Arizona, Illinois and Florida created
new programs this year for homeowners and businesses that want to generate their
own wind or solar energy. These programs are highlighted by the Network for New Energy Choices (NNEC), which issued its 2008 "report cards" this week.
The Freeing the Grid report grades state policies for allowing homeowners and small business owners who generate renewable energy to connect to the grid and receive credit for the electricity they produce.
This year’s report has a number of bright spots that are particularly welcome given the troubled economy, Americans’ desire for energy independence and widespread concern about climate change.
Highlights since the 2007 edition of Freeing the Grid include the following:
- Three states – Arizona, Illinois and Florida – took major steps forward by creating new programs for homeowners and businesses that want to generate their own wind or solar energy, connect to the grid and receive credit.
- Nine states significantly improved their regulations for allowing people who generate their own renewable energy to receive credit. The nine states are Arkansas, Kentucky, Massachusetts, Missouri, New York, Oregon, Rhode Island, Utah, and Vermont.
- Six states and the District of Columbia significantly improved their standards for connecting renewable wind and solar systems to the local electric grid–Maryland, New Mexico, North Carolina, Oregon, Pennsylvania, and Washington.
In his foreword to Freeing the Grid 2008, Congressman Jay Inslee of Washington State notes that well-designed state policies for renewable energy systems, "can read like ‘open for business’ signs to developers, manufacturers and innovative entrepreneurs. I encourage my fellow federal and state policymakers who want to realize a clean energy future to read this 2008 edition as a blueprint for how they can actively help to spur significant economic growth and energy security in their own states and communities," Inslee said.
The best state renewable energy policies are those that maximize credit for excess electricity sent to the grid, reduce unnecessary and burdensome red tape and special fees, set clear goals and targets, and provide incentives to encourage homeowners and businesses to install renewable energy systems.
States that perform poorly have policies that discourage homeowners and businesses from investing in renewable energy systems, for example, by requiring well-established, proven technologies to undergo rigorous, time-consuming, expensive reviews that dramatically increase the costs of the systems and the amount of time it takes for them to pay for themselves.
In addition to grading states on their policies, Freeing the Grid, serves as a cautionary tale of how even the best of intentions can be derailed by a poor regulatory process. The report’s "Worst Practices" section tells the sad story of Texas, which enacted a law designed to promote net metering "as rapidly as possible," only to see it derailed by industry opponents.
"Net metering" is the provision of a state’s law that allows customers to receive credit for the energy they produce when they are connected to the grid, but opponents of the Texas law took advantage of the fact that the legislation failed to define "net-metering." As a result, the law is currently interpreted in a way that removes most of the financial incentive from a customer-sited wind or solar energy system.
While the net-metering law the Texas legislature passed has the potential to earn an "A" from NNEC, they wound up with an "F" instead.
While the quality of net metering programs vary widely, today only
ten states are left without some type of statewide net metering
program–Alabama, Alaska, Idaho, Kansas, Michigan, Mississippi,
Nebraska, South Carolina, South Dakota, and Tennessee.
"If incentives are the engine that drives solar markets, net metering and interconnection standards are the road. Freeing the Grid provides policymakers with a map to sustainable solar development," said Adam Browning, of The Vote Solar Initiative.
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