energy Program

State Policies for Distributed Renewable Energy

To support a world-class solar market, states should adopt a renewable energy policy based on four key components: 

• Net metering policies should be as all inclusive as possible to allow all potential customer-generators to spin their meter backwards with a system that is appropriate for their energy needs. 

• Interconnection procedures should outline how, when and what engineering aspects should be considered in order for you to plug a clean energy system into the grid. 

• Utility rates should work in tandem with net metering as they represent the potential savings, on a dollar per kilowatt hour level, from generating energy onsite.

• Financial incentives, like rebates and tax credits, are the engine of market development.

As important as it is to drive a market with strong incentives, interconnection and net metering policies help to provide a smooth road for development. In the current landscape, it is much easier for a market to accelerate on the smooth, finished roads of states like Colorado, New Jersey and California where they have adopted best practices in net metering and interconnection.

There are three additional policy recommendations that states should consider to boost the market for renewable energy even higher. First, states can establish statewide standards for renewable energy equipment which would simplify local permitting. States should also provide training and education to familiarize local building and electrical inspectors with such equipment.  Such statewide programs would help create consistent permitting requirements across jurisdictions.

Second, states can pass legislation that requires local governments to develop efficient permitting processes and reasonable review criteria for distributed renewable energy systems.  This approach has been used with some success in both California and Wisconsin, among other states.  

Third, states can pass laws banning private restrictions that prohibit or restrict solar and other distributed renewable energy systems on aesthetic grounds.  Several states have passed such laws already with limited success.  Therefore, states should also educate community associations about their obligations under the law and inform homeowners about their right to install distributed renewable systems with the proper government permits.

These three suggestions require only minor policy changes that could be implemented quickly by state and/or local officials.  These slight changes could have a profound impact on the ability to safely and rapidly expand the use of onsite, renewable energy systems and may even help jump-start a robust domestic renewable energy market which benefits all Americans.

Model Rules for Net Metering and Connecting to the Grid

Applying the lessons from existing statewide net metering programs and interconnection procedures, the Interstate Renewable Energy Council (IREC) has drafted model interconnection procedures and net metering rules for use by state utility commissions and other stakeholders. As states consider adopting or revising programs, these models provide an easy way to emulate effective policies and avoid wasteful mistakes.

Critically, these models are a result of negotiated compromises (between utilities, regulators and other stakeholders) and agreed-upon best practices--those proven to safeguard the grid and other ratepayers, while permitting distributed generation to flourish. To renegotiate the provisions within these models would reinvent the wheel and consume time and resources.

Ideally, a uniform national renewable energy policy would stem from federal leadership. The current discrepancy in the design and implementation of several dozen vastly different state programs has created an uneven playing field for renewable energy service providers and utilities alike, and is preventing distributed renewable energy technologies from reaching economies of scale. Uniform federal interconnection and net metering standards could create a level playing field and provide greater regulatory predictability than the existing patchwork of state policies.

IREC's Connecting to the Grid Guide provides a comprehensive introduction to net metering and interconnection policies and technical issues.  The sixth and most recent edition of this guide includes information on IREC's updated model interconnection procedures, alternative billing arrangements for net metering, energy storage issues and several other emerging issues in the field. 

Without much leadership at the federal level, states have a big role to play in pushing renewable energy policy. Net metering, interconnection, rate design and incentives can help drive the market on a smooth road. Harmonizing local rules and regulations will alleviate a lot of headaches across jurisdictions. The best practices have already been established and are easily accessible thanks to great resources like IREC. The clean energy market is ready to go, the only thing holding it back is the status quo.