Observing solar policy on a state-by-state basis can make it difficult to see the bigger picture. A new report from the NC Clean Energy Technology Center (NCCETC) provides a needed overview of the state of solar in America. NCCETC’s 50 States of Solar Report demonstrates the aggressive oppositional stance utilities across the country have taken to the growth of consumer-owned solar.
Increases in fixed charges or minimum bills are the most common tactic. The report found a total of 44 actions taken involving proposed increases of either residential fixed charges or minimum bills of at least 10 percent in 26 states (plus D.C.) in the third quarter of this year alone. However, decisions on these actions were only made in eight cases. Of those eight, only one requested increase, in Wisconsin, was granted in full. The second most common action was a challenge to net metering. There were three dozen actions in a total of 24 states.
Community solar is growing slowly but surely. Thirteen states took some sort of policy action on community solar. To credit community solar customers for their power, some states are employing approaches that actively undervalue community solar and seek to discourage its deployment, such as crediting at avoided cost. Others are attempting to use community solar to address a wide range of issues with policies such as adopting adders for low-income customers. An average of a new state every quarter adopts a new community solar program, according to Autumn Proudlove, Manager of Policy Research for NCCETC.
Proudlove gave a number of reasons why utilities recently seem to favor increasing fixed charges and minimum bills to other means of revenue generation.
“Fixed fees and minimum bills provide a lot of certainty to utilities, which is highly desirable [to them],” Proudlove said. “Fixed fees are also a standard feature in utility rate design, so there’s familiarity with them on the part of both customers and regulators as well. However, we are seeing increased interest in time-varying rates from both utilities and other stakeholders.”
Proudlove believes that the record is mixed concerning the speed of the rate of adoption of community solar in the U.S.
“I think it depends,” Proudlove said. “If you are comparing it to the rate at which states have adopted community solar policies in the past, action like this is now occurring more frequently. However, compared to the rate of change seen in net metering policies, community solar action is occurring at a slower pace, and with fewer states engaged in these discussions.”
The lack of political will on the part of state legislatures is, according to her, one reason for the slow growth. She also pointed out that there is a lot of community solar activity occurring independently of state policies: many utilities are voluntarily developing programs, so some states might not see the adoption of a statewide policy as an urgent matter. In many cases, well-organized investor owned utilities are actively using their political influence to either thwart or co-opt community solar.
Among its top five policy developments in the quarter, the report describes a disturbing development: two states – Kansas and Idaho – now accept the concept of separate rate classes for distributed generation customers. Proudlove says that “a large portion” of utility proposals were related to declaring these customers as a separate rate class, leading possibly to more proposals for demand charges or additional fixed fees.
She believes that the case of Nevada and its elimination and subsequent restoration of net metering has had an impact on the things that utilities are asking for in their proposals.
“Certainly grandfathering has been given much more attention,” Proudlove said. “Since Nevada, I haven’t seen a proposal that does not include at least some degree of grandfathering for existing net metering customers. I also think that there’s been a more concerted effort to engage stakeholders and work collaboratively toward solutions. There are still contentious proceedings, of course, but increasingly, we’re seeing these result in settlement agreements with broad support.”