NewEnergyNews: TODAY’S STUDY: The Fights Over Solar Right Now


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    Tuesday, May 09, 2017

    TODAY’S STUDY: The Fights Over Solar Right Now

    The 50 States of Solar: Q1 2017

    Autumn Proudlove, Brian Lips, David Sarkisian, Achyut Shrestha, April 2017 (North Carolina Clean Energy Technology Center)

    Executive Summary


    The purpose of this report is to provide state lawmakers and regulators, electric utilities, the solar industry, and other energy stakeholders with timely, accurate, and unbiased updates on how states are choosing to study, adopt, implement, amend, or discontinue policies associated with distributed solar photovoltaics (PV). This report catalogues proposed and enacted legislative, regulatory, and rate design changes affecting the value proposition of distributed solar PV during the most recent quarter, with an emphasis on the residential sector.

    The 50 States of Solar provides regular quarterly updates of solar policy developments, keeping stakeholders informed and up to date on a timely basis.


    The authors identified relevant policy changes through state utility commission docket searches, legislative bill searches, popular press, and direct communication with stakeholders and regulators in the industry.

    Questions Addressed

    This report addresses several questions about the changing U.S. solar policy landscape:

    • How are (1) state regulatory bodies and legislatures and (2) electric utilities addressing fast growing markets for distributed solar PV?

    • What changes to traditional rate design features and net metering policies are being proposed, approved, and implemented?

    • Where are distributed solar markets potentially affected by policy or regulatory decisions on community solar, third-party solar ownership, and utility-led residential rooftop solar programs?

    Actions Included

    This report focuses on cataloguing and describing important proposed and adopted policy changes affecting solar customer-generators of investor-owned utilities (IOUs) and large publicly-owned or nonprofit utilities (i.e., those serving at least 100,000 customers). Specifically, actions tracked in this issue include:

    • Significant changes to state or utility net metering laws and rules, including aggregate caps, system size limits, aggregate net metering rules, and compensation rates for net excess generation

    • Changes to statewide community solar laws and rules, and individual utility-sponsored community solar programs arising from statewide legislation

    • Legislative or regulatory-led efforts to study the value of solar, net metering, or distributed solar generation policy, e.g., through a regulatory docket or a cost-benefit analysis

    • Utility-initiated rate requests for charges applicable only to residential customers with solar PV or other types of distributed generation, such as added monthly fixed charges, demand charges, stand-by charges, or interconnection fees

    • Utility-initiated rate requests that propose a 10% or larger increase in either fixed charges or minimum bills for all residential customers

    • Changes to the legality of third-party solar ownership, including solar leasing and solar third-party solar power purchase agreements (PPAs), and proposed utility-led rooftop solar programs

    In general, this report considers an “action” to be a relevant (1) legislative bill that has been passed by at least one chamber or (2) a regulatory docket, utility rate case, or rulemaking proceeding. Introduced legislation related to third-party sales is included irrespective of whether it has passed at least one chamber, as only a small number of bills related to this policy have been introduced. Introduced legislation pertaining to a regulatory proceeding covered in this report is also included irrespective of whether it has passed at least one chamber.

    Actions Excluded

    In addition to excluding most legislation that has been introduced but not advanced, this report excludes a review of state actions pertaining to solar incentives, as well as more general utility cost recovery and rate design changes, such as decoupling or time-of-use tariffs. General changes in state implementation of the Public Utility Regulatory Policies Act of 1978 and subsequent amendments, including changes to the terms of standard contracts for Qualifying Facilities or avoided cost rate calculations, are also excluded unless specifically related to the policies described above. The report also does not cover changes to a number of other policies that affect distributed solar, including solar access laws, interconnection rules, and renewable portfolio standards. Details and updates on these and other policies and incentives are available at

    Executive Summary

    Q1 2017 Solar Policy Action

    In the first quarter of 2017, 40 states plus DC took a total of 134 actions related to distributed solar policy and rate design (Figure 1). Table 1 provides a summary of state actions related to net metering, rate design, and solar ownership during Q1 2017. Of the 134 actions catalogued, the most common were related to residential fixed charge and minimum bill increases (46), followed by net metering (31), and solar valuation or net metering studies (16).

    Top Five Solar Policy Developments Of Q1 2017

    Five of the quarter’s top policy developments are highlighted below.

    New York Issues Landmark Value of Distributed Energy Resources Order

    New York took a major step toward a net metering successor, finalizing a new Value of Distributed Energy Resources (VDER) tariff that will initially apply to new community solar and certain other large solar projects, with the goal of expanding the VDER compensation structure to all DER projects. The new rates will be comprised of the locational marginal price, a capacity value, an environmental benefits value, and a market transition credit.

    Maine Adopts a Net Metering Successor Tariff

    In Q1 2017, Maine became the fourth state to transition away from retail rate net metering, following Hawaii, Nevada, and Arizona. The Public Utilities Commission adopted a buy-all sell- all policy, which gradually reduces the transmission and distribution credit paid to customergenerators. The rules grandfather existing customers for 15 years.

    Indiana Bill to Eliminate Net Metering Moves Forward

    An active Indiana bill – S.B. 309 – would eliminate retail rate net metering in favor of a buy-all, sell-all policy. The bill passed the State Senate during Q1 2017 and the State House in early Q2. If enacted, customer-generators signing up after the state’s 1% aggregate cap on net metering is reached would be compensated at 1.25 times the average wholesale rate. All customer-generators would transition to the new compensation scheme in July 2027.

    Settlement Agreement Filed in Arizona Public Service Rate Case

    A settlement agreement with 30 signatories was filed in Arizona Public Service’s high-profile rate case during Q1 2017. The agreement includes several rate options for residential customers, including a time-of-use option without a demand charge. The agreement also sets the new credit rate for exported energy at $0.129 per kWh for the first year. The settlement is currently pending approval.

    Texas and Massachusetts Utilities Propose Demand-Based Minimum Bills

    In Q1 2017, both Oncor in Texas and Eversource in Massachusetts proposed demand-based minimum bills for residential DG customers. Structured as minimum bills, these demand charges would only be charged to the extent that a customer’s total bill falls below the demand charge. Eversource’s proposed minimum bill also includes a flat component.

    The Big Picture: Insights From Q1 2017

    Emergence of Proposed “Hybrid” Charges on Solar Customers

    Two unique proposals for new solar customer charges emerged in Q1 2017. Oncor’s proposed charge takes the form of a demand-based minimum bill, while Eversource’s proposed charge is a hybrid of a fixed charge, demand charge, and minimum bill. The introduction of new fees that do not fit neatly within the traditional definitions of fixed charges, demand charges, and minimum bills is an area to watch.

    Credit Rate Changes and Virtual Net Metering Dominate 2017 Net Metering Bills

    At least 65 bills pertaining to net metering have been introduced in state legislatures this session, as of mid-April 2017. While proposed changes relate to everything from equipment requirements to aggregate caps, the majority of bills address net metering credit rates and virtual net metering. This is consistent with overall action observed during Q1 2017, where 15 states took action related to the development of a net metering successor tariff or adjusting credit rates for excess generation.

    Requests to Increase Fixed Charges Struggle to Find Success

    Utility requests to increase residential fixed charges continued to struggle in Q1 2017, with no utilities receiving their full requested increase. Two requests were withdrawn during the quarter, and twelve decisions were made, in which two utilities received no increase and ten received only a partial increase. Overall, utilities were on average granted 16% of their requested increases during Q1 2017. Excluding withdrawn requests, utilities received 19% of their original requests on average.

    Community Solar Continues to Make Measured Policy Strides States continue to take slow, yet steady steps toward enabling community solar, with Virginia becoming the 17th state to adopt a statewide community solar policy this past quarter, following Illinois in Q4 2016, and Rhode Island in Q2 2016. At least five states without existing community solar policies saw legislation introduced this session to enable community solar.

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