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Policy Needs

If solar panels were free and handed out on street corners, what would happen? Unfortunately, not as much as you think. Many states impose significant regulatory barriers to customer self-generation. The solution? We need to re-think the regulatory infrastructure in order to allow for electricity consumers to generate their own clean energy.

In the case of solar energy, there are four key buttons that must be pushed in order to make the market work. It's wonky, so bear with us:

  1. Financial support. Solar is currently expensive. The key to bringing down costs is in building economies of scale — the price history of solar shows that for every doubling of demand, costs have come down about 20%. The more investment now, the sooner solar will reach price parity with other electricity sources. For the short term, temporary support is necessary, which can come in the form of public goods funds, tax credits, or a renewable portfolio standard (RPS) with a solar carve-out.
  2. Standardized interconnection procedures. Most buildings with solar systems also remain connected to the grid, for electricity when the sun is not shining. Without rules to make the process of interconnecting to the grid transparent and non-arbitrary, utilities can and do kill projects before they get off the ground.
  3. Net metering. This is a policy that allows solar systems to get credit for electricity fed into the grid. During the day, your meter rolls backwards, and at night, forward again as you use the banked credit. This makes solar installations more economical, and reduces costs for all other ratepayers by maximizing production during peak demand periods when electricity is the most expensive.
  4. Fair rate design. When utilities devise rate structures with large fixed charges and smaller kWh energy charges, it discourages investments in solar and energy efficiency by making it harder for these investments to pay for themselves (more fixed costs mean less savings can accrue from the customer's generation). Time-of-use tariffs without demand charges allow system owners to recoup their investment, but also fairly compensate solar systems for their contribution as a peak shaving resource.

It's dry as toast, but trust us: all four of these elements need to be in place in order for a robust solar market to develop. As electricity is largely regulated at a state level, Vote Solar is working in key states to optimize the regulatory infrastructure to allow solar to come to scale. Join us.