State solar policy increasingly moving away from traditional net metering

The N.C. Clean Energy Technology Center (NCCETC) released its 2024 annual review and Q4 update edition of The 50 States of Solar.

The quarterly series tracks state regulatory and legislative discussions and actions on distributed solar policy.

The Q4 report finds that 47 states, plus the District of Columbia and Puerto Rico, took some type of distributed solar policy action during 2024. The greatest number of actions were related to net metering policies, residential fixed charge increases and community solar. From these policy actions, the authors noted the top ten most active states along with trends in policy making.

“Following a period of relatively little activity, 2024 saw the reemergence of requests for large fixed charge increases,” noted Brian Lips, senior project manager at NCCETC. “Starting with California, where the Commission approved income-graduated fixed charges, multiple utilities requested increases of 100% or more.”

Top solar policy trends 2024

New states continue to move beyond traditional net metering
Distributed solar programs integrate provisions for multifamily buildings
Utilities request approval for large fixed charge increases
Formal studies inform net metering successor tariff design
Community solar program updates dedicated to low-income participation
States and utilities reach net metering successor triggers
Stakeholders oppose previously approved distributed generation charges
States consider federal funding in distributed solar program design
Energy storage incorporated into distributed solar (Re)designs
Utilities differentiate residential rates based on customer type

Ten most active states in 2024

The report notes that nearly every state in the country took some type of action on distributed solar policy or rate design during 2024, some states were more active and took what could be impactful policy steps. That states that took no action are shown in the map below.

Virginia

Appalachian Power filed a net metering successor program that uses hourly netting and crediting exports at the avoided cost, while Virginia lawmakers expanded solar leasing to allow third parties to own, maintain and operate net metered solar installations. Lawmakers also expanded Dominion Energy’s shared solar program, increasing the program cap by 50 MW and adding an additional 150 MW under a potential second phase. Lawmakers also directed Appalachian Power to create a similar 50 MW program.

West Virginia

The Public Service Commission (PSC) approved Monongahela Power and Potomac Edison’s net metering successor tariffs, which shift to instantaneous netting and set the compensation for excess generation at the wholesale power cost. Existing customers would be grandfathered into the original program. Appalachian Power and Wheeling Power filed a similar successor tariff later in the year, with exports credited at the avoided cost, based on customer voltage.

Washington

Washington lawmakers ordered the Department of Commerce and the State Academy of Sciences to investigate the value of distributed solar and recommend options for for when the net metering threshold is met. The Utilities and Transportation Commission approved various revisions to net metering tariffs, including extending Puget Sound Energy’s net metering tariff to new customers through the end of 2025, even if the program cap is reached.

California

The Governor of California vetoed a bill that would have replaced the buy-all/sell-all mechanism for multi-tenant buildings and public schools with 15-minute interval net billing. The Public Utilities Commission (PUC) approved an income-based graduated fixed charge framework for residential customers. The Commission also adopted a new Community Renewable Energy Program and expanded the existing Disadvantaged Community Green Tariff Program by 84 MW.

Connecticut

Regulators in Connecticut made changes to the state’s net metering and community solar programs, including integrating multifamily buildings into the Residential Renewable Energy Solutions Program and public schools into the Non-Residential Program. Lawmakers enacted legislation extending the Shared Clean Energy Facilities (SCEF) Program an additional two years and requiring a study on successors to the Renewable Energy Solutions and SCEF programs.

New Jersey

The Board of Public Utilities began considering amendments to the Community Solar Energy Program, including changes to site eligibility, treatment of unallocated capacity, colocation and municipal participation. The Board approved changes to the Remote Net Metering Program, in compliance with a 2023 bill, including increasing the system size limit, allowing colocation and municipal utility participation, and clarifying participation in associated incentive programs. The Board also initiated a stakeholder process to develop a net metering successor tariff.

Colorado

Lawmakers in the Rocky Mountain State completely overhauled its Community Solar Garden program, dedicating the new iteration to inclusive community solar development. The Public Utilities Commission also implemented a 2023 bill that created a new fixed credit option for community solar subscribers: customers would receive the same credit rate for each year of their participation, unlike the standard credit option where utilities change the credit rate each year.

Arizona

Staff at the Corporation Commission recommended that the state continue its Resource Comparison Proxy rate compensation for DG customers as-is, after commissioners opened an investigation last year. The Commission issued a decision sunsetting Arizona Public Service’s utility-owned rooftop program and approving a new per-kW charge for residential solar customers. Parties also petitioned the Federal Energy Regulatory Commission that Salt River Project’s net metering program violates PURPA by discriminating against rooftop solar customers.

Alaska

Alaska lawmakers directed the Regulatory Commission and utilities to develop community energy programs that would allow for utility or third party ownership, require prevailing wages, and prevent participation in both net metering and community energy. The Commission also opened a proceeding to consider increasing the aggregate cap for net metering from 1.5% to 20% of a utility’s average retail demand.

Maryland

The PSC initiated a rulemaking to consider how to revise time-of-use rates to accommodate net-metered customers, in response to work group recommendations. The Commission also implemented a permanent community solar program, as required by a 2023 bill. Facilities can begin to apply for interconnection under the permanent program rules starting January 1, 2025, though formal regulatory approval is not expected until later in Q1 2025.

“During 2024, we continued to see states move away from traditional net metering and toward alternative compensation structures, like net billing, for distributed generation,” noted Autumn Proudlove, the managing director of policy and markets at NCCETC. “The focus of these changes has been on netting intervals and export credit rates, while additional fees like demand charges and grid access charges, are generally not being included in these tariff designs.”

Other important policy developments include: Appalachian Power and Wheeling Power as well as Kentucky PUC proposing a net metering successor tariffs; New Hampshire regulator extended net metering through 2040, although state energy leaders say that with only 15 years of certainty, it will create challenges to financing new development; and Arizona Corporation Commission upheld Arizona Public Service grid access charge.

Details and updates on these and other federal, state, and local government policies and incentives are available in the N.C. Clean Energy Technology Center’s Database of State Incentives for Renewables and Efficiency.

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