NewEnergyNews: TODAY’S STUDY: The Fight For Solar, Detailed

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    Tuesday, May 01, 2018

    TODAY’S STUDY: The Fight For Solar, Detailed

    50 States of Solar; Q1 2018 Quarterly Report

    April 2018 (North Carolina Clean Energy Technology Center)

    Executive Summary

    Overview Of Q1 2018 Policy Action

    In the first quarter of 2018, 40 states plus DC took a total of 149 actions related to distributed solar policy and rate design (Figure 1). Table 1 provides a summary of state actions related to DG compensation, rate design, and solar ownership during Q1 2018. Of the 149 actions catalogued, the most common were related to residential fixed charge and minimum bill increases (49), followed by DG compensation rules (39), and DG valuation or net metering studies (21).

    Top Five Solar Policy Developments Of Q1 2018

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

    Michigan Public Service Commission Staff Proposes Net Metering Successor

    The Michigan Public Service Commission (PSC) Staff published its final net metering successor tariff recommendations in February 2018, proposing an “inflow-outflow”, or net billing, structure. The Staff recommended opening a separate, contested proceeding to determine the outflow compensation rate. The PSC approved the inflow-outflow successor tariff in April 2018, but declined to open a proceeding to determine the outflow credit rate. Final tariffs will be approved in utility-specific rate cases.

    Massachusetts Department of Public Utilities Approves Mandatory Demand Charge for Residential DG Customers

    In January 2018, the Massachusetts Department of Public Utilities (DPU) approved Eversource’s proposed mandatory demand charge for new net metering customers. This is the first mandatory residential demand charge approved for an investor-owned utility in the U.S.* This follows legislation enacted in 2016, authorizing the DPU to approve a minimum monthly reliability contribution for net metering customers.

    NorthWestern Energy Publishes Montana Net Metering Cost-Benefit Study

    Pursuant to legislation enacted in 2017, NorthWestern Energy hired a consultant to conduct a study of the costs and benefits of customer generation. The study was published in late March 2018, finding the net value of solar to be 4.2 to 4.6 cents per kWh when avoided CO2 costs are included and 3.5 to 3.8 cents per kWh when avoided CO2 costs are excluded.

    Utilities in North Carolina and Virginia File Proposed Community Solar Plans

    Duke Energy in North Carolina and Dominion Virginia Power in Virginia filed proposed community solar program plans during Q1 2018. Both filings were the result of legislation enacted in each state in 2017, creating pilot programs for utility-sponsored community solar. While Duke Energy’s proposed program requires an upfront participation payment, Dominion’s program would require a monthly per-kWh subscription fee.

    Illinois Commerce Commission Initiates DG Valuation Efforts

    The Illinois Commerce Commission initiated its distributed generation valuation and compensation reform efforts in Q1 2018 with the release of a white paper reviewing key considerations and approaches taken by other states. This effort will inform the development of a net metering successor tariff to take effect once the state’s aggregate cap is reached.

    The Big Picture: Insights From Q1 2018

    State Legislators Considering Over 50 Bills Related to Distributed Solar Compensation Policies and Studies

    Most states entered their 2018 legislative sessions during the first quarter of 2018, and state legislators considered over 50 bills related to distributed generation compensation and studies during the quarter. The majority of bills under consideration related to credit rates for excess generation, studies examining the value of distributed energy resources or costs and benefits of net metering, and aggregate caps on net metering. Massachusetts and Virginia considered the greatest number of bills during the quarter.

    Policy Discussions Broadening Scope From Solar to Distributed Energy Resources

    While net metering discussions have traditionally focused on distributed solar in particular, state policy proceedings are increasingly addressing the broader set of distributed energy resources, including energy storage and electric vehicles, as opposed to solar photovoltaics only. In Q1 2018, several states, including Arkansas, Connecticut, Illinois, Missouri, and New York, were involved in investigating the value of distributed energy resources.

    Value of Distributed Energy Resource Studies Exhibit Wide-Ranging Results

    Although more and more states are studying the value of distributed energy resources or working to develop value-based compensation structures, there has been little convergence in methodologies and resulting values. Two recent studies – NorthWestern Energy’s Montana net metering cost-benefit analysis and the Maryland Public Service Commission’s draft solar costbenefit study – demonstrate this. While NorthWestern Energy’s study identified a value ranging from 3.5 to 4.6 cents per kWh, the Maryland draft study identified a value of 25 to 40 cents per kWh.

    States and Utilities Taking Unique Approaches to Community Solar Program Design

    As the number of states adopting community solar policies increases, so has the diversity of community solar program designs. Minnesota is taking a value-based credit approach, Hawaii is moving toward time-varying community solar credit rates, and several other states use a virtual net metering model. Utilities in North Carolina and Virginia proposed community solar program designs in Q1 2018, with one planning an upfront participation fee and the other planning a monthly per-kWh subscription fee.

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