States' policy action shapes the future of distributed solar

By Jodi Delapaz

© Copyright Agri-Pulse Communications, Inc.



WASHINGTON, Aug. 25, 2016 - A new report by the North Carolina Clean Energy Technology Center (NCCETC) found a “tremendous amount” of activity among the 50 U.S. states involving distributed solar policy.

The document, an update of the group's 50 States of Solar report for the 2nd quarter, 

focuses on net metering, distributed solar valuation, community solar, residential fixed charges, residential solar charges, third-party ownership and utility-led rooftop solar programs.

“We found a tremendous amount of activity across the U.S. in the last quarter,” says Brian Lips, report co-author and energy policy project coordinator at NCCETC. “Legislatures, commissions or utilities in almost every state proposed or adopted policy changes that will shape their distributed solar markets for years to come. From direct changes to net metering rules, to rate design revisions, there are many opportunities for state markets to be weakened or strengthened. States that were once dominant in distributed solar adoption may not be dominant in the future, just as states that have lagged behind may quickly jump to the front of the pack.”

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The report found that 42 states and the District of Columbia took some form of solar policy action during the second quarter of 2016.

Here are some of the key Solar Policy Actions in the quarter:

  • 42 utilities in 25 states plus D.C. had pending or decided requests to increase monthly fixed charges on all residential customers by at least 10 percent
  • 24 states considered or enacted changes to net metering policies
  • 15 states plus D.C. formally examined or resolved to examine some element of the value of distributed generation or the costs and benefits of net metering
  • 1 states took policy action on community solar
  • Eight utilities in six states proposed adding new or increasing existing charges specific to rooftop solar customers
  • Three states had policy action on third-party solar ownership laws or regulations
  • Three states had action on utility-owned rooftop solar policies or programs


Utility proposals to increase residential monthly fixed charges were the most common type of solar policy and rate design action during the quarter, the report found, with over one-fifth of all U.S. investor-owned utilities proposing increases of at least 10 percent.

“We are seeing no sign of decline in requests to increase residential fixed charges, while residential demand charge proposals have not yet picked up as many in the industry were expecting. However, in over half of the fixed charge decisions made this year, utilities were not granted any increase,” says Autumn Proudlove, report co-author and senior policy analyst at the NCCETC. A total of 121 state and utility-level distributed solar policy and rate changes were proposed, pending, or enacted in Q2 2016, the report finds.

The top five policy developments in the quarter were:

  • Arizona Public Service proposed changes related to fixed charges, demand charges, time-of-use rates, and net metering
  • A net metering compromise was reached in Massachusetts
  • Rhode Island passed a bill enabling community net metering and third-party ownership
  • New Hampshire became the next state to begin developing a net metering successor tariff
  • A ballot initiative was launched to contest the Nevada net metering decision and a recommendation from the Governor's New Energy Industry Task Force that the legislature grandfather existing net metering customers.

To view the executive summary of the report, click hereNCCETC is a public service center administered by the College of Engineering at North Carolina State University.

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