Major Solar Policy Shifts Across the U.S. in Q2 2024

t's mid-2024, and the solar energy scene in the U.S. is heating up. The U.S. Energy Information Administration (EIA) is forecasting that solar power will comprise 5.6% of the nation's total electricity generation this year, leaping from 4% in 2023. By the time we roll into 2025, experts project this fraction to rise to 7%. Clearly, solar energy will be the superstar of American power sector growth for the next couple of years.

However, the pace at which solar is being adopted isn't uniform across the board; it differs from state to state. California confidently leads the pack with a whopping 28.80% share of its energy derived from the sun. Yet, don't write off other states - they are quickly catching up. For example, new solar installations in Texas, Florida, and North Carolina have been showing impressive growth of late as a result of pro-solar state policies, declining costs when it comes to solar technology itself, and growing consumer interest.

Each state is thoughtfully tweaking its policies to increase the use of solar power, elevate its local energy market, and reach green targets. Experts at the N.C. Clean Energy Technology Center (NCCETC) have taken a deep dive into the latest state-level regulatory talks and legislative debates, highlighting the five key solar policy developments in the second quarter of 2024. Stay tuned with SunValue as we explore these changes.

Source: N.C. Clean Energy Technology Center (NCCETC)

Top Five Solar Policy Developments

It's been an action-packed quarter in the solar policy space, with 44 states and Washington, D.C., along with Puerto Rico, making major moves. Now, let's turn our attention to the top five fresh changes.

1. Big Moves in California

California has always held the torch high when it comes to green energy initiatives. In Q2 2024, news came from the California Public Utilities Commission (CPUC) in the form of two major decisions that move the needle: one pushing community solar forward and another reworking residential fixed charges based on income levels.|

Expansion of Community Solar

The CPUC has rolled out a new Community Renewable Energy Program designed to expand the use of solar panels in California. This program, designed to strengthen the existing Green Tariff Programs, is intended to create a strong foundation for community solar projects through long-established procurement mechanisms like the Renewable Energy Market Adjustment Tariff and PURPA Standard Offer Contract. This means more people, especially those from underserved communities, now have access to and can reap rewards through solar energy.

Income-Based Fixed Charges

The Commission has also introduced income-based residential fixed charges in an effort to democratize solar energy across the state's investor-owned utilities. This would range from $6.00 to $24.15, depending on your household's financial capabilities. With this move, the systems will not outprice lower-income families, hence enabling more homes from the diversity of economic backgrounds to go solar.

2. Alaska's Leap Towards Community Solar

Alaska is not necessarily a state one might view as a solar champion. Still, in the second quarter of 2024, it made a big step forward: its state Legislature required all Commission-supervised utilities to actively participate in community energy programs. That same law requires the Regulatory Commission of Alaska to develop a set of guidelines for such programs, including calculating bill credit rates that truly represent the financial significance of these communal solar installations. The Commission shall also have the authority to establish a separate rate for the energy capacity from all storage systems used in such community setups.

Another interesting part of this law is that it gives the Commission power to set prices on the basis of storage capacity. This is crucial in Alaska, which relies on battery storage solutions to ensure a reliable and efficient energy service, especially in remote areas where maintaining a stable power supply becomes quite difficult.

3. Colorado's Community Solar Overhaul

Colorado once again demonstrates its leadership in the realm of community solar. In May 2024, the state's General Assembly passed some crucial amendments to the established Community Solar Garden Program. Scheduled for 2026, these changes are centered around improving inclusivity and accessibility in solar energy.

Solar Power for All

Under the revised scheme, over half (51%) of a facility's subscriptions are to be set aside specifically for customers that meet specified income criteria. Moreover, the program permits the transfer of any surplus credits directly to subscribers, so that the benefits of the efficient solar energy are spread more evenly.

Maximizing Funding Benefits

In addition, Colorado's policy makers have specified that the ceilings on subscription payments will change based on the deployment of the Inflation Reduction Act (IRA) funds. By leveraging this approach, community solar projects can capitalize on all available financial support, making electricity generated by solar panels cheap for everyone taking part.

4. Fresh Looks at Net Metering in Connecticut and Washington

Net metering, an essential pillar in the US solar energy scene, is a mechanism that credits solar panel owners for every bit of surplus power they pump back into the shared electric grid. The second quarter of 2024 saw both Connecticut and Washington seriously reexamining and possibly reshaping their net metering policies.

Connecticut's Solar Future

Connecticut legislators have initiated a study on the effectiveness of the state's present Renewable Energy Solutions Program, and its possible alternatives. The results of the study are to be used to determine if the program requires an extension and what changes could help expand the use of solar power.

Washington's Solar Value Research

A similar in-depth study is underway in Washington. It will examine the value of distributed solar plus storage and come up with strategies it can adopt when it reaches its aggregate net metering cap. All these studies are truly significant in formulating good policies that will not only fuel growth but also maintain fairness and contribute to grid stability.

5. Kansas Gives Net Metering a Big Boost

The Kansas Legislature took a major step towards promoting the use of solar energy in April 2024. They passed a legislation that raises the total limit for net metering and the maximum size limit of individual systems.

Increased Caps and Size Limits

From now until July 2027, the total limit will gradually rise each year by 1% based on the maximum annual demand recorded by the utility company since 2014. This will continue until it peaks at 5%. In a bid to offer more flexibility and motivation, the individual system cap has also been increased to 150kW for all customers. This adjustment invites both homeowners and businesses to install more high efficiency PV panels.

Time-of-Use Rates

The recent law also = lays out the rules for net metering compensation under time-of-use rates, making sure that those producing solar energy get the right compensation based on when they feed energy into the grid. This approach not only promotes smarter energy production and usage, but also aligns perfectly with larger-scale attempts to improve the efficiency and robustness of the grid.

Recent Solar Policy Developments in the U.S. (Q2 2024)

The second quarter of 2024 has seen significant advancements in solar energy policies across the United States. The U.S. Energy Information Administration (EIA) projects that solar power will account for 5.6% of the nation's total electricity generation this year, up from 4% in 2023, with expectations to reach 7% by 2025. These changes are driven by state-level initiatives aimed at increasing solar adoption, reducing costs, and enhancing consumer interest.

Key State-Level Solar Policy Updates

1. California's Proactive Stance: California continues to lead with 28.80% of its energy derived from solar. The California Public Utilities Commission (CPUC) introduced two significant decisions: a new Community Renewable Energy Program to expand solar access, especially to underserved communities, and income-based residential fixed charges to make solar energy more affordable for lower-income households.
2. Alaska's Community Solar Initiative: Alaska has mandated all Commission-supervised utilities to engage in community energy programs, with the Regulatory Commission of Alaska developing guidelines for bill credit rates and storage system pricing. This initiative aims to improve energy reliability, particularly in remote areas.
3. Colorado's Inclusive Solar Policies: Colorado has amended its Community Solar Garden Program to allocate over half of facility subscriptions to income-qualified customers and adjust subscription payments based on the deployment of Inflation Reduction Act (IRA) funds, enhancing solar accessibility and affordability.
4. Net Metering Revisions in Connecticut and Washington: Both states are conducting studies to evaluate and potentially revise their net metering policies. Connecticut is assessing its Renewable Energy Solutions Program, while Washington is examining the value of distributed solar plus storage, aiming to maintain grid stability and fairness.
5. Kansas' Net Metering Expansion: Kansas has increased the total limit for net metering and the maximum size limit of individual systems, with a gradual rise until 2027. The new legislation also introduces time-of-use rates for net metering compensation, promoting efficient energy production and usage.

These policy shifts highlight the dynamic nature of the U.S. solar energy landscape, with states actively working to enhance solar adoption, ensure equitable access, and leverage federal support to drive sustainable growth.

Summing Up

The last three months of 2024 have been quite exciting in the realm of solar policy throughout the United States. Whether it's been great community solar initiatives going strong in California and Alaska, or a hefty boost to net metering availability in Kansas, these key policy actions are spurring the progress of solar energy and making it more obtainable for more people.

With every state hustling to maximize federal funds and conducting in-depth research driving policy-making the future is all set to sparkle for solar. These actions are not only about promoting resilience and sustainability, but also about making sure solar power benefits don't skip any community.

Sources:

https://www.eia.gov/todayinenergy/detail.php?id=61203

https://www.seia.org/state-solar-policy/california-solar

https://nccleantech.ncsu.edu/wp-content/uploads/2024/07/Q2-24_SolarExecSummary_Final.pdf