A dozen states are leading the way on solar energy policy — what can the other 38 learn from them to reap the benefits?
Solar power in America is growing quickly, generating nearly half of all new electric generating capacity in the beginning of 2013. The technological efficiency is improving by the day. It has also gotten cheaper, with the price dropping 27 percent last year. Aside from the clean, low-carbon energy it provides — mainly during peak demand hours — 119,000 people currently work in the solar energy industry.
So what is the secret?
Environment America released a report today highlighting the twelve states that have found a successful policy approach to solar power which has enabled them to have installed 85 percent of the nation’s solar electricity capacity. The group, which Environment America termed the “Dazzling Dozen,” is comprised of: Arizona, California, Colorado, Delaware, Hawaii, Maryland, Massachusetts, Nevada, New Jersey, New Mexico, North Carolina, and Vermont. They have the highest per capita solar electricity capacity in U.S. Having lots of sun is not enough — they have pursued good policy to ensure they have a thriving solar industry. Here are a few of the policies that any state can adopt that could supercharge the solar industries of even small Northeastern states:
- Clean Energy Standards: Eleven out of the dozen have renewable electricity standards (RESs), while nine have solar carve-outs that ensure that a set percentage of the state’s electricity portfolio comes from solar energy. These policies help create markets for solar energy by ensuring a minimum amount of a utility’s energy portfolio comes from solar.
- Net metering: All but one state among this group have strong net metering policies that help prepare burgeoning solar markets. The report notes that in providing full market value for the electricity that solar homes generate, “Net metering ensures that consumers receive reliable and fair compensation for the excess electricity they provide to the grid.”
- Interconnection: Ten of the twelve states ensure that the process for linking up a home’s solar installation is quick and easy. Interconnection policies clarify the process by which utilities have to link up new solar installations to the grid. States and local governments can also create laws that protect the rights of homeowners to install solar panels on their own property.
- Creative financing options: Most states that do well in per capita solar installations use different methods of making solar affordable for more of their residents. Solar leases and third-party power purchasing agreements essentially allow a company or utility to pay to install the panels, while the consumer either benefits from low-price solar, or slowly pays off the lease payments over time. This allows the property owner to not have to worry about paperwork or maintenance, and economies of scale make this an attractive option to many. Property assessed clean energy (PACE) financing mirrors this no-hassle approach, but allows the consumer to slowly pay back the cost of the installation on their property tax bills.
These policy approaches have a serious impact on how much solar energy a state produces. State governments can set broad targets and take measures to make it easy for residents to buy panels and connect them to the grid. Local governments are able to clear the way in small-scale ways by ensuring property owners have the right to install solar panels on their property and investing in smaller solar projects in the community. The federal government can encourage solar development on public lands, promote research on new solar technology, invest in better grid technology, and continue to permit tax credits for solar energy.
Another benefit that states discover as they install more solar is that it requires fewer transmission lines, and more of the power that gets generated can actually be used because 5-7 percent of power wasted as it travels over lines. Solar energy is also produced at the right time: when demand spikes.
Three states sit at the top of the rankings:
Arizona’s early requirement that utilities had to receive a certain portion of their electricity from solar energy has made it the national leader in solar energy per capita — 167 megawatts per Arizonan. Total up the state’s utility-scale solar and you get 633 megawatts, with 495 on the way. Altogether
California leads the nation in total installed solar capacity by far, with 2,901 megawatts across the state through the end of 2012.
The report highlights New Jersey as a particularly clear example of how strong solar polices can manifest a great deal of solar power production in less than ten years. In 2004, the state faced increasing energy prices and wanted to generate more power from low-carbon sources. So it instituted an RES with a solar carve out of 2.1 percent by 2021, and took other steps to make solar energy affordable and easy for New Jersey residents. The effort has been so successful that the state now has more per capita solar energy than all but three other states (including California and New Mexico). Since 2012, New Jersey has installed 971 megawatts of solar power. Even Governor Chris Christie signed legislation to increase the solar carve-out to 4.1 percent by 2028.
The report also highlights the state of Minnesota, which this year set targets for solar power production, strengthened the state’s net-metering cap, and set a predictable rate for customers who install solar on their properties. The Texas cities of Austin and San Antonio, as well as Gainesville, Florida have made recent strides in solar, though it remains to be seen if they will power the rest of their states into the rankings.
All this said, solar has a long way to go — despite its fast growth, it still provides only a small percentage of renewable energy production, let alone total energy production. The potential is there. Rooftop solar systems, nationwide, could generate at least 20 percent of current U.S. electricity generation. The U.S. will need to have several dozen “Dazzling Dozens” to meet the potential 20 percent, but the policy pathway is ready and waiting.