This year has been a mixed bag for state-level energy policy.
Overall, solar deployment expanded dramatically. In some states, growth was aided by expansions to net energy metering (NEM) and other policies facilitating distributed energy resources (DER). In others, however, those policies came under attack. South Carolina, for instance, became the latest state to set a renewable energy target, while Ohio became the first state to put a freeze on its progress toward its target.
California saw lots of activity this year on DER, with policymakers establishing an enormous energy storage procurement program and the phase-out of its highly successful solar initiative. California still leads in clean energy on many fronts, but today, there are lots of other markets to keep track of -- some of which have been friendlier to renewables and other advanced energy technologies than others. Here are some of the highlights.
It was an unsavory year for clean energy advocates in the land of cheeseheads and bratwursts, with major changes approved to utilities’ rate structures that decrease financial benefits for energy efficiency and rooftop solar.
The Wisconsin Public Service Commission approved an 83 percent increase in monthly fixed charges for Wisconsin Public Service Corp. customers, from $10.40 to $19. It also approved a hike in Madison Gas & Electric’s fixed charges, from $10.50 to $19, as well as a proposal from We Energies to increase fixed charges from $9 to $16.
The Commission also passed changes in NEM for We Energies (or WEPCO) customers. The program will switch from annual netting to monthly netting, and the price credited for excess generation will drop from the current 14 cents per kilowatt-hour to 3 cents per kilowatt-hour. In addition, residential solar customers will have to pay We Energies a fixed fee of $3.80 per kilowatt each month.
“It’s about one thing: it’s about utilities, monopolists trying to stop competition,” said Bryan Miller, co-chair of The Alliance for Solar Choice. “Instead of innovating, they’re trying to manipulate the regulatory process to quash rooftop solar, because it’s the most competition they’ve ever faced.”
Figure 1: Rate Structures in Wisconsin
Arizona was the focal point of NEM debates last year. This year, there have been attempts to review NEM policies in California and Minnesota. Also, Ohio's NEM policy was challenged in court, new legislation was introduced in Arkansas that could water down the state’s NEM policy, and, earlier this month, the Public Service Company of New Mexico proposed charging solar customers a monthly fee starting in January 2016.
In Florida, state regulators approved proposals to slash the state’s energy efficiency goals by more than 90 percent and to cease solar rebate programs by the end of 2015. The Public Service Commission’s 3-2 vote caters heavily to investor-owned utilities Duke Energy Florida, Tampa Electric and Florida Power & Light. Groups on both sides of the political spectrum opposed the action.
“We support the use of all forms of energy including our current sources, which is why it is so disheartening to see a further attempt to stamp out [consumer] choice...in the Sunshine State,” said Tory Perfetti, head of Conservatives for Energy Freedom in Florida, a group created in partnership with Tea Party activist Debbie Dooley.
“Competition and the creation of new industry in business is one of the most American practices that should be adhered to when talking about how we power our homes and places of work,” he added.
The renewable energy sector was also dealt a blow in Ohio, where Gov. John Kasich (R) signed a bill in June to freeze the state’s renewable energy standards. The law, passed in 2008, mandated Ohio to get 12.5 percent of its energy from renewables and to reduce energy consumption by 22 percent by 2025.
According to the Environmental Defense Fund, the legislation created 25,000 jobs in the renewable energy industry and saved Ohio customers $1 billion on their electricity bills.
Activists are preparing for a fight in Kansas, where newly elected Republicans may have enough momentum to end the state’s renewable portfolio standard in the next legislative session. The 2009 law set a target to get 20 percent of the state’s power from renewable sources by 2020.
New York embarked this year on what is being lauded as the largest electricity market transformation in the country. Reforming the Energy Vision is intended to fundamentally change utility regulation to support a more distributed, consumer-oriented energy system.
The 81-page report on the initiative released this fall included five key elements, including the creation of distribution system platforms and the development of web-based tools that allow customers to shop for DER and other energy products.
In other news, the New York Public Service Commission agreed on December 15 to double the net metering cap from 3 percent to 6 percent of the utility's 2005 peak demand. The change is a boon for the solar market, which has created roughly 5,000 jobs in New York.
In June, South Carolina became the 44th state in the nation to adopt net metering legislation. South Carolina bill SB 1189 established new cost recovery and net metering provisions to support DER, which will help meet the state’s new 2 percent by 2021 renewable energy target.
The solar industry, environmentalists and state utilities Duke Energy and South Carolina Electric & Gas agreed to a plan earlier this month that keeps net metering incentives in place through 2020. Over that time, utilities pledged not to seek any specific fees on solar projects. The agreement will give South Carolina’s nascent solar industry an opportunity to grow.
There were several other noteworthy net metering expansions this year in the form of cap increases and eligibility clarifications, including in Massachusetts, New Hampshire, Rhode Island and Vermont. Cleantech advocates also fended off several attacks on net metering this year, including in Utah, Louisiana, Mississippi, Idaho, Oklahoma and Nevada.
Figure 2: NEM Policies by State 2014
Last year, Tea Party members and environmentalists came together in Georgia to force the state’s utility, Georgia Power, to competitively procure more solar power. This year, results of the auction came with the average utility-scale solar bid through Georgia Power’s solicitation at 6.5 cents per kilowatt-hour, which is 2 cents cheaper than in 2013.
According to the Green Tea Coalition, the Georgia solar industry now employs more than 2,200 people.
The solar industry in Hawaii is suffering as a result of its success. With some circuits reaching unstable levels, Hawaiian Electric Company (HECO) initiated a strict approval process for solar systems connected to the grid. The number of permits issues dropped by 50 percent, and around 3,000 jobs moved out of Hawaii’s solar sector.
But it’s not all bad news. State regulators and Hawaiian utilities are also putting together comprehensive plans to support the adoption of more distributed energy. HECO released a new plan in August, which, if approved next year, could triple solar installations by 2030, according to the utility.
So, while the present looks rocky, the future for clean energy in Hawaii looks good.