Rising Trends in Solar Regulation: States Launch Studies on Net-Metering

As the United States accelerates its transition toward renewable energy, solar power has become a central focus of policy development. The recent Q2 2024 report titled "The 50 States of Solar," released by the North Carolina Clean Energy Technology Center (NCCETC), offers a thorough examination of the ongoing legislative and regulatory changes in distributed solar policies across the country. The report shines a spotlight on the significant efforts by 44 states, along with the District of Columbia and Puerto Rico, to refine and adapt their solar regulations, particularly in the areas of net metering, community solar, and residential tariffs.

This article delves into the key findings of the report, exploring the most prominent trends in solar regulation, the states leading the charge, and the implications of these developments for the future of distributed solar energy in the U.S.

Understanding Net Metering: The Core of Solar Regulation

Net metering is a pivotal policy mechanism that allows solar energy system owners to receive credit for the electricity they generate and add to the grid. As solar adoption grows, so does the complexity of net metering policies, making them a focal point for state legislatures and regulatory bodies.

The NCCETC report underscores that net metering was the subject of 64 distinct actions in Q2 2024 alone, with states like California, Arizona, and Connecticut taking the lead. These actions ranged from revising compensation rates to redefining the structure of net metering programs to ensure they remain equitable and sustainable as solar penetration increases.

Rising Interest in Net Metering Studies

One of the most significant trends highlighted in the report is the growing interest among states in conducting comprehensive studies on net metering. These studies are not merely technical reviews but are intended to guide the redesign and succession planning of net metering programs.

Rebekah de la Mora, a Senior Policy Analyst at NCCETC, notes that these studies focus on evaluating the economic and policy impacts of net metering, with some states like Puerto Rico incorporating study outcomes directly into legislation. In contrast, others, including Delaware and Washington, have introduced these studies as new legislative initiatives.

Key Policy Actions in Q2 2024

The Q2 2024 report catalogues a broad array of policy actions across the states, reflecting the diverse approaches to distributed solar regulation. Some of the most notable actions include:

• California's Regulatory Decisions: California remains at the forefront of solar policy innovation, with recent regulatory decisions addressing community solar and introducing income-fixed tariffs aimed at enhancing solar accessibility for low-income households.

• Alaska's Legislative Enactment: Alaska's policymakers have enacted new community solar legislation, marking a significant step forward in a state where solar adoption has traditionally lagged due to geographical and climatic challenges.

• Colorado's Program Modifications: Colorado has approved legislative changes to its community solar garden program, which is designed to expand access to solar energy for residents who cannot install solar panels on their properties.

• Connecticut and Washington's Net Metering Studies: Lawmakers in these states have initiated detailed studies to assess the current state of net metering and explore potential pathways for future program development.

• Kansas' Expansion of Net Metering: The Kansas legislature has broadened the availability of net metering, making it more accessible to a larger number of solar energy system owners.

The Role of the Inflation Reduction Act (IRA) in Solar Policy

The Inflation Reduction Act (IRA) of 2022 has had a profound impact on solar policy development across the U.S., with many states reevaluating their programs to align with the incentives and funding opportunities provided by the federal government. The NCCETC report notes that several states are actively considering how IRA funding can be leveraged to support and expand their distributed solar programs, particularly through initiatives like community solar and enhanced net metering schemes.

Community Solar Initiatives: A Growing Trend

Community solar programs, which allow multiple participants to share the benefits of a single solar installation, have gained significant traction as a means to expand solar access. The Q2 2024 report identifies 42 actions related to community solar policy amendments, with states like California and Colorado making significant strides in this area.

These programs are particularly important in urban and low-income communities where individual solar installations may not be feasible. By allowing residents to buy into a shared solar project, community solar programs provide a more inclusive pathway to renewable energy participation.

Challenges and Opportunities in Solar Regulation

Despite the progress highlighted in the report, the path forward for solar regulation is not without its challenges. States must balance the need to promote solar adoption with the realities of grid management, equitable cost distribution, and the evolving economics of renewable energy.

One of the key challenges is ensuring that net metering policies remain fair to all utility customers, including those who do not have solar installations. As more households and businesses generate their own electricity, utilities face the challenge of maintaining the grid and ensuring reliable service, which requires careful consideration of rate structures and compensation mechanisms.

However, these challenges also present opportunities. The ongoing studies and legislative actions highlighted in the NCCETC report are paving the way for innovative solutions that can enhance the sustainability and inclusiveness of solar energy programs.

Looking Ahead: The Future of Distributed Solar in the U.S.

The findings of the Q2 2024 report indicate a dynamic and rapidly evolving landscape for distributed solar regulation in the United States. As states continue to refine their policies, the focus on net metering studies, community solar expansion, and the strategic use of IRA funding will likely shape the future of solar energy in the country.

For policymakers, utilities, and solar advocates, the trends identified in the report offer valuable insights into the next phase of solar energy growth. As the U.S. moves closer to its renewable energy goals, the lessons learned from these studies and policy actions will be crucial in ensuring that the benefits of solar energy are distributed equitably and sustainably across all communities.

Conclusion

The Q2 2024 "The 50 States of Solar" report from NCCETC highlights significant advancements and emerging trends in solar regulation across the United States. With states taking decisive steps to refine net metering, expand community solar, and leverage federal funding, the future of distributed solar energy looks promising. These developments underscore the importance of adaptive and forward-thinking policies that can sustain the momentum of solar adoption while ensuring that the benefits are shared equitably across all communities.