In our latest state policy round-up, we highlight the key changes relevant to solar energy in states around the U.S. that have occurred in the second half of 2019 (building upon our round-up for the first half of 2019 and our 2018 round-up).
The most exciting news (perhaps maybe even for the entire year) comes from New York! In one bill, New York committed to 100% carbon-free energy and set impressive targets for solar and wind development, renewable energy sources, emissions reduction, storage, and mandatory fund allocation for disadvantaged communities.
Three other states joined New York in committing to 100% carbon-free energy; Connecticut, Virginia, and Wisconsin all did so with an executive order. This brings the collective total of U.S. states and territories who have formally committed to 100% clean or renewable energy targets to 16!
California, Delaware, New Hampshire, and Oregon also passed solar-friendly bills, with wins for storage, tax and rebate incentives, and low- and moderate-income communities.
Not all developments were positive though. Louisiana rolled back net metering, and in one bill, Ohio reduced its renewable portfolio standards, abandoned its energy efficiency programs, and bailed out multiple coal and nuclear power plants.
These solar policy developments close out 2019, but we’re looking forward to what comes next in 2020.
In addition to California’s commitment to 100% clean energy and requiring all new homes to have rooftop solar starting January 1, 2020, the state also extended the prohibition of taxing energy generated by rooftop solar panels for another seven years with AB 1208.
Back in 2013, AB 792 clarified and provided tax certainty for Californians going solar through third-party power purchase agreements (PPA) or any other financial model. The bill specified that all site-generated electricity is exempt from local “utility user’s tax,” and it was set to expire at the end of this year.
Connecticut joins a growing list of states that have committed to 100% clean energy with Governor Ned Lamont’s Executive Order No. 3. Among other climate change matters, the order directs the Department of Energy and Environmental Protection to “analyze pathways and recommend strategies for achieving a 100% zero carbon target for the electric sector by 2040.”
Additionally, An Act Concerning a Green Economy and Environmental Protection (HB 5002) extends net metering for two years (halting the dismantling of net metering from the passage of SB 9 last year, which we covered last year, and absorbing a related bill—HB 7251), expands commercial and residential solar incentive programs, increases virtual net metering caps from $10M to $20M, and allows electric utilities to own energy storage and recover the cost from ratepayers.
In August, Delaware Governor John Carney signed HB 65 that amends Title 25 of the Delaware Code to bar unreasonable restrictions on residential property owners from installing rooftop solar, changes the 2/3 vote to a majority vote required to amend existing restrictions by homeowners associations (HOAs) or maintenance corporations, and provides legal funds for the prevailing party should litigation arise over HB 65’s language.
Louisiana rolled back net metering for new systems starting January 2020. In September, the Louisiana Public Service Commission made changes to net metering (R-33929) requiring rooftop solar customers to “buy-all, sell-all”—purchase all their electricity consumption at retail price, and be credited at the avoided cost rate for all electricity fed back to the grid. There is a 15-year grandfathering period for all systems connected before the end of this year to continue receiving the full retail rate.
The thin silver lining to R-33929 is the elimination of how many customers can participate in net metering.
Governor Chris Sununu signed into law the Low Moderate Income Community Net Energy Metering Act (SB 165) in July, requiring utilities to build at least two new community solar projects each year in low to moderate income communities with favorable net metering rates for residents starting January 2020. The bill also provides an additional incentive payment of 3 cents per kWh from July 1, 2019 through July 1, 2021, then drops to 2.5 cents per kWh.
On the storage front, local municipalities are now allowed to extend property tax breaks for solar storage systems with the passage of HB 464.
The New York Climate Leadership and Community Protection Act (SB 6599), also referred to as the CLCPA, is one of the most ambitious pieces of clean energy legislation passed in the U.S. Its major provisions include 100% carbon-free energy by 2040 (excluding new hydropower) with 70% from renewable energy sources by 2030, net zero emissions by 2025, ambitious offshore wind and solar energy development targets, as well as 3,000 MW of energy storage capacity installed by 2030.
The CLCPA creates two groups: the Climate Action Council and the Climate Justice Working Group. The Climate Action Council will be responsible for creating a scoping plan with recommendations to reduce emissions with consultation from various groups. The Climate Justice Working Group will define “disadvantaged communities” and be a representative voice for these communities to the Climate Action Council.
SB 6599 also mandates 35-40% of all state climate and clean energy spending funds (plus any future related initiatives) go to disadvantaged communities. The amount allocated to disadvantaged communities can increase over time as more funds are provided, i.e., this isn’t a one-time contribution.
The contentious HB 6 was signed by Governor Mike DeWine back in July. In one bill, Ohio guts its renewable portfolio standards (RPS), allows utilities to abandon its energy efficiency programs, and bails out two of FirstEnergy Solutions’ nuclear plants and two coal plants owned by Ohio Valley Electric Corporation through ratepayer surcharges.
HB 6 reduces Ohio’s current RPS from 12.5% by 2027 to 8.5% by 2026, then waives the standard after 2026. Instead of the existing goal of reducing customers’ energy use by 22% from 2008 levels by 2027 through energy efficiency programs, utilities are allowed to abandon those programs after achieving a 17.5% reduction. Roughly $1B will be paid out to FirstEnergy over a span of seven years from the $0.85 surcharge on utility customers’ bills, with an additional $2.50 monthly surcharge to be redirected to the Ohio Valley Electric Corporation.
In early August, Governor Kate Brown signed HB 2618 creating a new solar plus storage rebate program with a budget of $2M. The bill allocates at least 25% of the rebate budget for low- and moderate-income households and low-income service providers, along with a higher net cost coverage of up to 60%.
Virginia joins a growing list of states that have committed to 100% carbon-free or renewable energy with Executive Order 43. Governor Ralph Northam set a goal of 100% carbon-free by 2050, with a goal of producing 30% of its electricity from renewable sources by 2030. This is in addition to other efforts aimed to support Virginia’s clean energy transition, help climate change mitigation, and reduce the burden on low-income communities.
Wisconsin also committed to 100% carbon-free energy by 2050 through an executive order—#38. The newly created Office of Sustainability and Clean Energy will lead this effort. It will ensure that the state fulfills the 2015 Paris Climate Accord carbon reduction goals, develop a plan to help with climate change adaptation and mitigation, promote clean energy workforce training, and create various standards for existing and future state buildings.
Despite some setbacks for solar in Louisiana and Ohio, there were many positive state actions in the second half of 2019. In this round of policy updates, we see several more states join the commitment to transition to clean energy—a sign that states are recognizing the importance of the clean energy transition and how clean energy sources like solar benefit their residents, the economy, and the environment.
States have also included storage, friendly solar tax and/or rebate incentives, and low- and moderate-income communities in their legislation. Many of these commitments will help counteract changes like the step-down of the federal Investment Tax Credit starting in 2020.