State Solar Policy: Overview & Trends

1. State Solar Policy: Overview & Trends Rusty Haynes N.C. Solar Center N.C. State University NCSL Solar Energy InstituteWashington, D.C. October 19, 2007

2. Presentation Outline • Financial Incentives to Promote Solar • Regulations & Policies to Promote Solar • Overview of DSIRE

3. State Financial Incentives for Solar • Direct Incentives • Rebates (17) • Grants (14 + DC) • Production Incentives (3) • Tax Credits/Deductions/Exemptions (22) • Low-Interest Loans (20) • Sales Tax Exemptions (15) • Property Tax Incentives (26) • Industry Recruitment Incentives (9)

4. Public Benefit Funds for Renewables DSIRE: www.dsireusa.org October 2007 Cumulative, 1998-2017 (millions of $) $10 $111 VT: $36 $95 MA: $383 $85 $22 $1,122 RI: $10 CT: $338 $80 NJ: $279 $20 $127 DE: $11 DC: $10.5 $2,048 16 states + DC $4 billion by 2017 Funded by voluntary contributions

5. Direct Incentives for Solar PV DSIRE: www.dsireusa.org October 2007 15 - 54¢/kWh VT: $1.75-3.50/W U $2/W $3.50/W U U NY: $4-5/W MA: $2+/W $1 – $2.25/W $1.50-$2/kWh-1 yr. U U CT: $5/W U U 50% • 22 “state” programs • (includes CO, NV, AZ - • RPS-inspired U programs) • NJ, CA, NY transitions • ~ 55 utilities/nonprofits in 20 states U NJ: RECs U $3.50/W $3-5/W DE: 50% 30% U $2-4/W MD: 20% $5/W $2-4.50/W U $1.90-$2.95/W 26-46¢/kWh, 5 yrs. U 18¢/kWh 40% 13¢/kWh $2-4/W U U $4/W $ / W = State Program = Utility Program

6. Direct Incentives for Solar PV, 1997 DSIRE: www.dsireusa.org 10-20% up to $75K 50% up to $10K Varies by project $2K - $10K $10K - $50K $60K - $1M

7. DSIRE: www.dsireusa.org October 2007 Solar PV Tax Credits $500 (R) 15% 35% (C) $3/W (R) 50% (C) MA: 15% (R) 25% (R) 100% Deduct. (R) RI: 25% (R) 25% (R) 10% (C) • Tax credits in 13 states • Range 10% - 50% • FL, IA, NE, OK have small PTCs (PV eligible) • ~10 states proposed new credits in past year varies 35% 25% (R) 30% (Non-Corp.) ~2.7¢/kWh 10 yrs. (C) 10% (NR) 50% (R) 35% (R) Residential; (C) Commercial; (NR) Non-Residential

8. Financial Incentives: Best Practices • Education & outreach program • Generous incentive, declining over time • Stable funding source • Easy application process • Cost-effective quality assurance mechanism • Qualified installers • Partnerships - banks, installers, NGOs

9. Financial Incentives: Best Practices • Utility cooperation (interconnection) • Public sector eligibility • Program flexibility • Track program usage details; share data

10. State Regulations & Policies • Renewable Portfolio Standards/Goals (29) • Public Benefits Fund (16 + DC) • Net Metering (38) • Interconnection Standards (20) • Solar Access Laws (34) • Green Power Purchasing Policies (11) • Fuel Source & Emissions Disclosure (24 + DC) • Contractor Licensing (9) • Equipment Certification (6)

11. DSIRE: www.dsireusa.org October 2007 Renewables PortfolioStandards & Goals MN: 25% by 2025 (Xcel: 30% by 2020) ME: 30% by 2000 10% by 2017 - new RE VT: RE meets load growth by 2012 *WA: 15% by 2020 ND: 10% by 2015 • NH: 23.8% in 2025 WI: requirement varies by utility; 10% by 2015 goal MA: 4% by 2009 + 1% annual increase MT: 15% by 2015 OR: 25% by 2025(large utilities) 5% - 10% by 2025 (smaller utilities) RI: 16% by 2020 CT: 23% by 2020 • *NV: 20% by 2015 IA: 105 MW • NY: 24% by 2013 • CO: 20% by 2020(IOUs) *10% by 2020 (co-ops & large munis) IL: 25% by 2025 • NJ: 22.5% by 2021 CA: 20% by 2010 • PA: 18%¹ by 2020 MO: 11% by 2020 • MD: 9.5% in 2022 • NC: 12.5% by 2021(IOUs) 10% by 2018 (co-ops & munis) • AZ: 15% by 2025 • *DE: 20% by 2019 • DC: 11% by 2022 • NM: 20% by 2020(IOUs) • 10% by 2020 (co-ops) *VA: 12% by 2022 TX: 5,880 MW by 2015 State RPS HI: 20% by 2020 State Goal • Minimum solar or customer-sited RE requirement * Increased credit for solar or customer-sited RE • ¹PA: 8% Tier I / 10% Tier II (includes non-renewables) Solar water heating eligible

12. DSIRE: www.dsireusa.org Renewables PortfolioStandards, 1997 ME: 30% by 2000 MN: 425 MW by 2002 MA: Under Development NV: 1% by 2009 IA: 105 MW by 1999 AZ: 1.1% by 2007 State RPS

13. RPS Issues • Eligible Resources? • Existing vs. New Resources? • Utilities Subject to Requirement? • Percentage of Sales or Capacity? • Duration? • Location of Resources? • Tradable Credits? • Compliance Mechanisms?

14. DSIRE: www.dsireusa.org October 2007 Solar/DG Provisions in RPS Policies (~6,000 MW solar capacity) WA: double credit for DG NH: 0.3% solar-electric by 2014 NY: 0.1542% customer-sited by 2013 NV: 1% solar by 2015; 2.4 to 2.45 multiplier for PV NJ: 2.12% solar-electric by 2021 CO: 0.8% solar-electric by 2020 PA: 0.5% solar PV in 2020 MD: 2% solar-electric in 2022 DE: 2.005% solar PV by 2019 (Triple credit for PV) AZ: 4.5% DG by 2025 DC: 0.386% solar-electric by 2022 NC: 0.2% solar by 2018 NM: 4% solar-electric by 2020 0.6% DG by 2015 Solar thermal counts towards solar set-aside DG: Distributed Generation

15. DSIRE: www.dsireusa.org October 2007 New RPS Policies & Goals (Since fall 2006) WA: 15% by 2020 ND: 10% by 2015 double credit for DG NH: 23.8% in 2025 0.3% solar electric by 2014 33 MW OR: 25% by 2025 (lg. utilities) 5% - 10% by 2025 (sm. utilities) IL: 25% by 2025 VA: 12% by 2022 MO: 11% by 2020 NC: 12.5% by 2021 (IOUs) 10% by 2018 (co-ops & munis) 0.2% solar by 2018 300 MW 300 MW State RPS State Goal

16. DSIRE: www.dsireusa.org October 2007 Increased/Expanded RPS Policies(Since fall 2006) MN: 25% by 2025 (Xcel: 30% by 2020) CT: 23% by 2020 CO: 20% by 2020 (IOUs) 10% by 2020 (co-ops & large munis) MD: 9.5% in 2022 180 MW 0.8% solar electric 2% solar electric 1500 MW DE: 20% by 2019 AZ: 15% by 2025 2% solar PV 175 MW 4.5% DG 1250 MW NM: 20% by 2020 (IOUs) 10% by 2020 (co-ops) 4% solar electric by 2020; 0.6% DG by 2015 500 MW

17. How to Promote Solar via RPS Policies • Increasing support of solar in RPS policies • Favoring set-asides rather than multipliers (MD, NM, DE) • Separate requirements for IOUs and munis/co-ops • Non-electric solar thermal is eligible in 10 states (eligible for set-aside in 3 states) • Potential solar capacity from solar set-asides: ~6,000 MW

18. Interconnection Standards Technical issues include safety, power quality, system impacts. Most technical issues have been resolved. Policy issues include legal and procedural considerations. State approaches vary widely. Best practices adopted by NJ, OR, CO. • Interconnection standards are adopted to govern how • DG systems are connected to the electric grid.

19. Interconnection: Best Practices • Individual system capacity limit ≥ 10 MW • All utilities participate; all customers eligible • Multiple levels of review (3 or 4) • Transparent screens, study reviews, timelines • Minimal application fees; no additional fees, charges • Standard form agreement, application • No additional insurance requirements • IEEE 1547 • Network interconnection permitted • No external disconnect switch • Customer retains RECs

20. Net Metering Net metering allows customers to generate their own electricity and store any excess electricity, usually in the form of a kWh credit, on the grid for later use. Net metering available “statewide” in 38 states. State policies vary dramatically. Best practices adopted by CO, NJ, PA, MD, CA.

21. Net Metering www.dsireusa.org October 2007 100 NH: 100 MA: 60 RI: 1,000/1,650* CT: 2,000* VT: 15/150 100 * * 50 100 * 25/2,000 40 * 10/400 20 * * 25/100 30 * 25 * * * no limit 500 * PA: 50/3,000/5,000* NJ: 2,000* DE: 25/500/2,000 MD: 2,000 DC: 100 VA: 10/500* * 1,000 * * * 40 25 10 * * 25 * 2,000 1,000 100 15 * 20/100 * * varies 80,000 100 25/300 * 10/100 * 50 25/100 50 varies Net metering is available in 42 states + D.C. State-wide net metering for all utility types * State-wide net metering for certain utility types (e.g., investor-owned utilities only) Net metering offered by one or more individual utilities (Numbers indicate individual system size limit in kilowatts. Some states’ limits vary by customer type, as shown)

22. Net Metering: Best Practices • Maximum system capacity ≥ 2 MW • All renewables eligible (+ CHP) • All utilities must participate • All customer classes eligible • Limit on aggregate capacity ≥ 5% • Annual reconciliation of NEG, or no expiration • Interconnection standards • No application fee • No special charges, fees or tariff change • Customer owns RECs

23. Net Metering: Revised Statutes/Rules(Since fall 2006) • Individual capacity raised: AR, CT, DE, MD, • NH, NM, NV, OR, PA, RI • Aggregate capacity raised: CT, DE, MD, NH, • OR, RI, VA • More renewables eligible: DE, OR, NH, OH, VA • NEG treatment clarified/improved: AR, CT, • DE, MD, NH, NV, OH, OR, PA • REC ownership clarified/improved: AR, CA, • DE, MD, NV

24. Solar Access Laws • Solar easements allow for the rights to existing solar access on the part of one property owner to be secured from an owner whose property could be developed in such a way as to restrict that resource.Transferred with property title. • 13 states limit or prohibit restrictions that neighborhood covenants and/or local ordinances can impose on the use of solar equipment.

25. The DSIRE Project Database of State Incentives for Renewables & Efficiency www.dsireusa.org

26. Rusty Haynes rusty_haynes@ncsu.edu 919.513.0445 www.dsireusa.org dsireinfo@ncsu.edu

27. Solar Capacity Resulting from RPS Solar Policies 2005 Outlook~ 1,000 MW 2006 Outlook ~ 2,700 MW 2007 Outlook ~ 6,000 MW Largest markets: • NJ (1500 MW) • MD (1500 MW) • AZ (1000-1500 MW) • PA (850 MW)