Politics and Solar Energy in America:
Getting Beyond the Economics of Solar Deployment
Author: Pete Polonsky
Advisors: Dr. Billy Pizer, Dr. Alison Hagy
Undergraduate Honors Thesis submitted to the Sanford School of Public Policy
Duke University
Durham, North Carolina
December 2019
Acknowledgments
I want to thank both my advisors for guiding me along this journey of researching and writing a thesis. From critiquing my ideas and thought process to challenging me to think more critically about my own conclusions—as well as helping me change my research question nearly every month—Dr. Billy Pizer and Dr. Alison Hagy were crucial in assisting me with this project. Without them, I would have had a lot fewer questions answered and a lot more challenges unsolved, so I am grateful for all the help they provided.
2 Table of Contents Acknowledgments Abstract Research Question I. Introduction a. Hypothesis II. Literature Review a. The economics of solar b. Federal energy tax credits c. Electricity market regulation d. Efficacy of state solar energy policies e. Federal inaction f. The case study approach III. Methodology a. Determining the case set of states b. Data collection c. Data analysis IV. Results a. Arizona b. Hawaii c. Nevada d. Massachusetts e. New Jersey f. North Carolina V. Discussion VI. Conclusion a. Trend A: majority Democratic leadership b. Trend B: packaging policies and building coalitions c. Trend C: primary policy mechanisms d. Trend D: relationship between legislature and public utilities commission e. Trend E: solar energy rhetoric VII. Appendix a. List of Acronyms and Abbreviations b. State Solar Data VIII. References
3
Abstract Solar energy is the fastest-growing source of energy in America by deployment. For states, the benefits of solar energy include reaching ambitious renewable energy goals, lowering the costs of electricity generation, reducing electricity sector pollution, and increasing resiliency through distributed generation resources. The growth of solar energy has not occurred universally across states, and many states with substantial potential for solar energy currently have little solar energy deployed while others with less potential have deployed a lot. While the levels of solar irradiance and the economics of solar within a state influence the deployment of solar, state-level solar energy policies have also played an important role in transforming the potential of solar energy resources within a state into solar energy generation. To examine state-level policies, I researched the solar story in six states (Arizona, Hawaii, Massachusetts, Nevada, New Jersey, and North Carolina) with high levels of solar deployment, identifying significant policies and analyzing the political circumstances associated with these policies. While researching two or more significant policies and associated political circumstances in each state, five trends emerged regarding state solar energy policy. (A) Nearly all policies examined were sponsored by Democrats, with most sponsors having leadership positions. (B) Policies associated with longer-term stability in the solar market were packaged with several related electricity sector measures to draw support from a wider coalition of stakeholders. (C) The primary policy mechanisms in the examined policies include net metering rules, renewable portfolio standards, and investment tax credits. (D) The demonstrated competence and political alignment of a state’s Public Utilities Commission (PUC) seems to play a role in how much responsibility a state legislature delegates to the PUC in solar legislation. (E) Solar energy policy framing often focuses not just on the environment but on energy independence, national leadership, and economic security. States hoping to encourage the growth of solar energy should utilize the analysis from Trends C, D, and E regarding what policies and framing to use and the analysis from Trends A and B regarding what political circumstances allow solar policies to succeed.
Research Questions Among states with significant solar deployment, what policies appear to be responsible for deployment and in what context? What political circumstances are associated with enacting these policies?
4 I. Introduction The threat of climate change calls for the use of clean energy, and federal inaction on clean energy incentives necessitates state action on clean energy, including solar energy. Solar energy is a strong indicator of the transition to renewable energy in the United States, as 29% of additions to our capacity for electric generation in 2018 was solar, and over 69,000 megawatts (MW) of solar energy capacity has been installed throughout the country (Perea). While solar generation accounted for 2.21% of total electric generation in the US in 2018,1 solar power generation is growing at the highest rate per year of all fuel sources (Weaver). States are not contributing equally to this capacity, however. There is no strong correlation between solar energy potential2 or any similar state-level energy metrics and solar deployment per state, as some states with higher potential have lower deployment and some states with lower potential have higher deployment. The states with the highest installed capacity include California and North Carolina, but a surface-level examination does not reveal an obvious reason for why the top states for solar have the most solar capacity. If solar energy potential and the economics of solar do not explain deployment, then the role of state-level policies must be considered. This research focuses on state-level policies because there is no literature that identifies policy and political trends in the adoption of state solar energy policy, and many states with significant solar potential need to implement policies that stimulate solar energy deployment. Solar electricity generation is predicted to grow at around 10% annually through at least 2035 (Conti), but how states can leverage their political climates to create policy encouraging this growth is not well-documented. Identifying common political trends for how states with high solar capacity adopted and implemented solar energy policy can provide valuable lessons for states which hope to encourage growth in their solar energy sectors. My research identifies states with significant solar deployment and policies which appear to have impacted solar deployment. My research then examines what political circumstances are associated with enacting these policies to draw conclusions. Solar energy policies are significant if the passage of the policy is associated with growth in the state’s solar energy capacity, either through expert analysis or deployment data. For researching the development and passage, I focus on political and policy features. Political features include the partisan makeup of the legislative body and executive office, the influence of outside interests, and broader economic and technological aspects of solar energy. Policy features include the policy tool utilized, the stakeholder process, and the independence or packaging of the policy. This research identifies trends in the development of state solar energy policies and informs state governments about key political and policy features behind a case of solar energy policies in states with high solar deployment. Policy-makers, non-governmental organizations, and others interested in pushing their state to pursue a stronger solar energy agenda can learn how six states have done so through this analysis. The aim of this research was not to provide a detailed description of every solar energy policy or its political and policy features, but to draw conclusions through a political lens and identify trends in the politics and policies of solar energy in six states. While the sharply declining economics of solar—solar production costs decreased by over 80% from 2009 to 2017 (Berke)—play a role in the deployment of solar energy in every state in the case set, this research suggests that state policies also play a significant role in encouraging solar deployment. Five policy and political trends emerged within the six states in the case set: Arizona, Hawaii, Massachusetts, Nevada, New Jersey, and North Carolina. Nearly all policies examined were sponsored by Democrats in leadership positions, though Republicans did not universally oppose solar legislation. Most solar policies were packaged with related electricity sector measures to draw support from a wider coalition of stakeholders, which was associated with longer-term political and financial stability in the solar market. Net metering rules, Renewable Portfolio Standards (RPS), and state investment tax credits were the
1 Calculated using data from the Energy Information Administration (EIA), which is provided in Appendix B. 2 Solar energy potential here is measured through solar irradiance and technical potential, which the literature review describes in more detail.
5 primary policy mechanisms in the case set used to encourage solar deployment. The demonstrated competence and political alignment of a state’s Public Utilities Commission (PUC) seemed to play a role in how much responsibility a state legislature delegated to the PUC in solar legislation. Finally, the rhetoric and framing used to promote solar energy policy focused not just on environmental benefits but on energy independence, national leadership, and economic security.
Hypotheses Prior to conducting in-depth research, it seemed that each state’s story for solar deployment would be unique, but that there would be trends across states correlated with the deployment of solar energy technology. These trends would include similarities in the policy mechanisms used to encourage solar deployment and the political circumstances associated with solar deployment. I expected there to be different trends in the policy mechanisms used between states with higher solar potential, such as the southwestern US states with very high solar irradiation, and states with lower solar potential because power generation tends to increase with solar irradiance (Nasrin et al.). For example, a state in the southwest should only need one significant financial incentive to spur the growth of solar, whereas a state in the northeast may require a larger portfolio of solar incentives to spur growth. Another hypothesis was that most legislation relevant to solar policy would have been sponsored and pushed by Democrats, though a bipartisan effort involving Republicans would be necessary in many states for the successful passage and implementation of this legislation. Primary examples at the federal level of this in environmental policy are the Clean Air Act and Clean Water Act, both passed and amended through bipartisan efforts while under Republican presidential leadership and Democratic congressional leadership. If solar energy policy adoption coincides with a bipartisan effort, then this implies solar energy policy should be framed in a manner to attract bipartisan support. For example, solar energy framing could focus on the economic benefits of solar energy deployment and the increased grid reliability with more distributed generation of energy. Additionally, partisan policies developed without the input of other parties may be vulnerable to being gutted by another party after a transition of power. Regarding the non-political circumstances in which solar policies were enacted, I expected the economics of solar, the environmental implications of solar, the social advocates of solar, or some combination of these factors to influence the passage of solar policies. Economic situations include the cost of solar energy installation, the cost of electricity (both retail and wholesale rates), and the activity of the solar energy industry in the state. The environmental and social circumstances focus on the political will regarding the promotion of solar energy and the public support of solar energy. This hypothesis implies that various states may be able to frame solar energy policy through a state-specific lens in order to generate support for its adoption and implementation. A state may have any combination of positive economic incentives, considerable solar potential, or strong political and public will that it may utilize.
II. Literature Review
The economics of solar One of the primary drivers in the recent growth of solar deployment has been the declining costs of solar installations, which has allowed many states to begin to realize the technical potential of solar energy generation in the United States due to the country’s relatively high levels of energy generation. The National Renewable Energy Laboratory (NREL) produced a report on renewable energy technical potentials in the US, estimating how much solar energy generation each state in the US could build out on a number of factors (Lopez et al.).3 For all solar technologies in the report, comparing the technical
3 The technical potentials for each technology, including solar, are “based on renewable resource availability and quality, technical system performance, topographic limitations, environmental, and land-use constraints only.”
6 potential of states identified in my research’s case set to the current deployment of those states shows that technical potential is not the sole driver of deployment, as the six states in the case set have an average ranking of 30th for technical potential.4 Solar irradiance measures the amount of direct sunlight absorbed by a square unit of Earth’s surface. To find the potential of a given region for solar energy generation, solar irradiance is typically measured over a square meter in kilowatt-hours per day, which determines how much energy could be produced by solar photovoltaic (PV) panels. In two separate studies, higher solar irradiation was found to increase the electrical power of solar PV systems and make it effective for large power plants to meet energy demand with solar (Nasrin et al.), and the amount of power generated was found to increase as solar irradiance hitting the surface of solar panels increased (Naamandadin et al.). In areas where solar panels produce more power, the return on investment for solar panels occurs in a shorter time as the higher levels of electricity produced by the solar PV systems are associated with higher profits—as long as the electricity produced can be sold, either by utilities to customers or vice versa. So, the economics of solar are stronger in regions with higher solar irradiation. Additionally, several aspects of solar energy work well with our electricity system to decrease the costs of solar generation when compared to other energy sources. The fuel for solar power is free, operating costs are low, generation aligns well with peak demand in warm climates, and solar capacity displaces fossil fuel generation that harms the environment (Baker et al.). Installing solar capacity and generating solar power has become increasingly economically viable over the past decade, so much so that the cost of producing solar power is often cheaper than the cost of producing electricity with coal in the absence of subsidies (Berke). Analyzing production costs through the levelized cost of electricity (LCOE), which measures the total production costs of building and operating an electricity-generating plant, the costs of producing solar have dropped 81% since 2009 internationally (“UNEP Report”) and over 86% since 2009 in the US (Berke). Building new utility-scale solar plants to generate electricity is now cost-competitive with existing coal and nuclear plants (“Levelized Cost of Energy 2019”), implying that in the absence of subsidies it is more profitable in many cases to invest in new utility-scale solar plants than to continue operation of existing coal and nuclear plants. These sharply declining costs have translated into solar deployment, as today’s global solar capacity is over 26 times that of 2009, and more gigawatts of solar power capacity has been installed than any other generation technology throughout this decade (“UNEP Report”).
Federal energy tax credits Since the Energy Policy Act of 2005, a federal energy investment tax credit (ITC) applicable to solar installations has allowed individuals and entities installing residential or commercial solar systems to claim a tax credit of 30% of the value of their investment. The ITC has been extended several times before it was set to expire, most recently extended in December 2015 through the end of 2021. Barring further extensions, the ITC is set to gradually step down to 26% in 2020 and 21% in 2021, before phasing out for residential installations and dropping to a permanent 10% credit for commercial installations (Matasci). Those in the solar industry have argued that the ITC has been crucial for the solar energy boom America experienced in the 2010s, providing long-term stable policies to encourage large investments in the solar industry, including the creation of nearly 250,000 new jobs and a 10,000% increase in solar capacity. Opponents to an extension of the ITC argue that the subsidy is not the most effective way to reduce greenhouse gas emissions and fight climate change, which is a primary reason for renewable energy investment (Oberhaus). While the extension of the ITC or development of alternative federal policies to incentivize solar energy (e.g. production tax credits or carbon taxes) is uncertain, states can certainly step
4 The rankings for each state in the case set are as follows: Arizona in 5th, Hawaii in 48th, Massachusetts in 44th, Nevada in 11th, New Jersey in 42nd, and North Carolina in 31st.
7 into the gap created by the lack of a federal ITC beginning in 2022, especially because residential solar is not cost-competitive with utility-scale conventional energy sources without subsidies.
Electricity market regulation The regulation of electricity markets is generally a state power, and most states have had regulated markets for the past century in which public utilities have exclusive jurisdiction to provide electricity to customers in a state or region of a state.5 In states with deregulated markets, utilities do not have exclusive jurisdiction over electricity delivery, which opens up the electricity market to competition with other generators. Another key difference between regulated and deregulated markets is that utilities cannot own generation assets, such as a power plant, in a deregulated market, but are allowed to own transmission infrastructure. At least 17 states and DC currently have deregulated electricity markets, with the majority of these states located in the northeast (AEE PowerSuite). Utilities in all markets are required to allow electricity generators to access and connect to the electric grid, but utilities in regulated markets are not required in every state to purchase energy generated by these third party generators (Energy Deregulation). The regulation of the electricity sector in both types of markets is carried out by state Public Utilities Commissions (PUCs). PUCs, which are elected or governor-appointed commissions depending on the state, regulate all aspects of the electricity market, including energy standards (e.g. RPS and energy efficiency standards), net metering rules, third party sales of electricity, and electricity rates. An RPS is a regulatory mandate for electricity-providing entities in a state to account for a certain percentage of their sales of electricity with renewable sources by a certain date.6 Many states’ RPS include carve-outs for specific renewable sources, such as solar or wind. At least 37 states and DC have a mandatory or voluntary RPS, and the states without an RPS are primarily located in the southeast (AEE PowerSuite). Net metering rules determine whether residential and commercial electricity customers generating their own electricity, typically through solar power, can export and sell excess electricity generated back to the grid operated by a utility (“Net Metering”). Net metering rules are very complicated, and the price at which utilities purchase excess electricity often changes with legislative and regulatory decisions. Third party sales of electricity allow non-utility entities to directly sell electricity to customers within utility jurisdiction, whether through a grid connection or solar PV installations. Third party sales involving solar PV agreements are allowed in at least 25 states and DC (“DSIRE”).
Efficacy of state solar energy policies Research has largely addressed the comparative effectiveness of specific policies utilized to influence the solar energy industry. This research has helped identify which types of policies to examine in my case set by providing a basis for determining the significance of various policies. The effect of RPS on renewable energy capacity in particular has been well-studied because RPS is the most common renewable energy policy mechanism in America. Twenty-nine states have mandatory RPS policies, and eight states have voluntary renewable energy standards or targets which are similar (“State Renewable Portfolio Standards and Goals”). The consensus regarding the cost-effectiveness of RPS policies is mixed. One study argues that RPS is the most cost-effective approach for promoting renewables through investment and deployment, though RPS is less cost-effective at reducing carbon emissions than policies specifically designed to so, such as carbon taxes or caps (Palmer and Burtraw). Another study agrees that RPS implementation does encourage investment and deployment, but notes that this does not result in an energy transition. This study found that RPS policies, which are the strongest mechanisms the US has
5 Utilities were initially given this jurisdiction in the early 20th century because private competition did not economically incentivize building rural infrastructure to provide electricity, but eliminating competition and mandating infrastructure buildout worked. Though infrastructure is relatively universal today, most states continue to have regulated markets with utility monopoly jurisdiction. 6 For example, North Carolina’s RPS requires that utilities provide 12.5% of electricity sales through renewable sources by 2021.
8 adopted, do not significantly increase the share of renewables in electricity generation in a state despite being associated with increased deployment (Carley). Finally, a different study argues that a market- oriented policy, such as a mandatory green power option that requires utilities to provide the option for green electricity, is more cost-effective at generating investments in renewable capacity than RPS policies (Delmas and Montes-Sancho). With the conclusions of these studies varying, examining the underlying variable of the political climate of solar energy policies should provide further insight into why RPS policies have different results. Beyond RPS policies, the effectiveness of other policy mechanisms for solar energy has been studied. A review of global energy policy concluded that the most beneficial and common energy policies for solar energy in terms of encouraging development and deployment of renewable energy and technology are RPS, net metering, and other industrial economic incentives (Solangi et al.). Including solar policies within larger bills provides the opportunity to pass low-profile renewable policies, and enactment of these policies is generally followed by incremental extensions of the policy (Stokes and Breetz). Activists have also made arguments for a range of other policy mechanisms to encourage the growth of solar, such as a tax-exempt status for solar resources and the decentralization of energy markets (Scheer). With all of these analyses and proposed ideal policies in mind, several RPS policies and a mix of net metering and other incentive-based policies are included in the case set. It is also important to note the correlation between policy mechanism and long-term stability in the solar market, as policies that reduce uncertainty in long-term solar PV investments seem to be most effective at incentivizing residential solar deployment (Bauner and Crago). Considering the objective of policy implementation is important in choosing which policies to utilize. If the objective is solar energy deployment, measured by the percentage of net electric generation, then a decision-maker should examine which policy mechanisms have been associated with increasing the amount of solar energy generation as a percentage of net generation.
Federal inaction on solar energy policy State policy development has proven to be rather important for solar energy because of the “federal leadership vacuum” (Byrne et al.), which is the perceived federal inaction at addressing the challenge of global climate change through energy policy. Beyond the 30% federal tax credit, which is set to expire at the end of 2019, there has been little federal action to incentivize solar deployment. Thus, state and local policies have played and will play a significant role in driving growth in solar power generation. There are a few reasons for this federal inaction on solar energy policy. The cost of renewable energy compared to traditional energy sources has been high (Brand), and technical innovation has not occurred because of a lack of certainty in the longevity of policy instruments under the federal vacuum (Nemet). Fossil fuel interests have restricted action on both the federal and state levels due to the structural power of capital to influence politics (Newell and Paterson), in which wealthy industries lobby more effectively against policy that could alter the financial success of their industries than advocacy groups based on an environmental position with no direct financial interest from which to draw money for lobbying efforts. Perceived impacts on human health and economic development, despite lacking a scientific basis, have also hampered adoption and implementation of solar energy policy (Solangi et al.). Because of these factors, state governments have the opportunity to develop and implement solar energy policies designed specifically for their state. Most Americans support solar deployment, so state governments may respond to federal inaction by looking at how people in their state feel about solar deployment. In a national poll, 76% of respondents want to see more solar deployment and a majority believe their utilities should be required to get at least 50% of their electricity from renewable sources by 2030, especially among younger age groups (Baumann). Since very few states have an RPS with a goal of 50% or higher by 2030, this target would require the development of state policy. Additionally, solar energy development is likely to be centered
9 in the southwestern states (Carlisle et al.), so federal inaction allows states to develop policies to best fit their economic circumstances and regulatory environment.
The case study approach for solar energy policy Using case studies is fairly typical in the study of renewable energy policies, considering that policies can be identified relatively easily and compared to other energy industries through various criteria. However, most other case studies regarding solar energy have approached choosing specific cases to study with different criteria in mind, primarily using economic and technical innovation lenses to evaluate renewable energy policy (Stokes). One case study examining Ontario’s feed-in tariff (FiT) policies between 1997 and 2012 analyzed the political process to reveal key political tensions (Stokes), finding that a lack of sustained political and public support was the primary reason the policy ended. The difference between the scope of this case study and my case study is that this case study focused on one policy for a specific time period and its end-result, not choosing case studies that provided a significant boon to the solar energy industry. Ontario’s FiT case study also highlights that political tensions are at the core of the sustainability of renewable energy policies. Studies of renewable energy policy which are not doing a holistic review use the case study approach because of the relatively low amount of cases of prominent policies. Most case studies use a policy or impact perspective, however. As the renewable energy industry is experiencing increasing politicization due to technology threatening the incumbent fossil fuel industry in the power sector (Stokes and Breetz), renewable energy policy case studies should also focus on the political climate of policies. A job creation model for the US power sector suggested that over four million jobs could be created by the renewable energy industry by 2030 with a 30% RPS target (Wei et al.), though this prediction comes with a significant amount of uncertainty because of the assumptions a job creation model uses. While this finding is subject to assumptions in the model, a political campaign for solar energy policy emphasizing job creation could be effective, so it will be helpful to study the rhetoric surrounding solar energy policies. The literature suggests that we know more about what the good policies are than we know about how to get those good policies enacted. Because the renewable energy industry is experiencing the polarizing forces of politics as it threatens current energy industry’s infrastructure (Stokes and Breetz), examining how effective solar energy policies have been adopted and implemented will provide insight for future policy. My research intends to draw on some of the significant solar energy policies passed at the state and local levels by focusing on the surrounding political environment. Many of the studies referenced note the need for further research into the political climates of solar energy policies in order to better understand their outcomes and significance. One article argues that we need to recognize and research “the natural, social, and policy context under which” energy policies are adopted to measure effectiveness properly (Delmas and Montes-Sancho). My research will focus on the observable patterns and trends that are associated with their passage rather than on the efficacy of policies.
III. Methodology The primary goal of this research is to determine what political circumstances are associated with enacting state solar energy policies that appear to be associated with significant solar deployment. I analyze political circumstances within individual states and political trends across a diverse set of states. In order to research these issues, I first identify which states have significant solar deployment and the context in that state that has enabled solar deployment, including individual policies. While causality is not established between these state policies and growth in solar deployment, this research focuses on policies that appear to have affected deployment. In addition to my findings, analysis from energy sector experts aids in identifying relevant policies. I then proceed to examine the political circumstances associated with development and enactment of those policies. In summary, this three-step process describes my attempt to answer the research questions: (1) determine which states have significant solar
10 deployment, and choose a case set; (2) decipher the solar narrative in each state within the case set, and identify relevant policies per state; (3) compile and analyze in-depth research on each state’s policies and associated political circumstances to identify trends.
Determining the case set of six states7 I use several criteria in deciding which states to research in my case set. The amount of solar deployment in a state relative to the state’s total electric generation is an important statistic, and Figure 1 on the following page depicts solar generation as a percentage of net electric generation in each state in 2018.8 While states in the American southwest consistently have a high relative percentage of solar generation, a few states in other regions—namely Hawaii, Massachusetts, New Jersey, North Carolina, and Vermont—also have high percentages of solar generation relative to their regions. Related to net generation, installed solar capacity is also a relevant statistic. California has the highest installed solar capacity by far with over 25,000 MW installed as of the second quarter of 2019. Comparing actual solar deployment to the potential of solar deployment9 in states helps determine which states with high potential have been successful at solar deployment, as expected, and which states with lower potential have been more successful at solar deployment than states which have higher potential. For these successful states with lower potential in particular, state policies play a significant role in the deployment of solar. Figure 2 on the following page shows levels of solar irradiance across the US, which is much higher in the southwestern states, including California, Arizona, New Mexico, Nevada, Utah, and to a lesser extent Colorado, Texas, and Hawaii. If solar deployment were solely correlated with solar irradiance, southwestern states would be expected to top the list of states by a number of metrics, including solar generation as a percentage of net generation. However, a comparison of these two maps shows that eastern states, primarily North Carolina, New Jersey, Massachusetts, and Florida, have much higher solar deployment than some states with a much higher concentration of solar resources, including New Mexico, Utah, and Colorado. There is more to the story of solar deployment than solar resources, namely state policies. In total, I considered 15 states before choosing the following set of six states for my case study: Arizona, Hawaii, Massachusetts, Nevada, New Jersey, and North Carolina. These six states are separated into two groups based on relative amounts of solar irradiance. Group A (Arizona, Hawaii, and Nevada) is the higher solar irradiance group, and Group B (Massachusetts, New Jersey, and North Carolina) is the lower solar irradiance group. The goal of separating these states into two groups is to identify any trends existing in one or both groups that relate to the amount of solar irradiance in a state. Each of the other nine states in the initial case set I excluded using a set of criteria in addition to percentage of solar generation and solar irradiance.10 While California has the most installed capacity—by a factor of about five over the next highest state, North Carolina—there are too many policies to draw relevant conclusions
7 The sources I used for determining my case set include the SEIA’s state-by-state map, the National Conference of State Legislatures database for state legislative bills since 2007, the Energy Information Administration’s Electric Power Annual Data for calculating state net generation percentages, and the Database of State Incentives for Renewable Energy for analysis of specific state policies. Specific data sets are included in the appendix. 8 This map was calculated using data from the US Energy Information Administration’s (EIA) Electric Power Monthly. Data for each state’s solar generation as a percentage of net generation is available in Appendix B. 9 The potential for solar deployment can be measured in several ways. Generally, the more direct solar irradiance a state gets, which essentially measures how much direct sunlight an area on the Earth’s surface receives, the lower the cost of solar generation is. Other technical factors factor into the potential for solar deployment, including the cost of electricity and the availability of other energy resources. The literature review describes the relationship between solar irradiance and solar generation potential. 10 These other criteria include installed solar capacity, solar installation trends since 2010, access to relevant political information for analysis, geographic diversity, and regulation of the state’s electricity market.
11 Figure 1. Solar generation as a percentage of net generation in 2018. Map created using data from the US Energy Information Administration and visualization through QGIS software.
Figure 2. Direct normal solar irradiance across states, measured using annual average daily total solar resources from 1998-2016. Map sourced from National Renewable Energy Laboratory’s geospatial data science solar maps (https://www.nrel.gov/gis/assets/pdfs/solar_dni_2018_01.pdf). because California has been incredibly encouraging for solar deployment. It is an outlier. The states in the 12 case set have a few core policies that are associated with solar deployment. Other states which rank in the top 15 for solar deployment—Colorado, Florida, Georgia, Minnesota, New Mexico, New York, and Texas—have a smaller percentage of solar generation as net electric generation than the states in the case set.11 Conclusions for states with significant solar deployment could be used as starting points for creating policy that incentivizes solar deployment in these and other states.
Data collection In the literature review, I identify that the federal investment tax credit and the trend of declining costs for solar installation both play a significant role in solar deployment in every state. The first step in data collection in my research involves deciphering what the narrative is in each state that has led to significant solar deployment. I use an introductory, surface-level examination of policies and the political environment surrounding solar energy during the past 15 to 20 years, as this has been the most significant time period for solar deployment. I employ targeted searches in both news outlets such as PV Magazine and Utility Dive and academic outlets to find analysis from energy market and energy policy specialists. Other beneficial outlets for analysis include the Solar Energy Industries Association’s (SEIA) state-by-state analysis and public comments from solar companies. The data generated by this research include key ideas on why a state has significant solar deployment, a handful of primary policies to explore, state solar energy data, and analysis from major sources with several secondary sources. Research into the political circumstances associated with state policies is qualitative, describing the policy features12 of each legislative item and the political conditions13 that coincided with the development, adoption, and implementation of each legislative item. I analyze each state and its policies through a political lens, aiming to determine for example whether a pattern emerges for the case study set, whether specific political events affect the development of solar energy policy, or whether the range of stakeholders involved in the development of solar energy policy varies. As qualitative research, this research involves adapting my approach to each unique state. As brief examples, some states have more accessible histories of policy development, and energy policy is more heavily documented by the media in some states. For example, in Nevada armed protestors showed up to a Public Utilities Commission of Nevada hearing on examining residential net metering rates, which reflects the rhetoric and aggression used by solar advocates and others in this case.
Data analysis The goal of this data analysis is to discover and document political themes at three levels: (1) within individual states, (2) within each group of states, and (3) within the entire case set of states with high solar deployment. By narrowing down the set of state solar energy policies to those that seem to be associated with spurring solar deployment, and by using a narrower set of policies, it will be easier to dive deeply into research for the political circumstances for each policy. For every trend documented, I highlight its core implications for the case set of states and beyond, as well as its limitations. The outcome of this research informs state governments—in addition to outside stakeholders—who wish to pursue a stronger solar energy agenda of the political climate and policy features associated with the passage of state solar energy policies. Policy-makers can adopt policy features that appeared across multiple cases and appear to be effective. Outside interests, including nonprofits and thinktanks, can utilize the research to provide recommendations to legislators on solar energy policies.
11 All states’ solar generation percentages are listed in Appendix B. 12 The policy features include the policy mechanisms utilized (e.g. RPS or net metering), the initiators of policy, the entity given authority by the policy (e.g. the Public Utilities Commission), and whether the policy was independent or packaged. 13 The political conditions include sponsorship and opposition of a bill, the partisan makeup of the state’s executive and legislative bodies, the state utilities’ priorities, the bill’s stakeholder involvement, and the rhetoric used in support and opposition of the bill.
13 Figure 3. Annual solar installations in Arizona, 2010 through Q2 2019. Data sourced from Solar Energy Industries Association’s database of state-by-state solar information (https://www.seia.org/state-solar-policy/north-carolina- solar). Utility installations refer to utility-scale installations, not necessarily installations owned by utilities.
IV. Results
Arizona The solar story Arizona ranks high in the country in current deployment and potential deployment of solar energy. The primary reason Arizona has significant solar deployment is that it is one of the sunniest states in the country. Arizona has high average solar irradiance and was ranked fifth in the country in technical potential for solar generation by the 2012 NREL report described in the literature review (Lopez et al.). Arizona is third in total installed solar capacity with over 3,800 MW installed, fifth in installed solar capacity per-capita, and seventh in net solar generation as a percentage of net energy generation. In 2018, solar energy sources provided 5.89% of Arizona’s net energy generation.14 Figure 3 shows that annual installations of residential and non-residential solar PV consistently grew while favorable net metering rules existed between 2009 and 2016, though annual residential installations have recently declined in the midst of changes to the net metering rules. Utility PV installations vary more on a year-to-year basis in Arizona because the number of installations is smaller compared to residential installations, but the capacity per installation is much larger. For example in 2013 and 2016, one projected accounted for around half of the additions to installed capacity in each year, with the 250 MW Solana Generating Station beginning operations in 2013 and the 320.8 MW Mesquite Solar station beginning operations in 2016 (“Major Solar Projects List”). The combination of state solar energy tax incentives and net metering, both instituted as the cost to install solar panels began to decrease sharply at the beginning of the decade, helped unleash a boom of solar deployment in Arizona in the first half of the 2010s. Solar Energy Tax Incentives (2006): House Bill 2429 HB 2429 modified the existing solar energy tax incentives to make the financial incentives for installing solar more accessible and recoverable for residential, commercial, and industrial projects. The law established a solar energy income tax credit program for commercial and industrial projects, which included a tax credit of 10% of the installation costs (or $50,000 per company per year) capped statewide
14 State solar statistics were calculated using data from the EIA’s Electric Power Monthly database February 2019 edition, the SEIA’s “Solar State-by-State” database with data current through the third quarter of 2019, and the World Population Review’s US state population estimates. All data and calculations can be found in Appendix B.
14 at $1 million per year. After the cap is reached in an individual year, new solar energy devices would not be eligible for the credit, providing a first-come first-served incentive (Proudlove). The legislature tasked the Department of Commerce with rulemaking for these provisions. The law also removed a $5,000 limit on tax exemptions for solar contracting, which includes residential installations, and eliminated a property value exclusion attached to solar energy devices for on-site consumption (“HB2429”). The bill was sponsored by five Republicans and four Democrats, and the bill passed through both chambers with a coalition of nearly all the Democrats and over half of the Republicans in the legislature voting for the bill. Only Republicans voted against the bill on the House and Senate floors. Governor Janet Napolitano (D) signed the bill in June, five months after it was introduced. During the 2006 legislative session, both chambers of the legislature were led by Republican majorities, so this solar energy bill passed in a divided government. In addition to the bipartisan support for HB 2429, representatives from across several stakeholder groups supported the bill. A coalition of environmental advocates including the Sierra Club and the Arizona League of Conservation Voters, solar industry advocates including the Arizona SEIA, utilities including TEP, and ratepayer advocates including the Southwest Energy Efficiency Project all supported the bill (“HB 2429 Bill Status”). Utilities at the time were reckoning with the fact that renewables would have to play a role in meeting rising electrical demand and recent state renewable standards. Representatives from the utilities noted that the priorities of utilities were to protect the environment while providing sufficient power at an affordable price to customers. Though these representatives argued that solar technology was still expensive and inefficient in 2006—and Arizona Corporation Commission (ACC) Commissioner Mike Gleason believed that there would not be “a day when solar will be cost-effective” (Shaffer)—they believed that these state tax incentives, coupled with federal tax incentives, played an important role in solar technology becoming cost-competitive. An American Solar Electric representative pointed out that these state tax credits reduced the end-price of a typical solar installation down to less than half the initial cost, thus a system could pay for itself in a decade or less (Clancy). Net Metering and the Value of Solar decision (2015) Net metering rules are formulated by the ACC, which is a five-member body elected separately from the Arizona legislature. The ACC regulates Arizona’s primary utilities: Arizona Public Service Co (APS), Salt River Project (SRP), and Tucson Electric Power Co (TEP). APS and TEP are private utilities which own generation and transmission, while SRP is a state-owned utility. The ACC imposes net metering rules, ensures utilities’ compliance with the state’s RPS15 and EES, and monitors third party solar power purchase agreements16) (AEE PowerSuite). The ACC has had a majority of Republican commissioners during every session in the 21st century. Decisions by the ACC over the past decade have both advanced and impeded net metering in the solar industry, and these trends are reflected in the politics of the ACC. In the 2014 election, two Republican candidates won election on platforms that were highly critical of the solar leasing industry and its campaign attacks on utilities (Randazzo, “Arizona Regulators Seek Solar Net- Metering Compromise”). However, other candidates, including current commissioner Sandra Kennedy, who is a Democrat, have run and won on platforms promoting solar energy, particularly rooftop solar, in Arizona (Kennedy). Political campaigns have played a significant role in the ACC’s decisions on solar and net metering. Net metering rules have been tumultuous in Arizona but have driven consistent growth in residential PV installations over the past decade. The ACC decided in 2009 that utilities would be required to purchase excess energy generated by customers at retail rates. This situation, along with tax credits for installations, is a best-case scenario for customers with solar panels, as it opens the opportunity to profit
15 Arizona’s current RPS requires 15% of generation by 2025 to be sourced from renewables, with 30% of that requirement originating from distributed generation, and half of the distributed generation being residential. 16 Third party solar power purchase agreements are limited to schools, governments, and non-profits in Arizona.
15 on excess energy generated. A major decision by the ACC in its Value of Solar docket discontinued this practice of net metering for Arizona customer-generators, replacing it with net billing. In the new framework, customers with solar panels connected to the grid are charged a monthly fee and compensated for excess energy generation at the wholesale rate of electricity, which is significantly lower than the retail rate (Woofenden). There was also an attempt to circumnavigate the ACC’s role in net metering through a ballot initiative in 2016 to require utilities to pay retail rates for net-metered energy (Randazzo, “Arizona Solar Ballot Initiative Launched by Super PAC”). In 2018, the ACC rejected a request by two utilities to establish larger monthly fixed charges for new solar customers (Misbrener). Solar companies and utilities have typically been the major stakeholders on each side of the net metering back-and-forth within Arizona. Utilities have sought to end, or at least sharply curtail, the practice of net metering in Arizona, arguing that customer-generators of solar power are being subsidized by other customers and not paying for important grid costs (Andorka). Utility companies were the primary initiators in the Value of Solar case decided by the ACC. Solar companies advocate for net metering because the policy provides long-term incentives for solar installations, driving demand for their business. Advocates also argue that solar energy is worth far more than utilities claim because of decreased costs in energy generation for utilities and decreased pollution (Pyper). Solar advocates Vote Solar and the Alliance of Solar Choice have also claimed that ACC decisions have been made without their input, with the ACC cutting a deal with private utilities (Andorka). Immediate conclusions In a state with one of the highest potentials to harness solar energy, a policy may be more likely to successfully create long-lasting incentives when a broad coalition that includes both solar installers and state utilities supports the policy. This linkage may be especially important in a state typically dominated by one political party. In a few cases in Arizona, Republicans did support solar legislatively, but the only elected officials who voted against HB 2429 and for the change from net metering to net billing were Republicans. Solar advocates and utilities found themselves on opposite sides of a proposed change to net metering policy, though both wanted to create long-term stability in the solar market that was best for ratepayers and the environment. A viable middle ground policy with the context of declining costs of solar would be a policy that updates on a yearly basis with long-term horizons, as the ACC’s net billing rates were scheduled to do.17 Finding compromise to move the solar market forward steadily, rather than uncertainly as in the case of the Value of Solar decision, could have propelled the Arizona solar industry to higher deployment.
Hawaii The solar story Hawaii’s solar story is unique to American states because it is largely dominated by economics and high solar irradiance, with solar policies that have unlocked the potential of residential and commercial solar energy installations. Hawaii has been so successful at deploying solar, especially residential PV, during the past decade that the state has had to slow down solar deployment due to concerns of the reliability of solar generation in the absence of significant energy storage (Fares). On some summer days in 2018, Hawaii generated nearly 60% of its power from renewable energy, predominantly from solar energy resources (Fialka). Hawaii is second in installed solar capacity per capita, fourth in solar generation as a percentage of net generation at 11.67% in 2018, and 15th in installed solar capacity with just under 1,000 MW installed. One of the reasons for high solar deployment in the state is that solar technology is more cost-competitive in Hawaii than in other states. Hawaii has the highest average price of electricity in the country, nearly 50% higher than the next state and over double the national average
17 Because this policy did not allow solar-generators to be paid the retail rate for electricity, however, solar installations were not as financially viable long-term investments for residential PV.
16 Figure 4. Annual solar installations in Hawaii, 2010 through Q2 2019. Data sourced from Solar Energy Industries Association’s database of state-by-state solar information (https://www.seia.org/state-solar-policy/north-carolina- solar). Utility installations refer to utility-scale installations, not necessarily installations owned by utilities. in 2018.18 Hawaii is isolated from the continental electric grid and lacks indigenous, traditional energy resources such as coal or natural gas. The island state relies on imported petroleum for its power sector, and the costs of importing petroleum and grid maintenance cause high electricity prices (Fares). Hawaii’s regulatory environment is very favorable towards solar deployment. The Hawaii Public Utilities Commission (HPUC) is appointed by the Governor and regulates utilities, including the largest utility Hawaiian Electric Company (HECO) which serves about two-thirds of Hawaiian residential customers (AEE PowerSuite). Hawaii was the first state to establish a 100% RPS, and solar is expected to contribute significantly to that standard through its target date of 2045 (Wang, “Renewable Portfolio Standard, Hawaii”). Hawaii also has an energy efficiency standard, permits third-party sales of solar, and offers state tax credits of 35% for installing solar energy devices (Coffman et al.). The state previously allowed net metering, but significantly altered the program in 2015 due to concerns with grid reliability. HECO customers had installed 487 MW of residential solar PV through 2015 (“Net Energy Metering”), which is more than 30 states have installed through 2019. Net metering and the state tax credit provided financial incentives for residential and commercial solar deployment, which is highlighted in Figure 4, while the RPS required utilities to acquire renewable generation. All these policies were implemented by the Hawaii Legislature. Renewable Portfolio Standards and Net Energy Metering (2001): House Bill 173 The Hawaii State Legislature first introduced its RPS and net energy metering requirements for utilities in the same legislation: HB 173 in 2001. This bill required that electric utilities establish an RPS for acquiring renewable generation, which initially aimed at 9% by 2010 (“HB173”). Hawaii amended the RPS requirements through legislation several times in the next decade and a half, eventually establishing a 100% RPS by 2045 through House Bill 623 in 2015. The original bill, HB 173, also required electric utilities to develop net energy metering contracts for customer-generators.19 This bill was important for solar deployment because it marked the beginning of two significant policies that incentivized utilities to deploy solar through the RPS establishment and non-utilities to deploy solar through financial net metering
18 State solar statistics were calculated using data from the EIA’s Electric Power Monthly database February 2019 edition, the SEIA’s “Solar State-by-State” database with data current through the third quarter of 2019, and the World Population Review’s US state population estimates. All data and calculations can be found in Appendix B. 19 Customer-generators, which may also be referred to as solar-generators or distributed-generators, are any non-utility entities that generate electricity for use behind the utility meter. In states allowing net metering, the excess electricity generated can also be exported back to the grid for a specific rate.
17 incentives. Though both the RPS and net energy metering were subsequently amended several times, this legislation reveals how early the legislature focused on solar deployment. HB 173 was passed in a government led by large Democratic majorities in both chambers and a Democratic governor. The bill was sponsored by several leaders in both chambers, but leaders in each chamber had to compromise regarding disagreements on the penalties for failing to meet the RPS and on the renewable energy credit system. HECO lobbied strongly against the RPS during this session because of the proposed penalties for utilities failing to reach the targets for renewable generation (Cain). The solar installation industry, which grew early in Hawaii because the state had more solar hot water heaters in homes than any other state, advocated for this legislation because it would encourage investment in renewable energies such as solar PV, create jobs, and position Hawaii toward energy independence (Leone). Renewable Energy Technologies Income Tax Credit (2009): Senate Bill 464 In 2009, the Hawaiian State Legislature significantly amended the tax credit for installing renewable energies, allowing for residential home developers to claim the credit and for the tax credit to be refundable to the taxpayer in certain conditions. The second change enabled lower-income groups to more easily invest in solar and claim the credit because the payoff for installing solar became shorter under a tax refund, though the refund was lowered to 24.5% of installation costs in this case . Otherwise, the tax credit was 35% for solar technologies and 20% for wind technologies (“SB464”). This bill passed in a divided government, as the legislature was led by Democratic majorities and the governor was Republican—though Democrats outnumbered Republicans in the legislature 68-8. SB 464 passed along with a package of other bills related to renewable energy, two of which were also signed by the governor—namely an update to the RPS (HB 1464) and an incentive for electric vehicle parking (SB 1202)—while a tax on petroleum products (HB 1271) was vetoed (Perez). Large-scale commercial entities and solar installers who had not been able to take full advantage of the tax credit because of financial limitations helped initiate this legislation, and the bill’s sponsor framed SB 464 as a way to benefit the economy by creating green-collar jobs during the recession and the environment by reducing carbon emissions (Wiles). Immediate conclusions Hawaii is an example of a state where solar has a relative advantage compared to other states, in this case because of high electricity prices and a lack of alternative energy sources. In these states, simple policies such as financial incentives can help push the deployment of solar energy resources by making it easier for commercial and residential groups to install solar. One could argue that there were too many incentives for solar deployment involved in Hawaii as the costs of solar declined more sharply, but the ideal amount of solar deployment depends on the purpose for incentivizing deployment, i.e. faster deployment compared to smarter deployment. In this case, it seems that the Hawaiian legislature aimed to provide its electricity sector with any possible advantage in driving down costs for electricity, for which solar deployment was a good mechanism, so faster deployment may have been the purpose. While there certainly is room for compromise on how to create and implement these incentives, accessibility for solar- generators and utilities was a key aspect of legislation. Additionally, the framing of the impacts of both bills was specific to the state of Hawaii, focusing on state energy independence and utilization of the state’s relative cost-competitiveness of solar.
18 Figure 5. Annual solar installations in Nevada, 2010 through Q2 2019. Data sourced from Solar Energy Industries Association’s database of state-by-state solar information (https://www.seia.org/state-solar-policy/north-carolina- solar). Utility installations refer to utility-scale installations, not necessarily installations owned by utilities.
Nevada The solar story Nevada has the most solar installed per-capita in the country, with about 1.15 kW installed per person in the state, and over 3,500 MW total installed through the second quarter of 2019, which ranks Nevada as the fourth-highest state by solar deployment. Being a sunny southwestern US state, Nevada’s solar resources provide the state with significant potential for deploying solar energy because its unsubsidized costs are among the cheapest in the country. The state has capitalized on that potential, with solar generation providing 12.1% of net generation in 2018.20 Figure 5 documents the trend of solar installations since 2010, with notable fluctuations in the amount installed per year between 2014 and 2019. The fluctuations in residential and non-residential installations roughly follow the story of solar and net metering in Nevada over the past decade, though residential and non-residential make up a small portion of installations. Deployment has been driven by utility installations (“NV Energy Solar Rebates and Incentives”), which are much larger in size than residential and non-residential installations and result in the lumpy year-by-year depiction of installations, with more installations as the costs of solar decline. Net metering is only one factor influencing the trend of solar installations over this period. Nevada has an RPS which was increased in 2019 to a requirement of 50% electricity generation from renewables by 2030 with a target of 100% carbon-free generation by 2050. Previously, the RPS required 25% from renewables by 2025 with a 6% carve-out for solar, but Nevada already reached these targets and did not include a carve-out for solar in the new RPS because solar accounts for roughly half of the renewable mix in the state (Morehouse). The Public Utilities Commission of Nevada (PUCN) regulates NV Energy.21 Though nearly all residential customers are served by the public utility NV Energy, third party sales of electricity and net metering with the grid are allowed with system size and rate limitations (“NV Energy and Solar Net Metering”). In a state with such significant solar resources, few policies are needed to spur solar deployment beyond the economics of declining costs of solar and the federal investment tax credit, which has spurred incredible growth for solar companies in the state. SunPower, SolarCity, and First Solar are some of the larger names with several large-scale solar farms throughout the state. The RPS and its large
20 State solar statistics were calculated using data from the EIA’s Electric Power Monthly database February 2019 edition, the SEIA’s “Solar State-by-State” database with data current through the third quarter of 2019, and the World Population Review’s US state population estimates. All data and calculations can be found in Appendix B. 21 NV Energy is the only public, monopoly, vertically-integrated investor-owned utility (IOU) in the state for the electricity sector, and NV Energy serves 95% of Nevada’s residential customers (AEE PowerSuite).
19 solar carve-out has influenced the deployment of renewable sources of energy, and net metering has provided a residential incentive, but the most important driver of solar deployment throughout the past decade in Nevada has been the declining costs of solar. Net metering and the Solar Bill of Rights (2017): Senate Bill 405 Net metering was originally introduced in Nevada in 1997, and through 2015 electricity customers could connect eligible systems, including solar systems such as rooftop PV, to NV Energy’s grid and receive compensation at the retail rate of electricity for all excess energy produced and sent to the grid. In 2015, the Nevada legislature passed SB 374, which required the PUCN to examine the electric rate structure and whether solar cost-shifting, the idea that non-solar users subsidize solar users’ net metering rates, had been occurring under the current structure (Farley). Through 2016, at least 16 states had commissioned cost-benefit analyses on solar cost-shifting, and every analysis found the cost-shifting argument to be mostly false (Andorka), though it’s unclear where else the subsidy for net metering could come from if not the utility or other customers. Regardless, the PUCN acted on its commissioned study and approved a new rate to begin in 2016 that increased the monthly basic service charge for solar-owning NV energy customers by 50% and decreased the volumetric rates paid for excess energy produced by about 10%. These reforms were contentious because they were approved through non-legislative action, did not grandfather in existing customers’ rate structures, and primarily benefited utilities who were able to buy excess electricity produced by distributed generation systems at wholesale prices rather than retail prices (Whaley).22 Utilities did contract a massive amount of utility-scale projects in the following years, but the benefits of this growth were not shared evenly with residential solar installers. After SB 374 passed in 2015, solar companies fought back hard against the PUCN and how they viewed the influence of NV Energy on decision-making, accusing the PUCN of being “in the back pocket of the utility” and at one point nearly staging an armed protest at a PUCN meeting. Though one PUCN Commissioner at the time denied accusations of the utility’s influence and corruption, the Democratic governor did not reappoint him following the end of his term that year (Bade). The new rates led to significant pushback and legislative action to reverse the changes. In 2017, the legislature passed AB 405, also known as the Solar Bill of Rights, which incentivized residential customers to install solar without removing utility incentives to use utility-scale solar projects. In the first year of its implementation, there were over 11 times as many applications for solar rooftop PV installations compared to the previous year (Zipp). Over 184 MW of residential solar PV has been installed or approved for installation since implementation of the bill in late 2017 (“Net Metering in Nevada”). The bill changed the monthly basic service charge for solar customers and created a declining rate system for new net metering charges to new installations.23 The rights provided to residential electricity customers in the bill include the rights to use technologies that generate and store solar energy, to connect these technologies to the grid, and to be paid fair rates for excess energy generation (“AB405 Overview”). In 2017, Republican Brian Sandoval was governor, while both houses of the legislature were led by Democrats, and all sponsors and cosponsors of AB 405 were Democrats. Solar lobbyists found a less- combative approach on the legislative side was much more effective at generating positive change in solar energy policy, both for utility-scale and residential. For the utility’s part, NV Energy has invested heavily in solar with clean energy as a significant priority in its future energy outlook. The utility offers incentives for installing solar, energy storage, and electric vehicle technology, and allows customers to choose to
22 As described in my literature review, wholesale prices (which are typically charged to bulk consumers of energy, not individual consumers of energy) are always lower than retail prices (which are typically charged to residential and individual commercial consumers of energy). When consumer-generators of solar energy are paid at wholesale prices, they are paid less per unit of energy generated, and the financial incentive to install solar is weakened. 23 While the net metering rate was not restored from the retail rate to the wholesale rate, it was increased significantly from the wholesale rate through AB 405. Starting at 95% of the retail rate, after every 80 MW of residential solar PV is installed, the net-metered rate paid to new installations decreases (to 88%, 81%, then 75%).
20 source their electricity from renewables. Political change and the extreme rhetoric employed by solar companies during this development of net metering policy have caused back-and-forth shifts in the incentives for solar deployment in Nevada, which has been bad for stability of the solar industry. Solar lobbyists ultimately had more success convincing the legislature to enact change on net metering than lobbying the 3-person PUCN to change the net metering structure. The coalition supporting AB 405 proved effective at providing “a stable, predictable market for solar companies” and utilities, according to a policy director at SEIA (Snyder). Immediate Conclusions Legislative action on net metering rules was more easily influenced by solar advocates in Nevada than regulatory action from the PUCN. This is likely a combination of the political power of Democrats, who typically favor renewable energy, in the Nevada legislature and the lobbying power of utilities with the PUCN Commissioners. In developing policy, balancing the costs and benefits more evenly between utilities and customers can incentivize more permanent solar growth as neither group will likely actively work to undo the legislation. This is why building coalitions across the industry is so important, especially between utilities and their competitors for distributed generation such as solar installers. The political will of solar energy advocates can be significant, as a policy which negatively affected solar deployment through changing the net metering structure was rolled back less than two years later after significant popular pushback. In a state where the costs of solar are favorable, the utility will also likely be more favorable to solar energy and may push back less against policies beneficial to solar, provided that the utility is included in the development process for the policy. The RPS in Nevada is a good example as NV Energy met and exceeded its requirements well before the 2025 target.
Massachusetts The solar story While the average amount of solar irradiation in Massachusetts is less than that of southwestern states, a deregulated electricity market with net metering and a Solar Renewable Energy Credit (SREC) market paved the way for significant solar deployment in Massachusetts. Despite having the 44th highest technical potential for solar deployment according to the NREL report described in the literature review (Lopez et al.), Massachusetts is eighth in installed solar capacity with 2,500 MW installed and sixth in solar generation as a percent of net generation with 11.17% in 2018. Similarly to Hawaii, solar technologies are also relatively cost-competitive even in the absence of financial incentives in Massachusetts because the state has high average electricity prices, ranking fourth across all sectors and third in the residential sector in 2018.24 Utilities in Massachusetts cannot own generation in the deregulated electricity market, so the Department of Public Utilities (DPU) regulates the generation and transmission of electricity in the power sector, including net metering contracts, retail rates, RPS compliance25, and the SREC market. Because the electricity market is deregulated, nearly all solar installations have been across the residential, commercial, and industrial sectors. Because solar generation is largely decentralized in Massachusetts, net metering rules help incentivize solar deployment by providing financial incentives favorable for customer-generators of solar. However, a cap on net metering installations was reached in 2018, which is why Figure 6 on the following page shows solar installations falling during that period while a new solar program was being developed by the DPU. The new program rolled out in 2018, so deployment could return to higher levels26.
24 State solar statistics were calculated using data from the EIA’s Electric Power Monthly database February 2019 edition, the SEIA’s “Solar State-by-State” database with data current through the third quarter of 2019, and the World Population Review’s US state population estimates. All data and calculations can be found in Appendix B. 25 Massachusetts’ current RPS is 16% by 2018, increasing by 2% a year thereafter. 26 There is a lag between applications for connecting solar generation via net metering to the grid and the completion of solar installations, at which time the capacity would be “installed” and added to the grid.
21 Figure 6. Annual solar installations in Massachusetts, 2010 through Q2 2019. Data sourced from Solar Energy Industries Association’s database of state-by-state solar information (https://www.seia.org/state-solar-policy/north- carolina-solar). Utility installations refer to utility-scale installations, not necessarily installations owned by utilities.
Green Communities Act (2008): Senate Bill 2768 The Green Communities Act was a comprehensive piece of legislation, creating around a dozen programs aimed at energy reform in Massachusetts, including the Department of Energy Resources (DOER). Three of the components of the Act involved solar energy. SB 2768 (1) expanded Massachusetts’ RPS, which divided renewables into two classes with different targets27 and led to the creation of a solar carve-out; (2) introduced net metering rules for solar energy devices up to 2 MW; and (3) authorized utilities28 to own up to 50 MW of renewable generation, with priority given to solar sources (Reid). The bill, sponsored by many Democrats including the Speaker of the House, was signed by Governor Deval Patrick (D) less than two weeks after it was introduced in the solidly Democratic state legislature29. Despite the legislation containing several policies to advance renewables, not all components of SB 2768 strictly promoted renewables or solar deployment. The writers of the bill did find a compromise between fossil fuel and renewable stakeholders which created the Alternative Energy Portfolio Standard (AEPS). Fossil fuel interests had proposed including fossil fuel technologies with emissions standards30 in the state’s RPS, but significant pushback led to the creation of the AEPS to preserve the integrity of renewables in the RPS while also creating a mechanism to support the growth of domestic non-renewable energy sources (Massachusetts 2008 Energy Bill). The majority of the stakeholder process with this bill’s formulation seems to have occurred before it was formally introduced in the Senate, and many of the policies were taken from previously introduced bills and ideas, making this legislation a vehicle for several energy-related bills. Legislative supporters of the bill framed the policies as means to promote renewables and the clean energy industry, to reduce electric bills, and to improve the environment (Massachusetts Enacts Green Communities Act). State solar developer BrightPath Energy believed that the solar carve-out in the state’s RPS would be sufficiently high to spur investment (Doan). Utility interests wanted the
27 Class I of renewables included new installations and expansions of solar, wind, hydro, and low-emission advanced biomass technologies, which had a target of 15% of sales by 2020. Class II of renewables included existing low-emission biomass and hydro technologies with an undetermined target (Massachusetts 2008 Energy Bill). 28 In Massachusetts, electric utilities are authorized to own the means of transmission, not the means of generation. 29 Democrats held over 87% of seats in each chamber of the Massachusetts state legislature in 2008. 30 Similar to the inclusion of low-emission advanced biomass technologies—which are not zero-carbon technologies—in the RPS, fossil fuel interests proposed the inclusion of fossil fuel technologies with emissions standards in the RPS. These technologies would be traditional energy generation plants fitted with means of capturing the carbon that would normally be emitted into the atmosphere, such as coal plants with carbon capture technology at the point source of emission.
22 legislation to balance clean energy incentives with maintaining low electricity rates and high competition, so they opposed the solar carve-out (Rio). Solar Energy Act (2015): Senate Bill 1979 In a yearly bill which focuses on mechanisms for addressing climate change,31 the Solar Energy Act made solar energy deployment a key component. The act required that DPU and DOER restructure the financial incentives for solar and create a new program to replace both solar net metering and SRECs. In the interim, the value of credits to new net-metered solar customers, excluding residential customers, would be 60% of what they had been previously (“Bill S.1979”). In implementing this legislation, DPU and DOER created the Solar Massachusetts Renewable Target (SMART) Program after two years of developing regulations. The SMART Program changed the net metering system from credits to direct payments for excess generation, and the Program has an incentive structure that could deploy 1600 MW of solar (Serreze). Though solar deployment lagged in the state while this program was being rolled out by Massachusetts, the DOER estimates that the program will save ratepayers $4.7 billion over previous solar programs, and the SMART Program targets distributed generation projects under 5 MW (Walton). The Solar Energy Act was sponsored by the Democratic leader of the Senate32 and signed by Governor Charlie Baker (R) in April 2016, nearly a year after it was introduced. Both solar advocates and utility representatives wanted change in solar energy policy in 2015 because of the upcoming cap in the net- metered capacity for solar installations, though solar advocates were concerned with incentivizing deployment and utility representatives were concerned with minimizing costs and developer subsidies (Massachusetts to Revamp Solar Energy Incentive Program). The promise that the bill would lead to an entirely restructured solar market addressed concerns from both sets of stakeholders. Immediate conclusions Both bills were sponsored by Democratic leaders in the House and Senate, which could show that meaningful solar legislation has a higher chance of passage with the support of party leadership. Even in a state as staunchly supportive of renewables as Massachusetts, legislators had to find compromises while developing policies that would help the deployment of solar. The development of the AEPS as a compromise in the Green Communities Act to prevent the incorporation of fossil fuel subsidies within the state’s RPS is an example. In states where the public utility regulators—which are the DPU and DOER in Massachusetts—have demonstrated competence in implementing previous legislation and are politically aligned to an extent with the legislature, the state legislature can pass bills focusing on policy goals, providing somewhat vague requirements for regulators to implement mechanisms to achieve this goals. In the Green Communities Act, the legislature set the policy goal for the RPS and the desire to carve out support for one technology, but left the decision on which technology to the DOER, which chose to create a solar carve-out on the basis of the economics and scale of solar (Doan). In the Solar Energy Act, the legislature set the policy goal of creating a more stable solar market in today’s electricity market, and the legislature gave full responsibility to the DPU and DOER to restructure the solar financial incentives to achieve a stable solar market.
31 Senator Marc Pacheco, a longtime Democratic leader in the Massachusetts Senate and current chairman of the Global Warming and Climate Change Committee, seems to introduce at least one bill a year to address climate change in some manner, titled “establishment of a comprehensive adaptation management plan in response to climate change.” In 2015, this bill was dubbed the Solar Energy Act and focused on incentivizing solar deployment. 32 Democrats held over 75% of the seats in both chambers of the Massachusetts state legislature in 2015.
23 Figure 7. Annual solar installations in New Jersey, 2010 through Q2 2019. Data sourced from Solar Energy Industries Association’s database of state-by-state solar information (https://www.seia.org/state-solar-policy/north-carolina- solar). Utility installations refer to utility-scale installations, not necessarily installations owned by utilities.
New Jersey The solar story New Jersey has the highest installed solar capacity in the northeast with over 2,900 MW installed, which ranks seventh nationally. The state is tenth in both solar installed per capita and solar generation as a percentage of net generation at 4.23%,33 despite ranking 42nd in technical potential for solar installations in the NREL report described in the literature review (Lopez et al.). New Jersey has arguably the most favorable net metering rules for customer-generators (Arizona Last in Net Metering Report), and solar deployment has been driven by consistent growth in residential and commercial installations. A statewide RPS with an overall target of 50% by 2030 and a solar target of 5.1% by 2021, accompanied by a SREC market, has also enabled the growth of New Jersey’s solar market. The New Jersey Board of Public Utilities (BPU) is appointed by the governor and regulates the transmission of electricity by the state’s utilities, which are not authorized to own generation34. Solar also has a favorable economic environment in New Jersey since the state’s electricity prices are relatively high—ranking 10th across all sectors and 12th in the residential sector in 2018—and the electricity market is deregulated, which allows easier entry for third party solar installers and generators. Each of the four New Jersey bills analyzed on the following pages involved policy changes to both the state’s net metering rules and the state’s RPS. Senate Bill 2936 (2008): net metering, interconnection standards, and renewable energy credit rules SB 2936 significantly expanded the net metering framework in New Jersey by (1) expanding the list of eligible customers for net metering beyond residential customers to include commercial and industrial customers, (2) adding two options for compensation of excess generation, (3) extending net metering to all renewables, and (4) allowing utilities to recover costs from adding and improving net metering equipment. The bill also slightly increased the RPS requirements for 2009 and 2020 targets (“S2936”). Under a unified Democratic government, SB 2936 was sponsored by four Democrats. While the Senate vote on the bill was nearly unanimous in support, the vote in the Assembly was along party lines with Democrats supporting the bill and Republicans opposing the bill. While New Jersey was ranked second in the country by solar installations in 2008 (New Study Evaluates Solar Issues), solar advocates in
33 State solar statistics were calculated using data from the EIA’s Electric Power Monthly database February 2019 edition, the SEIA’s “Solar State-by-State” database with data current through the third quarter of 2019, and the World Population Review’s US state population estimates. All data and calculations can be found in Appendix B. 34 The utility installations depicted in Figure 7 refer to utility-scale installations, describing the size of the installation rather than the ownership of the installation.
24 the state wanted to encourage growth to continue in solar deployment as solar technologies became increasingly cost-competitive. The utilities in the state also wanted to capitalize on changes to the net metering rules included in the bill and successfully lobbied the legislature to include a provision that allowed them to recover costs from net metering (Shrestha). Though this addition did not directly encourage solar deployment, it indirectly enabled solar deployment by aligning utility incentives with the maintenance and improvement of net meters, which are the mechanism by which solar generators could connect to the grid and be compensated for excess generation. The Solar Energy Advancement and Fair Competition Act (2010): Assembly Bill 3520 This Act required 5.1% of sales from suppliers and providers of electricity in New Jersey to be sourced from solar electric generation facilities by the end of 2021, either through procurement of generation or purchase of SRECs. AB 3520 also removed the 2 MW individual system size cap for net- metered generation and directed the BPU to periodically consider increasing the RPS solar requirements in addition to implementing a multi-year schedule for electric suppliers to meet solar requirements (“A3520”). The Act had bipartisan sponsorship, led by the Chairman of the Assembly Telecommunications and Utilities (ATU) Committee, and passed through the unified Democratic government with a few Republicans joining the significant majority of Democrats in voting for the bill. The bill was supported by industrial and commercial customers, ratepayers, and solar companies. Legislators worked primarily with the state’s solar community to develop this legislation, aiming to establish a regulatory environment that enabled solar deployment and advanced New Jersey as a national solar leader (NJ Legislators Plan to Expand Solar Energy Market), claiming that double-digit returns on solar investments were possible (Berman). Solar advocates—Solar Alliance, SEIA, and Vote Solar—applauded New Jersey as a model to other states for incentivizing solar deployment after this legislation, as the model supported a diverse energy mix and encouraged installations and job growth through financial incentives (Solar Advocates Applaud New Jersey’s Renewable Energy Bill Passage). Solar Act (2012): Senate Bill 1925 By 2012, New Jersey was experiencing sharper growth in solar deployment than had been expected, which was a good sign about the state of solar in New Jersey but threatened to destabilize the financial market of SRECs designed by the state’s regulators to incentivize solar. In order to ensure the state’s solar industry could continue to grow, the state legislature and the BPU needed to make key changes with more ambition for solar deployment (Staff Writers). The Solar Act sought to increase the stability of New Jersey’s solar market through a variety of measures. Importantly, SB 1925 (1) accelerated the solar RPS requirement by four years to match demand, (2) reduced the payment level for alternative compliance35 to match the declining cost of solar, (3) extended the lifetime for SRECs to be claimed by solar developers, (4) clarified that large solar facilities can connect to the grid, and (5) required electric utilities to allow public entities to engage in aggregated net metering contracts (“S1925”). Because this legislation focused on realigning the market incentives for solar with increasing demand so that the solar market did not collapse, there was very little opposition to this bill. The bill was largely pushed by solar advocate SEIA, who helped state legislators convene a stakeholder process to develop these mechanisms for stabilizing the solar market (“New Jersey Passes Legislation to Stabilize Its Solar Market”). Stakeholders knew there was potential for solar deployment to slow down slightly in the years following the passage of this bill, though annual installations in 2013-15 were higher than pre-2011 levels as Figure 7 on the previous page shows. This concern was offset because the legislation focused on promoting long-term stability and growth in New Jersey’s solar market. The Solar Act was sponsored by several Democrats,
35 If entities which are required to account for a certain percentage of their electricity sales with renewable generation through the state’s RPS do not meet that percentage, they must pay alternative compliance payments for however far below the level of required renewable generation they are at.
25 including the ATU Committee Chairman and the Senate President, and the votes were nearly unanimous, though some Republicans voted against the bill in the Senate.36 Assembly Bill 3723 (2018): clean energy and energy efficiency standards AB 3723 was framed as legislation promoting New Jersey as a national leader in solar energy in the face of federal inaction on clean energy policy by the bill’s supporters (New Jersey Signed Clean Energy Law). The bill extended the state’s RPS to 2030 with increased solar targets, increased the authorized aggregate net-metered capacity to 5.8% of total electricity sold, and established a pilot community solar program for BPU to implement (“A3723”). All sponsors of AB 3720 were Democrats, and several chaired important committees, including the ATU Committee. Both chambers voted along party lines, with nearly all Democrats voting for the bill and most Republicans voting against the bill, which was signed by Governor Phil Murphy (D). Solar installers and advocates37 formed a coalition to spur the development and passage of this legislation following proceedings by the BPU seeking stakeholder input on the state’s solar market (Historic NJ Renewable Energy Measure). Immediate conclusions It seems the sponsorship of bills with solar energy provisions has been important in the passage of significant solar energy policies in New Jersey. All four of these bills were sponsored by Democratic leaders in the state legislature, with the current Chair of the ATU Committee sponsoring each. Additionally, while some of the bills did find bipartisan support in the legislature, notably the Solar Energy Advancement and Fair Competition Act of 2010 and the Solar Act of 2012, all were initiated and primarily championed by Democrats, who have led both chambers of the legislature since 2003. The rhetoric of the supporters of these bills focused on making the state a national leader in solar and renewable energy, and each of these bills included measures amending the state’s RPS and net metering rules, which shows the legislature was consistently responding to the growth of the solar market over this period.
North Carolina The solar story North Carolina has one of the most complex narratives in its buildup of solar deployment throughout the past decade. The state has the second-most solar capacity installed behind California, with over 5,600 MW installed through the second quarter of 2019, despite ranking 29th in potential for solar deployment in a study done by NREL described in the literature review (Lopez et al.). In 2018, solar generation accounted for 5.37% of total generation in NC, ranking ninth in solar as a percentage of generation in the country.38 Figure 8 on the following page shows the trend of solar installations since 2010, with utility-scale installations contributing the most to total installations, largely due to the ban on third party sales of electricity. The years 2015 through 2017 have marked the highest years for solar installations for several reasons, with one primary reason being the state’s significant tax credits for solar installations. The state stopped accepting applications to claim the tax credit after 2015, and the majority of credits claimed in 2015 resulted in installations in the few years after the credits expired (Way).39 NC has a regulated electricity market, in which the NC Utilities Commission (NCUC) regulates the two public, monopoly, vertically-integrated IOUs, Duke Energy and Dominion Energy (AEE PowerSuite). NC’s RPS,
36 This is the only New Jersey policy highlighted which was signed into law by a Republican governor, Governor Chris Christie. 37 These advocates include KDC Solar, Vote Solar, Earthjustice, the Coalition for Community Solar Access, Solar Energy Industries Association, and Sunrun. 38 State solar statistics were calculated using data from the EIA’s Electric Power Monthly database February 2019 edition, the SEIA’s “Solar State-by-State” database with data current through the third quarter of 2019, and the World Population Review’s US state population estimates. All data and calculations can be found in Appendix B. 39 A tax credit can be claimed before a solar device is fully installed, which is why credits were claimed in 2015 for installations that came online in the following years.
26 Figure 8. Annual solar installations in North Carolina, 2010 through Q2 2019. Data sourced from Solar Energy Industries Association’s database of state-by-state solar information (https://www.seia.org/state-solar-policy/north- carolina-solar). Utility installations refer to utility-scale installations, not necessarily installations owned by utilities. which passed in 2007, requires 12.5% of power generation to be from renewable sources by 2021 with a 0.2% solar carve-out. In addition to the declining costs of solar and federal tax credits, solar deployment is high in NC due to significant state tax credits,40 an RPS with a solar carve-out, and a 2017 bill creating several utility solar programs. As a state with less average solar irradiance than southwestern states, a regulated electricity sector that limits the role of third party solar companies, and less ambitious renewable energy targets, NC is not a likely state to have the second-most installed solar capacity. However, a series of policies have encouraged solar deployment by making installation cost-competitive with other sources and requiring the dominant utility, Duke Energy, to invest in solar energy (Smith).
Renewable Energy and Energy Efficiency Portfolio Standard (2007): Senate Bill 3 SB 3 in 2007 set a requirement for all IOUs to supply 12.5% of their retail electricity sales from eligible energy sources by 2021, and up to 25% of the requirement could be met through energy efficiency technologies. The eligible energy sources include solar, wind, hydropower, wave energy, biomass, landfill gas, combined heat and power, and electricity demand reduction. There is a specific 0.2% carveout for solar (Wang, “Renewable Energy and Energy Efficiency Portfolio Standard”) because policy-makers believed costs alone wouldn’t efficiently promote solar, though solar provides more electricity generation in North Carolina’s energy portfolio today than any other renewable energy source. A final piece of the bill, which was heavily pushed by Duke Energy Carolinas and Progress Energy Carolinas41, enabled utilities to recoup financing costs for approved nuclear generation and coal-fired generation power plants earlier in their lifetimes while the projects are under construction (“North Carolina OKs SB 3”). The bill helped unleash the potential of the state’s 35% solar tax credit program, which could be claimed by individuals and companies. Between 2010 and 2018, Duke Energy and Blue Cross NC42 together collected over a third of the credits (Way).
40 These state tax credits for renewable energy investments were 35% of investment value, but they expired and were not renewed in 2015. While the credits could still be claimed, combining state credits with federal credits could net 65% of an investment’s value in tax credits. 41 Since this bill was passed in 2007, Duke Energy Carolinas and Progress Energy Carolinas have merged to become Duke Energy, which is the dominant electric utility in the state now in terms of generation and coverage. 42 Blue Cross NC plays a role in collecting these credits by financing commercial investments on renewable energy, and by being the main investor in a large amount of solar energy investments is able to claim the credits for these investments.
27 Lauded as the first state RPS policy to be passed in the southeast, SB 3 was backed in its final version by a coalition of both political parties, environmental advocates, and major utilities (Glazer). However, neither environmental advocates or major utilities thought the bill was perfect. Environmental representatives, including state representatives and the Sierra Club, wanted the bill to focus exclusively on renewable energy and efficiency and to not address financing mechanisms for utility infrastructure (“North Carolina OKs SB 3”). The utilities seemed to back the bill only because the financing mechanism was incorporated, though without utility support, the RPS could feasibly have been passed through the Democrat-led legislative and executive branches. In 2007, NC’s governor was Democrat Mike Easley, and both the House and Senate had Democrat majorities. The bill was sponsored by a Democrat and cosponsored by a mix of 10 other Democrats and four Republicans, while votes in both chambers were nearly unanimous in support. In development of the bill’s policy features, there appeared to be significant negotiation to find middle ground in which the package of policies provided some favorable policies to each involved stakeholder. Competitive Energy Solutions for North Carolina (2017): House Bill 589 House Bill 589 created a variety of programs which all guarantee set amounts of renewable energy will be installed by set deadlines, including some programs exclusively for solar energy. Though these programs do not drive the current data on solar deployment for North Carolina, they are a good signal of the growth of solar in the near-term future in the state. These programs include competitive procurement of 2,660 MW of renewable energy by Duke Energy, competitive procurement for 600 MW of renewable energy open to utility and non-utility entities, a solar rebate program for 20 MW of rooftop solar installations through 2022, a solar leasing program to create a framework for third party purchases overseen by the NCUC, and a community solar program requiring Duke Energy to offer 40 MW to customers (“HB589”). The bill also includes two studies: one on energy storage conducted by the NC Policy Collaboratory and one on the effects of wind energy on military installations, which was accompanied by an 18-month wind energy moratorium on issuing new permits (Shallenberger). In 2017, NC’s governor was Democrat Roy Cooper, while both chambers were led by veto-proof Republican majorities. Three Republicans sponsored the bill.43 The bill’s vote was largely down party lines with Democrats opposing it because of the inclusion of the wind energy moratorium. Similar to the RPS, this bill included a suite of policies to promote growth in renewables, though environmental groups were not fully satisfied with the scope and scale of capacity to be added through these mechanisms (Sorg). Everyone was against the wind energy moratorium except the Republican senators, one of which introduced it as an amendment, but saw its inclusion as a compromise for securing a concrete victory for renewables in a Republican-controlled assembly. The Democratic governor signed the bill to uphold the “fragile and hard fought solar deal” despite the wind moratorium added near the end of the development process, which resulted from a nearly year-long stakeholder process in which utilities, environmental advocates, ratepayer advocates, big and small businesses, and solar companies played a role (Shallenberger). Environmental groups hoped for stronger renewable incentives, but were forced to play defense in the bill’s development. The bill’s idea was originally supported by Duke Energy to ensure that they could capitalize better on the substantial solar growth of this decade. Immediate conclusions Framing solar incentives in terms of cost-effectiveness and economic growth was an emphasis in both bills. In NC, both environmental groups and utilities have significant influence in policy-making, although the party in power shifts which stakeholder can more easily initiate legislation, with Democrats and Republicans being more closely linked to environmental groups and utilities, respectively. Both of these bills, which are the two major solar bills of the past 15 years, were passed as packaged bills, including
43 One notable sponsor was Representative John Szoka, who has sponsored significant renewable energy and energy efficiency bills as a Republican during his time in the NC House and chairs the Committee on Energy and Public Utilities.
28 a suite of policies that somewhat satisfied most stakeholders involved in the policy-making process, primarily solar advocates and utilities.
V. Discussion To develop a clear narrative of the solar story for each state, research beyond the surface-level analysis of a state’s solar energy industry was necessary, as only so much information about the political circumstances associated with solar energy legislation was gleaned from secondary analysis. To learn more about the political circumstances within each state, primary sources held information regarding state energy markets throughout the past decades, the influence of outside interests on the development of and support for legislation, the rhetoric politicians and other stakeholders used to fight for and against legislation, and decision-makers involved in the political process. This mode of analysis was most helpful in getting beyond the content of the policies to examine the process by which policies passed. Steps 2 and 3 of my methodology for each state blended together somewhat as my initial research to identify policies and the solar story in the state was often informed and changed by more in-depth research into specific policies and their surrounding circumstances. Research into New Jersey is a prime example of how focused research informed my thoughts about the state’s solar story. Originally, New Jersey’s solar story seemed to revolve around net metering, but further research indicated that nearly every policy relevant to net metering rules in the state over the past 12 years was attached to RPS policies as well. This insight allowed the expansion of analysis to more policies within the state.
Comparing hypotheses to results The first hypothesis I identified was that each state’s solar story would be unique, but that trends would emerge amongst the policies states use and the political circumstances associated with these policies.44 An implicit assumption in this hypothesis is that these trends are important in the context of solar energy because state solar energy policies have an impact on solar deployment. To determine whether this assumption is true, it is necessary to examine the alternative viewpoint that solar deployment in American states is driven only by the economics of solar with policies having no impact. While the declining costs of solar have certainly made solar energy more cost-competitive,45 the pure costs of solar energy declining does not sufficiently explain in which states solar energy has been deployed. Revisiting Figures 1 and 2, solar energy production should be the most cost-competitive with other traditional energy sources in states in the southwest due to higher levels of solar irradiation. However, there are several states outside the American southwest with similar or higher levels of solar deployment than southwestern states, and levels of solar deployment vary significantly even within the region. Simply looking at the two maps with context intuitively shows that some factors beyond the economics are important in incentivizing solar deployment. For several states, including Massachusetts, New Jersey, and North Carolina in the case set, solar energy deployment has to have been linked to policies to some extent. Though this is speculation, states with lower levels of solar deployment could have had as much solar generation as those in the case set had they implemented similar policies—though tailored to their unique structure—on a similar timeline. Beyond intuition, there are policies with clear impacts on solar deployment that lead to a rejection of the alternative viewpoint that—to paraphrase— policies do not matter. The first set is subsidies for solar energy deployment, which include long-term financial incentives (e.g. net metering contracts) and short-term financial incentives (e.g. investment tax credits). The economics of solar indicate that today solar is cheaper on an unsubsidized analysis of energy
44 The five trends focusing on policy and political circumstances, as well as one trend regarding background factors for solar deployment, are identified and explained in the next conclusion. 45 According to a Lazard levelized cost of energy analysis in 2018, the average cost of producing one megawatt-hour of solar power in North America declined over 80% from over $350 in 2009 to about $50 in 2017, which is below the unsubsidized average costs for nuclear, coal, and gas (Berke).
29 production than most conventional sources of energy. However, many conventional sources of energy such as natural gas and coal are subsidized,46 so solar energy must also be subsidized to level the playing field of cost-competitiveness. Additionally, policies that increase the accessibility of these solar subsidies and remove barriers to solar installations are good demonstrators of how policy-making can increase accessibility without directly affecting the economics of solar. The following are examples of these accessibility policies: HB 2429 in Arizona expanded solar energy tax credits to commercial and industrial entities, HB 589 in North Carolina created a community solar program, and SB 1925 in New Jersey allowed local governments, agencies, and school districts to participate in net metering aggregation of solar facilities. In my hypothesis, I expected there to be a significant policy difference between Group A, the states with higher solar irradiance in the case set, and Group B, the states with lower solar irradiance in the case set. However, there was no evidence to confirm or deny this hypothesis in the case set of three states within each group. The primary policy mechanisms each state used were pretty similar across all states, and the amount of policy mechanisms applied did not seem to differ significantly across all states. Net metering rules seemed important in each state (except North Carolina), tax credits appeared in some states, each state had some version of an RPS, and various accessibility policies were present across states. One reason it may be difficult to find policy differences between groups of states is that the effect of individual policies is complicated, especially in the presence of the sharply declining costs of solar. Additionally, several of the policies in the case set were passed before 2010 when the economics of solar really started to drive deployment, so it is unclear whether these policies would have had different impacts if implemented in different years. Basing this on previous knowledge about how environmental legislation throughout the last few decades of the 20th century was passed, I expected state solar energy legislation to primarily be sponsored by Democrats, but require a bipartisan effort in most cases to secure passage. In the case set, most policies were sponsored and pushed by legislative leaders of the Democratic Party. Even though many Republicans did vote in favor of some of the solar energy legislation, there was little evidence that a bipartisan effort was necessary in the passage of many of the policies. One limitation of this conclusion is that the states in the case set are disproportionately Democratic when compared to the majority of states in the US. Several of the states, in particular Hawaii, Massachusetts, Nevada, and New Jersey, had dominant Democratic trifectas in government47 during the period in which policies were passed, so the question of bipartisan effort did not even matter. One notable exception is HB 589 in North Carolina, which was passed in 2017 by a state legislature led by Republicans with a veto-proof majority and a Democratic governor. This policy is unique, however, because of the extensive, nearly year-long negotiation stakeholders went through in its development. My hypothesis also predicted that rhetoric surrounding legislation would focus on the economics of solar, the environmental implications of solar, and be dominated by solar advocates. While rhetoric did seem to focus on these aspects to an extent, it was at a very surface level through public statements of politicians and other stakeholders (e.g. utilities and solar companies). I overestimated how much rhetoric that would be publicly available and relevant to the specific policies, and to what extent the rhetoric could explain the political circumstances associated with solar energy legislation.
Trends absent from hypotheses Several trends emerged from research which were not discussed in my hypothesis, and these seem to be the most interesting conclusions of my research. Who takes part in shaping and supporting
46 An International Monetary Fund study from 2019 indicated that the US subsidizes the fossil fuel industry to a degree of about $649 billion in 2017 (Ellsmoor). 47 A party has a trifecta in government when it controls both chambers of the legislature and the executive.
30 solar energy policies has an impact on the long-term stability of the solar market, the near-term deployment of solar energy, and the likelihood that future legislation will undo initial legislation. The primary policy mechanisms used by states in the case set can be easily identified because there is not a wide variety of policy mechanisms used, and the importance of net metering for incentivizing residential solar deployment in many states was unexpected. There are also variations in how much responsibility for implementing solar legislation a state legislature will delegate to its PUC, largely based on the demonstrated competence and political alignment of the PUC.
VI. Conclusion The solar energy market is expanding rapidly, but not all states are capitalizing on the potential of solar energy. Many states with substantial potential for solar energy currently have little solar energy deployed while others with less potential have deployed a lot, and it is clear that state-level policies have played a role in solar deployment. Among its benefits, solar energy could help states reach ambitious renewable energy goals, lower the costs of electricity generation, reduce electricity sector pollution, and increase resiliency through distributed generation resources. While the levels of solar irradiance and the economics of solar within a state influence the deployment of solar, state solar energy policies have also played an important role in transforming the potential of solar energy resources within a state into solar energy generation.48 For states pursuing solar deployment, the following identified trends provide analysis for what policies to examine and the political circumstances which have been associated with high deployment. Particularly, Trends C, D, and E provide context for what policies and framing states with significant deployment have used, and Trends A and B provide context for what political circumstances have allowed solar policies to succeed in the case set of states.
Trend A: The majority of solar legislation in the case set is sponsored by Democrats, primarily led by legislative leaders. While many of the bills analyzed in the case set did draw legislative or gubernatorial support from Republicans, the bills in the case set are much more closely associated with Democrats across the six states. This is not surprising, considering clean energy promotion has been part of the Democratic agenda during much of the 21st century. There are a few implications to draw from this, but it is important to note that many of the states in the case set are heavily Democratic, with the state legislatures from New Jersey, Massachusetts, and Hawaii all being led by Democrats in both chambers throughout the past two decades. Nevada’s state legislature was mostly Democratic during this time period, but Arizona and North Carolina’s legislatures both were more purple. Looking at individual policies, every single policy was sponsored and pushed forward legislatively by Democrats, with some garnering bipartisan support from its introduction or elsewhere in the legislature. The primary exception is North Carolina, where Republican leadership helped pass HB 589 in 2017, and the rhetoric surrounding that bill focused on North Carolina maintaining its national leadership role in solar deployment. The other policy researched in North Carolina, SB 3, was supported and passed by Democratic leadership. In general, Democratic leadership is the trend, with bipartisan support being common and Republican leadership being the exception. Implications Democratic leadership does not have to be the rule for developing legislation that promotes solar energy. The benefits of solar energy, as mentioned earlier, do not have to be framed in partisan terms. Many of the states with high potential for deploying solar energy resources have state legislatures currently controlled by Republicans, including nearly every southeastern state and a few others such as
48 For a fuller discussion of the role the economics of solar have played in solar energy deployment, as well as why the economics of solar are not solely responsible for deployment, read the literature review section titled “the economics of solar” and the first paragraph in the discussion section titled “comparing results to hypotheses.”
31 Arizona, Texas, and Utah.49 Efforts in these states to develop and pass solar energy legislation must be led or supported by Republicans in order to have any chance of success. Further, state-level experience with the politics of solar energy could be a model for national action on solar energy. In North Carolina, for example, Democrats do not control either chamber of the legislature, but meaningful solar energy legislation has been passed. In the national context in which Democrats do not control the legislature, meaningful solar energy can still be developed under the right circumstances.
Trend B: Packaging solar policies and building coalitions is important for the success of legislation and for the stability of solar markets. Packaging solar policies refers to legislation that incorporates solar-specific policies with a range of other policies, which are often also focused on energy sources or the electricity sector. There are examples of this packaging in nearly every single state in the case set, and 11 of the 13 policies which I researched in-depth packaged several policies together. In Arizona, HB 2429 made changes to several solar energy tax incentive programs, affecting the residential, commercial, and industrial sectors. In Hawaii, SB 464 focused on tax credits for renewable energy technologies and passed concurrently with two bills regarding RPS changes and electric vehicle incentives. In Massachusetts, the Green Communities Act affected changes to 11 new or existing programs, with only three changes focused on the promotion of solar energy. Other focus areas included energy efficiency, electric vehicles, and the Regional Greenhouse Gas Initiative. In New Jersey, AB 3723 made changes to a community solar program, to net metering rules, and to the state’s RPS. In North Carolina, HB 589 packaged solar energy policies, including a community solar program and new solar financial incentives, with other energy policies, notably including a moratorium on new wind energy projects and an energy storage study. The primary reason that these significant solar policies are often packaged with other policies seems to be that packaging providers a broader basis for building coalitions to support legislation, which in turn produces longer- lasting policies and a more stable solar market. Additionally, a packaged bill carries more legislative weight in changes and may gain more traction in legislatures crowded with bills. In some circumstances, it may be less effective to limit supporters of legislation to solar advocates, so there is an incentive to cater to other stakeholders. Often, the rest of the renewable energy industry, environmental organizations, and utilities help build a broader coalition of support, but may require the attachment of additional policies directly or indirectly benefiting them. The presence of coalitions seems to result in policies less often being reversed or actively opposed in the case set, which seems to be true even in a legislative environment in which solar policy would likely be successful in the absence of a coalition. This is likely because political influence can shift quickly in state legislatures, and organizations which did not support a policy can gain influence and work to reverse the policy, effectively destabilizing the solar market. The two main types of coalitions observed in the case set are bipartisan, in which Democrats and Republicans join forces, and industry-utility, in which the solar industry and electric utilities join forces. In the case set, the coalition supporting policy tended to be political (i.e. Democrat- Republican) in circumstances in which one party does not obtain consistent legislative control, whereas the coalition tended to be private (i.e. industry-utility) in circumstances in which one party held consistent legislative control. Additionally, in legislative situations in which momentum for implementing change on solar policy is building up, it presents a good opportunity to push for further change. New Jersey is a prime example of solar advocates capitalizing on momentum to implement broader solar policy. Each of the four New Jersey bills analyzed coupled change to net metering rules with change to the state’s RPS, three times expanding the solar carve-out.
49 This is according to the National Conference of State Legislatures’ database on state partisan composition (“State Partisan Composition”).
32 Implications The major implication regarding this observation is that any stakeholder that wishes to encourage solar deployment through state legislation should form a broad coalition for support in order to have a stronger chance for effective, lasting legislation. Coalition-building can be the greatest opportunity to developing meaningful solar energy legislation as well as its greatest barrier in states less apt to address climate change. Building coalitions with embedded political strategy may be one of the most important precursors to gaining support and traction for policies that aim to address an effective energy transition (Hess), of which solar energy deployment is a vital component.
Trend C: The primary policy mechanisms used in the case set to encourage solar deployment are net metering, solar carve-outs in Renewable Portfolio Standards, and tax credits. In five of the six states in the case set, net metering has played an important role in solar deployment. If a state’s goal is to encourage residential, commercial, and industrial solar installations, then solar net metering is an important and effective financial incentive. Net metering rules provide very stable long-term market incentives for solar installations because this policy does not require a budget item like a subsidy would and is less susceptible to revision. The compensation level can also determine the strength of net metering as a financial incentive, especially when solar generators are compensated for excess generation at the retail rate of electricity, which is typically the highest. North Carolina is the exception in the case set as the majority of the state’s solar installations have been utility-scale and utility- owned. All states in the case set have an RPS, and several incorporate a solar carve-out within the standard to specifically encourage the growth of the solar market. In many of these states, the solar carve-out was originally created before the costs of solar significantly declined, and it was thought that solar would not be cost-competitive in the near future. However, most states with solar carve-outs have surpassed the levels mandated by their RPS. State tax credits provide significant financial incentive for solar installations in several states, especially since they could be used in combination with the 30% federal solar tax credit. Some state tax credits have expired, however, including North Carolina’s. Another category of solar policy mechanisms which many states in the case set implemented were programs for area-specific deployment of solar, including community solar programs and commercial and industrial incentives. These targeted programs, in addition to encouraging solar investment after implementation, help build a broader coalition during the passage of solar legislation. Implications The fact that there are a set of common policy mechanisms used to promote solar energy deployment in some of the states with the highest levels of deployment is a good sign for other states looking to encourage deployment. Among the three mechanisms, it seems that the ones geared wholly towards solar, which are net metering and tax credits, have been used most effectively, and should be pursued by other states. The use of net metering depends, however, on how the electricity market is regulated in a state, with net metering rules being much easier to implement in states with deregulated electricity markets.
Trend D: A state legislature is more likely to delegate responsibility for implementing solar legislation to the Public Utilities Commission if the PUC has demonstrated competence and is politically aligned with the legislature. Each state legislature’s relationship with its PUC is unique and will affect the extent of responsibility of implementing solar legislation delegated by the legislature to the PUC. If the PUC has demonstrated high competence in implementing popular, effective solar energy legislation, then the state legislature seems more willing to delegate more authority to that PUC in future legislation, and vice versa. Solar legislation always outlines a specific policy goal, such as setting the state’s RPS at a specific level or creating net metering rules for a new set of customers, but does not always detail the path for achieving
33 that goal. The level of detail included in the legislation itself corresponds to how much implementation responsibility is delegated to the PUC. Additionally, the political alignment of the PUC can factor into delegation decisions. If the PUC is elected as it is in Arizona, then political alignment will be directly determined. In the other states in the case set, the PUC is appointed by the governor, so political alignment will depend on how the political relationship between the legislature and governor. This phenomenon seemed to be more reactive than proactive, as both the examples in the case set involve legislatures limiting or expanding the PUC’s role in implementation due to reactions from previous policy implementation. The two examples in the case set occur in Nevada and Massachusetts. In Nevada, the PUCN significantly changed the net metering rates for solar-generators in favor of utilities, which proved a very unpopular policy. Less than two years later, the state legislature passed AB 405, which largely undid the net metering changes by the PUCN and made it impossible for the PUCN to implement similar changes in the absence of legislative action in the future. In Massachusetts, the situation is reversed as the state legislature provided near total authority for the DPU and DOER to develop the SMART Program and create all its associated regulations. This likely was because the agencies had demonstrated competence in implementing sections of the Green Communities Act that encouraged solar deployment.
Trend E: Solar energy policy is often framed as a means for energy independence, national leadership, and/or economic security. Rhetoric and framing of solar energy legislation was fairly similar across states, with most themes addressing how the state can work towards energy independence, being a national leader in solar deployment to attract business, and lowering electricity costs to promote the economy. Policy framing did not seem to have an effect on which policies were selected across states, but it is unclear whether policy framing could have had an effect on the successful passage of policies. Researching policies which failed to be passed in these same states, as well as the rhetoric and framing associated with those policies, could provide insight into this effect. Hawaii seemed to be the only state in which policy was framed somewhat differently than other states by focusing most heavily on energy independence. This is due to Hawaii’s isolation from the continental grid and reliance on imported petroleum for electricity, which drives the state’s high electricity prices, and makes the state determined to find reliable domestic sources of energy.
VII. Appendix
a. List of Acronyms and Abbreviations
Abbreviation Acronym First Use ACC Arizona Corporation Commission P. 15 AEPS Alternative Energy Portfolio Standard P. 22 APS Arizona Public Service Co P. 15 ATU New Jersey Assemby, Telecommunications, and Utilities Committee P. 25 BPU New Jersey Board of Public Utilities P. 24 DOER Massachusetts Department of Energy Resources P. 22 DPU Massachusetts Department of Public Utilities P. 21 EES Energy Efficiency Standard P. 8 EIA Energy Information Administration P. 5 FiT Feed-in Tariff P. 10
34 HECO Hawaii Electric Company P. 17 HPUC Hawaii Public Utilities Commission P. 17 ITC Investment Tax Credit P. 7 LCOE Levelized Cost of Electricity P. 7 MW Megawatts P. 5 NCUC North Carolina Utilities Commission P. 26 NREL National Renewable Energy Laboratory P. 6 PUC Public Utilities Commission P. 6 PUCN Public Utilities Commission of Nevada P. 19 PV Photovoltaics P. 7 RPS Renewable Portfolio Standards P. 5 SEIA Solar Energy Industries Association P. 13 SMART Program Solar MAssachusetts Renewable Target Program P. 23 SREC Solar Renewable Energy Credit P. 21 SRP Salt River Project P. 15 TEP Tucson Electric Power Co P. 15
b. State Solar Data
Installed Solar Technical Technical Solar capacity State Population50 Capacity in Potential in GW Potential in GW installed per MW51 (w/o CSP)52 (w/ CSP) person in Watts Alabama 4,898,246 282.77 2148 2148 57.73 Alaska 735,720 3.64 9007 9007 4.95 Arizona 7,275,070 3873.3 5215 8743 532.41 Arkansas 3,026,412 144.28 2770 2770 47.67 California 39,747,267 25772.78 4197 6923 648.42 Colorado 5,770,545 1268.42 4545 7643 219.81 Connecticut 3,567,871 606.18 23 23 169.90 Delaware 711,571 76.61 3 3 107.66 DC 975,033 132.39 5059 178 135.78 Florida 21,646,155 3337.04 2902 2902 154.16 Georgia 10,627,767 1571.35 3137 3137 147.85 Hawaii 1,416,589 998.92 26 32 705.16 Idaho 1,790,182 488.32 2060 3327 272.78 Illinois 12,700,381 139.03 178 5059 10.95
50 The population estimates come from the World Population Review’s 2019 estimates on US state populations. 51 The installed solar capacity data comes from SEIA’s state-by-state database. 52 Technical potential data comes from the NREL’s 2012 report: “U.S. Renewable Energy Technical Potentials: A GIS-Based Analysis”. I provide measurements of technical potential for solar energy both including concentrating solar power plants and excluding concentrating solar plants, which is a newer technology and only viable in limited areas with very high levels of solar irradiance.
35 Indiana 6,718,616 354.87 3095 3095 52.82 Iowa 3,167,997 93.91 4044 4044 29.64 Kansas 2,910,931 29.28 6982 9867 10.06 Kentucky 4,484,047 43.77 1146 1146 9.76 Louisiana 4,652,581 107.01 2438 2438 23.00 Maine 1,342,097 59.85 663 663 44.59 Maryland 6,062,917 1173.86 404 404 193.61 Massachusetts 6,939,373 2566.84 73 73 369.90 Michigan 10,020,472 160.31 3500 3500 16.00 Minnesota 5,655,925 1206.37 6542 6542 213.29 Mississippi 2,987,895 235.26 2902 2902 78.74 Missouri 6,147,861 229.54 3188 3188 37.34 Montana 1,074,532 57.3 4411 4968 53.33 Nebraska 1,940,919 45.23 4881 6634 23.30 Nevada 3,087,025 3502.45 3750 6308 1134.57 New 1,363,852 95.13 40 40 Hampshire 69.75 New Jersey 8,922,547 2911.06 290 290 326.26 New Mexico 2,096,034 818.13 7122 11982 390.32 New York 19,491,339 1775.44 984 984 91.09 North Carolina 10,497,741 5601.29 2408 2408 533.57 North Dakota 760,900 0.47 5488 5501 0.62 Ohio 11,718,568 231.11 2480 2480 19.72 Oklahoma 3,948,950 36.32 4818 6631 9.20 Oregon 4,245,901 611.66 1919 2936 144.06 Pennsylvania 12,813,969 452.24 413 413 35.29 Rhode Island 1,056,738 175.1 12 12 165.70 South Carolina 5,147,111 830.59 1586 1586 161.37 South Dakota 892,631 1.56 5349 5939 1.75 Tennessee 6,833,793 429.38 1312 1312 62.83 Texas 29,087,070 3028.61 20625 28368 104.12 Utah 3,221,610 1670.84 2410 4048 518.64 Vermont 627,180 303.82 37 37 484.42 Virginia 8,571,946 802.75 1109 1109 93.65 Washington 7,666,343 197.23 1028 1087 25.73 West Virginia 1,791,951 8.53 41 41 4.76 Wisconsin 5,832,661 92.79 3253 3253 15.91 Wyoming 572,381 108.33 2859 4815 189.26
36 Net Residential Net Solar Net Utility-Scale Total Net Solar Percentage of State53 Solar Generation Generation Generation Net Generation Generation Alabama 397 3 144,989 144,992 0.27% Alaska 3 2 6,515 6,517 0.05% Arizona 6,701 1,543 112,303 113,846 5.89% Arkansas 227 13 67,134 67,147 0.34% California 37,539 7,946 197,227 205,173 18.30% Colorado 1,674 366 56,010 56,376 2.97% Connecticut 611 276 39,042 39,318 1.55% Delaware 173 69 6,014 6,083 2.84% DC 71 29 79 108 65.74% Florida 2,853 308 244,898 245,206 1.16% Georgia 2,439 17 130,061 130,078 1.88% Hawaii 1,238 620 9,991 10,611 11.67% Idaho 576 27 17,403 17,430 3.30% Illinois 155 34 187,864 187,898 0.08% Indiana 480 29 112,150 112,179 0.43% Iowa 146 43 64,187 64,230 0.23% Kansas 36 17 52,983 53,000 0.07% Kentucky 85 13 79,191 79,204 0.11% Louisiana 229 212 101,354 101,566 0.23% Maine 68 36 11,451 11,487 0.59% Maryland 1,298 580 43,927 44,507 2.92% Massachusetts 3,194 641 27,965 28,606 11.17% Michigan 241 38 115,966 116,004 0.21% Minnesota 1,385 43 63,234 63,277 2.19% Mississippi 341 5 63,516 63,521 0.54% Missouri 342 117 82,174 82,291 0.42% Montana 58 14 27,424 27,438 0.21% Nebraska 42 6 36,809 36,815 0.11% Nevada 4,837 357 39,929 40,286 12.01% New 0.61% Hampshire 108 69 17,582 17,651 New Jersey 3,219 827 75,255 76,082 4.23% New Mexico 1,553 169 32,639 32,808 4.73% New York 1,899 863 134,156 135,019 1.41%
53 Energy generation data comes from the EIA’s Electric Power Monthly, with this data representing the year of 2018 and available in the February 2019 version of the Electric Power Monthly. For the statistics on Net Solar Generation, Net Residential Solar Generation, Net Utility- Scale generation, and Total Net Generation, all are measured in thousands of megawatt-hours.
37 North Carolina 7,209 89 134,070 134,159 5.37% North Dakota 0 0 41,771 41,771 0.00% Ohio 302 34 124,761 124,795 0.24% Oklahoma 77 7 87,107 87,114 0.09% Oregon 801 104 64,836 64,940 1.23% Pennsylvania 510 207 215,173 215,380 0.24% Rhode Island 135 44 7,167 7,211 1.87% South Carolina 858 163 99,618 99,781 0.86% South Dakota 3 1 11,315 11,316 0.03% Tennessee 255 25 80,437 80,462 0.32% Texas 4,063 527 474,777 475,304 0.85% Utah 2,575 307 39,851 40,158 6.41% Vermont 273 80 2,357 2,437 11.20% Virginia 981 58 95,446 95,504 1.03% Washington 155 126 116,793 116,919 0.13% West Virginia 10 7 67,132 67,139 0.01% Wisconsin 122 32 67,457 67,489 0.18% Wyoming 7 4 46,320 46,324 0.02% Residential Commercial All Sectors’ Industrial State54 Electricity Electricity Electricity Electricity Prices Prices Prices Prices Alabama 12.26 11.29 6.07 9.70 Alaska 22.06 19.01 17.28 19.64 Arizona 12.84 10.74 6.60 10.95 Arkansas 9.78 7.67 5.45 7.69 California 18.90 16.46 13.35 16.70 Colorado 12.14 10.11 7.25 9.99 Connecticut 21.20 16.81 13.89 18.46 Delaware 12.62 9.71 7.72 10.61 DC 12.84 11.97 8.29 12.03 Florida 11.61 9.35 7.76 10.43 Georgia 11.39 9.65 5.83 9.52 Hawaii 32.48 30.00 26.11 29.22 Idaho 10.20 7.93 6.49 8.20 Illinois 12.55 8.95 6.65 9.46 Indiana 12.02 10.36 7.16 9.60 Iowa 12.67 9.80 6.58 9.14
54 Data on states’ electricity prices comes from EIA’s Electric Power Monthly, with this data representing the year of 2018 and available in the February 2019 version of the Electric Power Monthly. All prices here are listed in cents per kilowatt-hour.
38 Kansas 13.13 10.43 7.46 10.57 Kentucky 10.45 9.56 5.52 8.44 Louisiana 9.32 8.73 5.29 7.65 Maine 16.12 12.35 9.06 13.07 Maryland 13.33 10.43 8.23 11.58 Massachusetts 21.57 16.78 14.51 18.30 Michigan 15.56 11.17 7.28 11.53 Minnesota 13.38 10.45 7.77 10.59 Mississippi 11.25 10.51 6.11 9.32 Missouri 11.10 9.22 6.96 9.76 Montana 11.18 10.17 5.26 9.00 Nebraska 10.80 8.93 7.54 9.09 Nevada 11.86 7.85 6.08 8.71 New Hampshire 19.64 15.79 13.08 16.93 New Jersey 15.47 12.21 10.11 13.28 New Mexico 12.75 10.16 5.72 9.43 New York 18.53 14.50 6.04 14.88 North Carolina 11.27 8.69 6.23 9.36 North Dakota 10.35 9.09 8.46 9.14 Ohio 12.35 9.93 6.70 9.78 Oklahoma 10.23 7.89 5.15 7.99 Oregon 10.92 8.91 6.20 9.05 Pennsylvania 13.93 8.93 6.78 10.11 Rhode Island 20.55 16.48 15.37 18.05 South Carolina 12.40 10.19 6.17 9.72 South Dakota 11.62 9.47 7.77 9.93 Tennessee 10.67 10.41 5.73 9.61 Texas 11.39 8.12 5.54 8.67 Utah 10.54 8.36 5.89 8.30 Vermont 17.98 15.19 10.55 15.09 Virginia 11.78 8.37 6.85 9.55 Washington 9.63 8.70 4.73 7.98 West Virginia 11.26 9.32 6.44 8.78 Wisconsin 14.44 10.92 7.66 10.91 Wyoming 11.36 9.63 6.71 8.11
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