Freeing the Grid — Building Local Solar Markets, One State At A Time

It’s that time of year again … no, not when turduckens appear on dinner tables nationwide and it becomes somehow acceptable to call the marshmallow a vegetable. It’s time for the 2009 edition of “Freeing the Grid,” an annual report card to states on their net metering and interconnection standards. Together, these two key policies empower energy customers (that’s you) to go solar and reduce your utility bills.

Although there is still plenty of room for improvement, this year’s report shows solid progress across most states—an indicator that these once-obscure policies are becoming accepted best practices. Oregon was this year’s star pupil. Meanwhile, there were still a number of states that didn’t even show up to class. Want to see if your state made the grade? Download 2009’s Freeing the Grid here from the report’s lead author, Network for New Energy Choices.

They may sound wonky, but net metering and interconnection standards are the backbone of a strong rooftop solar market.

Interconnection standards are the technical requirements and legal procedures that allow a customer-sited generator to “plug-into” the electricity grid. This interconnection process should be governed by a transparent, non-arbitrary set of provisions that facilitate rather than hinder connection to the grid. Customers of all sizes and types should be able to connect to the grid without any excessive hassle or cost. You may be shocked to learn that utilities can and do find ways to prevent customers from connecting their shiny new solar energy systems to the grid unless state policy offers those protections. Well, it’s true.

Net metering is a simple billing arrangement that allows solar customers to get fair credit for the excess electricity their systems generate during daytime hours. Imagine if you have a system on your home but you’re at work when the sun is shining – or at a school that’s closed during the summer months. Even though the lights aren’t on, those systems are still reliably cranking out clean, reliable electricity that the local utility is delivering to others in the community. Net metering allows system owners to bank that power and save it for a rainy day (perhaps literally) when they need it. Under best practices, 1 kWh generated by the customer has the exact same value as 1 kWh consumed by the customer. Furthermore, states should not place arbitrary limits on the system size or the total number of customers that are allowed to participate.

Folks we talk to are generally surprised to learn that these kinds of limits would exist at all. But they most certainly do. Here in California there is a cap on the program once total customer-owned solar installed in any utility territory reaches 2.5% of the overall load. Once that limit is reached, new solar customers no longer get the benefits of net metering. Solar’s proven so popular in Northern California that we’re on track to hit that cap as early as next year. With leadership from Governor Schwarzenegger, PG&E has opted to voluntarily raise the program cap to 3.5% to give the growing solar market some run time. You can bet we’ll be working to officially raise that cap even higher when the state legislature starts up again in early 2010. New York is another example of well-intentioned net metering program gone awry. In this case, the law is being interpreted in a way that prevents most commercial energy systems from participating. Not only does that impede the state’s growing solar market (and all those green jobs we hear so much about), but we think it’s downright unfair to energy customers who want to generate their own electricity.

We’re working hard to make these policy changes state by state, but it’s incredibly helpful to have folks like NNEC, IREC and DSIRE give state leaders tools for getting it right. This stuff is complex, it’s new to many, and it can be tricky to get right. Freeing the Grid provides an effective roadmap for navigating that great unknown and getting straight to effective policies that are going to build local solar markets.

And states are busy proving that with the right guidelines and committed policymakers those changes can be made quickly and effectively. Utah for example moved from a lacklust “F” in net metering to a stellar “A” grade in just two years. In total, Freeing the Grid 2009 reports 27 states with good (A or B) grades in net metering standards, up from 13 in 2007. Eight states (Alabama, Alaska, Idaho, Mississippi, South Carolina, South Dakota, Tennessee and Texas) still do not have statewide net metering programs. On the interconnection side, 15 states now claim A or B grades, a whopping improvement over the one state to receive a B in 2007.

Now that’s something to be thankful for.