The popularity of solar is causing solar developers in several states to run up against their net metering caps, which solar advocates say is hindering project deployment and could be a major setback to the industry overall.
Net metering caps are limits that policymakers have set for the amount of distributed solar utilities must compensate by purchasing the excess electricity they produce. Several state legislatures and regulatory bodies are now examining options to lift the cap or completely reform their net metering policies.
A recent study by the N.C. Clean Energy Technology Center found that more than half of U.S. states were either studying or changing their net-metering policies in the third quarter of this year.
More state news updates on net metering and other clean energy issues are provided below. Click a region to jump to news from the Northeast, West, Midwest or South. You can find our previous state bulletin here.
Massachusetts
After six months of debate, lawmakers in Massachusetts failed to increase the state's net metering cap for commercial solar projects this week before the winter recess, which could put dozens of large installations in jeopardy next year.
The solar industry has already reached its cap in National Grid's service territory, and will soon hit its limit throughout the rest of the state. Solar developers were critical of House legislation (H3854) that would increase the limit by only 2 percent and lower net-metering compensation to the wholesale rate, among other things. The senate submitted an amendment that was more favorable to solar, but the compromise bill failed to pass before time ran out. A committee of negotiators will now try to find a solution before lawmakers return in the new year.
"Residential solar will be fine in Massachusetts and will continue to grow like gangbusters since it's not subject to the net metering cap. But commercial solar -- and in particular, community solar development -- could miss out on over 100 megawatts of additional development in 2016," said Cory Honeyman, GTM Research's senior analyst for solar markets.
According to GTM Research, non-residential solar installations in Massachusetts dropped from 46.6 megawatts in the first quarter of 2015 down to 26.6 megawatts in the second quarter, largely because of permitting challenges and the uncertainty around net metering.
Vermont
Green Mountain Power announced last week that it had reached its 112-megawatt net metering cap for solar power. The cap is defined as 15 percent of a utility’s peak load. Green Mountain Power is now asking regulators to buy an additional 7.5 megawatts of net-metered solar power for small, non-commercial installations, VT Digger reports.
Since the cap does not apply to residential projects under 15 kilowatts, the extension would be targeted for community solar projects for businesses and homes that cannot put solar on their property. A spokesperson for the Vermont Public Service Department said the community solar proposal will not be approved right away, since it requires a full regulatory proceeding. Meanwhile, as other utilities approach their net metering caps, the Vermont Public Service Board is working on a new net metering rules that would go into effect in 2017.
The Public Service Department is also working on an update of the Vermont Comprehensive Energy Plan and the Vermont Electric Plan that will be completed by the end of the year. Both plans must be adopted by January 1, 2016. The plan was last updated in 2011.
New Hampshire
Like Massachusetts, New Hampshire is also closing in on its net metering cap. Liberty Utilities and New Hampshire Electric Cooperative have already met their allotment of the state’s 50-megawatt cap, and Eversource is expected to reach its cap in the coming months. The solar advocacy group Tell Utilities Solar Must Not Be Killed has been actively campaigning for a cap increase. Several pieces of legislation addressing net metering have been prefiled in New Hampshire for the legislature to take up when the new session begins in 2016.
Maine
Maine continues to work through a proceeding (2015-00218) to develop a distributed solar policy proposal for the state. The process is informed by a white paper submitted by the Office of the Public Advocate that proposes distributed solar customers enter into long-term fixed contracts with a “Solar Standard Buyer.” Compensation would be based on a previously established value of solar analysis capped at 20 cents per kilowatt-hour that would decline over time.
The fifth working-group meeting on the proceeding was held on November 16. A sixth meeting is scheduled for December 8. A final proposal to the legislature is due by January 30, 2016.
New England
Connecticut, Massachusetts and Rhode Island have issued their final Regional Clean Energy RFP, which seeks offers for clean energy and transmission projects to advance the three states’ clean energy goals. By working together, officials expect to build bigger, more cost-effective projects.
Eversource Energy is angling to build a $1.6 billion power line project that would bring hydropower from Canada to southern New England. Rival power line companies and other power plant owners are expected to bid as well. A bidder’s conference will be held December 3; questions are due December 29; and proposals are due January 28, 2015.
Separately, a new study found that New England does not need additional natural-gas pipeline infrastructure to meet peak winter demand, Mass Live reports. The highly anticipated study, conducted by the Analysis Group, determined that energy efficiency and demand response would be a better solution over the next 15 years.
"This study demonstrates that we do not need increased gas capacity to meet electric reliability needs, and that electric ratepayers shouldn't foot the bill for additional pipelines,” said Massachusetts Attorney General Maura Healey, who commissioned the study in July.
New Jersey
A new bill (A 4762) has been introduced in New Jersey that would establish a "Neighborhood Solar Energy Investment Program." The program is designed to allow residential and non-residential customers to invest in off-site solar energy projects and receive credits based on their share of generation from the system on their electricity bills.
New York
Earlier this month, Entergy Corporation announced plans to shut down the 838-megawatt James A. FitzPatrick Nuclear Power Plant in Scriba, New York. Entergy said the plant is no longer competitive with low wholesale market prices driven by cheap natural gas. Residents in upstate New York are shaken by the decision since the FitzPatrick plant employs more than 600 people, the New York Times reports. Governor Cuomo has said he will fight to keep the plant open.
The New York PSC held three weeks of informational sessions on the Reforming the Energy Vision proceeding that came to a close on November 19. The public will now have a chance to comment on REV and New York's energy future. On December 16, 2015, the PSC will hold a technical conference specifically on access to customer and aggregated energy data.
On November 9, PSC staff filed Proposed Revisions to the state's standard interconnection requirements. Comments on the proposed revisions are due January 11, 2016. Among other things, the changes would increase the system-size limit from 2 megawatts to 5 megawatts.
WEST
California
This month the Obama administration published the first phase of a comprehensive land management plan that designates which federal and state lands in a 22.5-million-acre area of the California desert will be available for renewable energy development and which portions will be preserved. Phase one of the Desert Renewable Energy Conservation Plan (DRECP) provides a blueprint for the management of 10 million acres of federally owned public lands from Death Valley to San Diego County. Phase two will consider another 12 million acres of non-federal land.
On November 16, the CPUC issued a Proposed Decision accepting the 2015 RPS procurement plans for California’s three investor-owned utilities. Notably, only Southern California Electric will hold an RPS solicitation during 2015. Among other things, the decision puts off a variety of issues related to California’s new climate law (SB 350) to consideration in 2016. The comment deadline is December 6.
Meanwhile, debate continues over NEM 2.0, a successor to California’s net metering tariff (R1407002). Earlier this month, TechNet, the Silicon Valley Leadership Group, the Los Angeles Business Council and several other business sent letters to the CPUC declaring their support for keeping net metering at the current retail rate. California’s three investor-owned utilities have proposed reducing net metering compensation and adding fees on solar customers. The CPUC will determine the fate of net metering in California by December 31, 2015.
California regulators are also working to reform how investor-owned utilities administer energy-efficiency policies. In late October, the PUC updated several obscure regulations that were hindering efficiency programs and issued a directive to accelerate high-opportunity pilot projects in 2016. Comments on a Commission white paper regarding these pilot projects are due November 20, 2015, and a ruling is expected on December 31, 2015.
Oregon
Earlier this month, the Oregon PUC completed an investigation into the design of a community solar program, as required by House Bill 2941. Recommendations include instituting a cap of 0.5 percent of peak load for each utility, capacity cap of 2 megawatts for any individual project, and a bill credit (virtual net metering) that equals the value of solar as determined by the PUC. Recommendations are now under review by energy and business committees at the Legislative Assembly.
Nevada
The Nevada PUC held several technical meetings this week to discuss the future of the state’s net metering policy. In August, the PUC voted to extend the state’s net metering policy through the end of the year, with news the NV Energy had hit its 235-megawatt net metering cap earlier than expected.
The PUC is now required to decide on a permanent net-metering structure by December 31, which has sparked a heated debate. One recent poll found that two-thirds of Nevadans support the current net metering policy, the Review-Journal reports.
Colorado
Xcel Energy is seeking to test battery storage for solar power at two sites in the Denver area -- a 2-megawatt-hour battery system at the planned Panasonic Solar-Battery Microgrid and up to six storage systems to support 330 residential solar customers in the Stapleton neighborhood. The projects are expected to cost Xcel $10.7 million, with an additional $3.6 million coming from partners. The Colorado Public Utility Commission is currently considering the proposal (15A-0847E). Xcel has asked regulators to set a procedural schedule by February 2016.
Hawaii
On November 30, regulators in Hawaii will hold an evidentiary hearing on the proposed $4.3 billion merger between NextEra Energy and Hawaiian Electric Co. Earlier this month, the two utilities said they do not want their two executives to take part in the hearing, despite recommendations that they attend, Pacific Business News reports.
The utilities have also filed a request with the PUC to exclude interveners advocating to create a municipal co-op as an alternative to the merger, the Hawaii Tribune-Herald reports. The Hawaii Island Electric Cooperative, formed by local business and community leaders, filed a response that it had not submitted testimony or evidence outside the scope of the case, and that it was premature to consider municipal ownership. At the same time, co-op advocates said the filing indicates that NextEra sees them as a serious challenge.
MIDWEST
Minnesota
Minnesota Power has proposed a new rate plan that would make large industrial customers eligible for a 5 percent rate reduction, to be paid for by non-industrial customers. The changes are made possible by legislation enacted in 2015 that allows Minnesota Power to offer discounted rates to a limited number of its Energy-Intensive Trade-Exposed (EITE) customers, primarily taconite plants and paper mills.
Under the plan, non-EITE businesses would see a new flat monthly charge of $11.45. Residential customers would see an increase based on energy use, which is expected to add approximately 14.5 percent to their monthly bill. The proposal is subject to PUC approval.
“We recognize no one wants to see their bill increase,” Dave McMillan, Minnesota Power executive vice president, said in a statement. "However, our plan will not only help the region’s largest industries compete and remain in the economy, it will bring rates closer in line to the actual cost of providing power to all customer groups.”
On November 6, the Minnesota Department of Commerce announced new incentive amounts for Made in Minnesota solar panels in 2016 -- the third year of the 10-year, $15-million-a-year Made in Minnesota Solar Incentive Program. Modules from four Minnesota companies -- tenKsolar, Silicon Energy, Heliene and Itek Energy -- have been certified for the program to date. Amounts vary by manufacturer and are payable over 10 years. The amounts for 2016 are as follows:
• Commercial for-profit systems <40 kilowatts: $0.13 per kilowatt-hour to $0.23 per kilowatt-hour
• Tax-exempt/nonprofit/government systems <40 kilowatts: $0.15 per kilowatt-hour to $0.25 per kilowatt-hour
• Residential systems <10 kilowatts: $0.23 per kilowatt-hour to $0.30 per kilowatt-hour
Wisconsin
The Wisconsin Public Service Commission is considering a proposal this week from Wisconsin Public Service Corp (6690-UR-124) that seeks to raise fixed monthly charges on residential customers 32 percent from $19 to $25, the Milwaukee Journal-Sentinel reports. The request comes on the heels of an 83 percent fee increase, from roughly $10 to $19 per month, that was approved last year. The utility contends the raise is needed to cover system and infrastructure maintenance costs. PSC staff and environmental groups have argued for a study on the effects of last year’s rate increase before making another one.
Wisconsin has approved some of the highest fixed-charge increases in the country. In addition to Wisconsin Public Service Corp., the PSC voted last year to increase Madison Gas & Electric Co.’s monthly fixed charges by 85 percent from roughly $10 to $19, and to increase We Energies’ fixed charges by 75 percent from $9 to $16 a month. We Energies also instituted a $3.79 per kilowatt monthly demand charge on PV customers that a Dane County Circuit Court struck down in late October.
Michigan
Earlier this month, democratic lawmakers in Michigan successfully added energy-efficiency and renewable-energy goals to a package of energy bills passed out of the House Energy Policy Committee. One piece of legislation (HB 4297) would create the goal -- not a mandate -- for Michigan to get 30 percent of its electricity from renewable resources and energy savings by 2025. Michigan currently has a mandate to get 10 percent of its electricity from renewables by the end of 2015, which the state is poised to meet.
The plan has support from utilities and Governor Snyder, while clean-energy advocates argue the legislation should go much further. Critics have complained that as a goal, the target is weak. Also, because it’s a combined target for renewable energy and efficiency, environmental groups calculated that the goal would only result in a 5 percent increase in renewable energy generation, MLive reports.
Missouri
The Missouri Public Utility Commission has been exploring the creation of a revenue decoupling mechanism for potentially all electric, natural gas, water and sewer utilities under proceeding AW-2015-0282. On November 2, staff recommended that the Commission close the docket and investigate any proposed decoupling mechanism on a case-by-case basis during a general rate case, due to the wide variations between different industries and utilities.
Iowa
Iowa’s Utilities Board is holding a comprehensive proceeding on distributed generation, including net metering and interconnection issues (NOI-2014-0001). The board opened a workshop on interconnection rules in September, with comments due November 6 and reply comments due December 1. Iowa Power & Light and MidAmerican are required to file preliminary implementation plans for pilot projects that will expand renewable DG in the state by the end of January 2016.
SOUTH
North Carolina
In June, the advocacy group NC Warn built a 5.2-kilowatt solar project on the roof of Faith Community Church in Greensboro with a 3-year PPA at roughly half the cost of retail electricity. NC Warn also initiated a regulatory proceeding (SP-100 Sub 31) that argues such third-party sales are not prohibited by state law.
North Carolina is one of four states where third-party groups are restricted from selling electricity, but the law doesn’t explicitly ban third-party sales. A bill that would enable third-party financing has been introduced in North Carolina’s general assembly, but progress has stalled.
“Third-party financing is an open question in North Carolina,” said NC Warn community organizer Ravin St. Julien-Brown, in a statement. “Hopefully, the General Assembly will clarify it before the regulators do. Third-party solar could be helping all electricity customers avoid rate hikes for more power plants -- if companies offering third-party sales are allowed to compete in this state.”
The Greensboro solar project has provoked a strong response from Duke Energy and Duke Energy Progress, which maintain that third-party sales are illegal. On October 30, 2015, the two utilities issued comments calling on regulators to penalize NC Warn up to $1,000 for every day since the solar project came on-line.
“What NC Warn is doing is similar to driving a car on the highway and saying the rules of the road apply only to others,” Duke spokesperson Randy Wheeless wrote in a recent op-ed. He also noted that Duke Energy is in the middle of a $500 million solar expansion in the state, with four major solar facilities under construction.
Comments on the proceeding were due at the end of October. Reply comments are due November 20.
South Carolina
On November 4, the South Carolina PSC issued separate orders approving Duke Energy Carolina’s and Duke Energy Progress’ solar rebate and shared solar tariffs. Rebates will be offered for systems of 1 megawatt or less, with the initial rebate levels set at $1 per watt. The rebates will decline as certain capacity benchmarks are reached in each tranche of each utility program.
The Duke Energy Carolinas community shared solar tariff allows customers to subscribe to capacity from a community solar facility at a rate of $6.00 per-kilowatt, per-month, with an energy credit of roughly 6 cents kilowatt-hour based on their prorated share of the facility's output, for up to 10 years. The Duke Energy Progress allows customers to subscribe at a rate of $6.25 per kilowatt per month, with an energy credit of roughly 6.3 cents per kilowatt-hour for up to 10 years. Both utility programs have an initial subscription fee of $50 per kilowatt for residential customers and $100 per kilowatt for non-residential customers.
Tennessee
The Tennessee Valley Authority has initiated a new stakeholder process, the Distribution Generation-Information Exchange (DG-IX), on the heels of its Distributed Generation-Integrated Value report, which was issued in October 2015. The DG-IX is intended to consider program design and possible changes to TVA’s incentive programs.
According to the Southern Alliance for Clean Energy, TVA has indicated that it plans to reduce payments for its solar programs in 2016. Incentives for owners of rooftop PV systems under 50 kilowatts through the Green Power Providers program would drop to the retail rate in 2016, and the program cap of the Solar Solutions Initiative (for larger systems between 50 kilowatts and 1 megawatt) would drop from 20 megawatts to 10 megawatts.
The report published last month concluded that the value of solar generation for TVA is 7.2 cents per kilowatt-hour, which is lower than the utility’s current incentive program, which pays about 12 cents per kilowatt-hour. Environmental groups have complained that TVA failed to consider impacts on pollution, carbon and water use in attempting to define the value of solar.
Maryland
Baltimore Gas & Electric has filed a new rate case -- its second in 16 months, and its fifth since 2010 -- seeking authority to raise its electric distribution rates by $135.2 million. The primary motivation for BGE’s filing (which also includes a request to raise its gas distribution base rates) is the completion of a five-year smart-grid initiative to upgrade more than 1.7 million electric and gas meters in its service territory.
The proposed tariff revision includes raising the monthly customer charge for residential service from $7.50 to $12.00, while raising the kilowatt-hour delivery service charge by approximately 20 percent. Overall, the proposal would add roughly $15 a month to a typical BGE customer’s bill for both gas and electric services. The Maryland PSC must approve the changes.
Washington, D.C.
On October 28, 2015, the D.C. PSC voted to reopen the Exelon-Pepco merger case to consider a settlement agreement reached in partnership with the D.C. mayor's office. Last month, D.C. Public Power, a newly formed nonprofit, filed a notice to regulators expressing its intent to buy Pepco’s Washington, D.C.-based assets as an alternative to Exelon’s proposed merger.
D.C. Public Power has requested a hearing on the proposal, with a decision expected by the commission any day. Public interest hearings on the merger case (FC 1119) will be held from December 2-4, 2015. Initial briefs on the proposed settlement are due by December 11, with reply briefs due by December 18, with a decision expected in the first quarter of 2016.
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Policy developments are tracked in partnership with EQ Research, which offers in-depth subscription services covering regulatory developments, legislation and general rate cases in all 50 U.S. states.
