The report describes the key policies and program strategies that have emerged as effective tools for states to advance wide-spread solar deployment. The report’s recommendations are based on the input and lessons learned of the members of the Clean Energy States Alliance, a coalition of state clean energy funds working together to support renewable energy technologies.

The report recommends that states serious about local market-making focus on the following interventions:

• Provide predictable, long-term financial incentive support for solar projects
• Establish “PV friendly” laws such as expanded net metering, simplified interconnection standards, streamlined local permitting, and renewable portfolio standards with solar targets
• Ensure sensible incentive program design to reduce customer transaction costs
• Stimulate favorable solar financing programs
• Commit to use of solar on public buildings
• Support local work force training and development
• Educate consumers on the merits of solar

The report also provides specific examples of state program features and policies that we believe to represent “best in class” approaches.  It is hoped that states will use the report as a blueprint for actions they can pursue to effectively mainstream solar electricity.

Download the report
File format: PDF
Source: Clean Energy Group  

The majority of states in the U.S. have established a Renewable Portfolio Standard (RPS) that requires utilities to supply a specified percentage of electricity used from renewable resources. An RPS represents an important tool to expand state solar markets if designed with differential support for solar technologies. However, a traditional RPS – where all eligible renewable resources compete – supports least-cost projects such as wind and landfill gas, and is unlikely to provide adequate support for smaller-scale solar distributed energy due to cost and solicitation barriers.

In recent years, states increasingly are providing differential support for solar with an RPS in two ways. First, eleven states now have established a solar share or set-aside – a requirement that some portion of the RPS come from solar resources specifically, or distributed generation more broadly. Second, several states use a solar “multiplier”, giving more credit to solar electricity than other forms of generation toward meeting RPS targets. These mechanisms attempt to strengthen solar markets by allowing solar technologies to compete against less costly renewable technologies, and are becoming more popular and increasingly driving solar development.

According to analysis by Berkeley Lab[1], states are moving toward set-asides and away from multipliers due the greater success with the former approach. RPS policies that only have credit multipliers for solar have not yet seen significant solar additions.

New Jersey has been most aggressive in its use of a solar set-aside, with 2% of its RPS target required to be delivered from solar PV systems, requiring 1800 MW AC of solar by 2021. New Jersey’s solar development targets are the largest in the country on a per capita basis and are now driving the high growth in PV installations in the state. 

Berkeley Labs reports that the impact of state RPS set-asides on solar PV already has been substantial. Excluding California, 67% of PV additions from 2000 through 2006 came from states with active RPS solar targets. Further, the future impact of existing state RPS solar set-asides could be sizable: 400 MW in 2010 and 2000 MW by 2015, assuming full compliance.

For an RPS to significantly benefit solar technology and markets, a solar set-aside requirement appears to be necessary. States with an RPS should consider requiring a specific solar share percentage in recognition of the special benefits of solar installations (e.g. local job creation, ease of siting, used primarily at the point of generation, no adverse environmental impacts). However, according to Berkeley Lab, contracting and incentive policies are critical to the success of a solar set-aside.  Reliance on short-term Renewable Energy Credits (REC)[2] purchases to meet a solar RPS is likely to be costly and ineffective. States therefore should encourage or require long-term REC contracting and/or provide up-front payments for small PV systems.

Both Maryland’s recent RPS law and New Jersey’s new solar REC program provide good examples of state approaches.  For Maryland’s approach, see http://www.dsireusa.org/library/includes/incentive2.cfm?Incentive_Code=MD05R&state=MD&CurrentPageID=1.  For New Jersey’s program, go to: http://www.njcleanenergy.com/renewable-energy/programs/solar-renewable-energy-certificates-srec/new-jersey-solar-renewable-energy