

What would it take to do more throughout the U.S.?

The Berkeley study ties future solar growth in the U.S. to the success of the SunShot Initiative. That program aims to lower the soft costs of solar and to invest in research and development, including better storage technology.

But these advances alone are not enough, as the Berkeley study acknowledges. A look at Environment America’s top 12 solar states makes it clear that a key ingredient for success must be favorable solar policies. Standing out among these at the state level:

  • Net metering: Net metering policies let customers offset their electric bills with onsite solar and receive reliable and fair compensation for the excess electricity they provide to the grid. Not surprisingly, what utilities consider fair is not necessarily a rate that’s favorable to solar customers.
  • Renewable portfolio standards (RPS): RPS policies require utilities to provide a certain amount of their power from renewable sources; some set specific targets for solar and other renewables. Robust RPS policies in not-so-sunny New Jersey and Massachusetts helped those states make the top 12 list. And it turns out that California’s aggressive RPS of 33% renewable energy by 2020 is not bankrupting the state, or its residents.
  • Strong statewide interconnection policies: Solar projects can experience significant delays and hassles just to get connected to the grid. That makes good interconnection policies crucial to the success of solar.
  • Financing options: Financing is often the biggest obstacle to solar adoption. Those obstacles can be surmounted with policies that support creative financing options like third-party ownership (TPO) and property assessed clean energy (PACE). Attesting to the significance of TPO is the fact that in top state Arizona, it accounted for 86% of all residential PV installed in Q1 2013.

Federal and local policies

Policies beyond those at the state level are also important for solar. The federal government must play a role, and Environment America urges continuation of the federal Investment Tax Credit, responsible development of solar resources on public lands, and support for R&D to reduce the cost of solar and help incorporate large amounts of solar into the grid.

The local level can’t be ignored. Environment America touches on this, noting a slew of policies that local governments should support: solar rights laws, PACE programs, feed-in tariffs (FITs), and solar-friendly zoning rules. A great example of how effective local policies can be is a city like Gainesville, Florida, whose FIT has put it on the map as a solar leader. This is particularly noteworthy because the Sunshine State doesn’t appear anywhere on the list of top solar states, despite its abundant solar resource. Lancaster, California, is another city taking matters into its own hands. The city began by streamlining the solar permitting process and now requires solar on every new home. Cities like these point to the power of local policies, and the ability of local governments to get things done.

A local policy conspicuously absent (at least to some of us) from Environment America’s report is one that’s been growing in popularity: community choice energy, also called community choice aggregation (CCA). This model allows local governments to pool residential, business, and municipal electricity loads and to purchase or generate on their behalf. It provides rate stability and savings and allows more consumer choice and local control. The model need not be focused on clean energy, but it has been in California, where Marin Clean Energy, the first CCA in California, was enabled by a state law — highlighting the interplay of state and local action. Another interesting aspect of CCA is that it can work in conjunction with other policies, like FITs and virtual net metering. 

The value of net metering

That brings us back to net metering. Never mind virtual — basic net metering has been getting a lot of attention. Utilities are attacking it in a number of states, claiming it’s unfair to ratepayers who don’t go solar. On the other hand, proponents of net metering say utilities’ fighting stance is driven by worries about their bottom line, not concern for their customers.

Studies in California, Vermont, New York, and Texas have found that the benefits of net metering (like savings on investments in infrastructure and on meeting state renewables requirements) outweigh the costs (like the lowered revenue to cover utility infrastructure costs). Many are eagerly awaiting a  California Public Utilities Commission study due later this year, in the hopes that it will provide a relatively unbiased look at the issue. But a recent Rocky Mountain Institute report came to the unsatisfying conclusion that more investigation needs to be done to understand the real value of distributed solar.

Meanwhile, some states continue to pursue virtual net metering policies. Under Colorado’s Solar Gardens Act, for example, utility customers can subscribe to power generated somewhere other than their own homes. The program allowed by that bill sold out in 30 minutes, evidence of the pent-up demand for this kind of arrangement. And California solar advocates are hoping for passage of a “shared renewables” bill in that state, which would provide for similar solar installations. Laws like these are significant in bringing solar power to the estimated 75% (likely a conservative number) of us who can’t put solar on our own roof.

The greatest solar resource

It will take a variety of policies at all levels to get solar beyond its current 1% or so of U.S. electric production and into the mainstream. When you see what supportive solar policies can do in places like Gainesville, Florida — or in areas with much less sun, like Germany — their importance becomes clear. That’s also apparent in the list of top solar states. Yes, some places have more sun and are ideal for solar power. But as a great a resource as the sun is, when it comes to actually implementing solar, policy may be our greatest resource.

This article was originally published on PV Solar Report

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