November 2009 Archives

Community solar continues to attract a lot of attention as a means to expand participation in distributed solar energy generation.

Massachusetts New Metering

In the past year, Massachusetts has implemented a statewide neighborhood net metering program approved in 2008 legislation.

• Under the final rules, all net metered systems, including neighborhood net metered systems, may over-generate relative to on-site load.
• Regular net metered customers may either rollover credits in perpetuity or allocate excess generation credits to other customers of the same distribution utility.
• Neighborhood net metered customers must have a minimum of ten residential customers identified for distribution of excess generation credits and all customers served must be within the same municipality, ISO-New England's load zone, and service territory of one distribution utility.
• Regular net metered system credits are based on a fully bundled retail rate, excluding customer charges and a public goods charge.
• Neighborhood net metered system credits are based on the fully bundled rate minus the distribution portion and also exclude the customer charge and public goods charge.
• Excess generation credits are allocated as a dollar amount and are based on the rate class for which a host customer takes service.

A number of states continue to discuss community net metering programs in various contexts including California, Colorado, New Jersey and Washington.

Given the potential promise community solar programs offer in expanding solar markets and the intersection of community solar policies with net metering, IREC anticipates being involved in these states as they move forward with implementation. As part of those efforts, IREC has begun development of a community net metering model designed to incorporate the best practices of net metering within the larger framework of community solar.

SOURCE:  IREC 2009 Annual Report

Solar Growth Trends

Regulation of Solar Services Agreements (SSAs) has emerged as an important issue in supporting solar growth.

Confusingly, Power Purchase Agreement "PPA" is often used in reference to SSAs, however, PPA has long been the term for an wholesale sales agreement between a generator and a utility, but a SSA is actually a retail sales agreement between a solar array owner and the utility customer hosting a solar array.

This arrangement has become the norm, as SSA providers are able to use the available federal tax credits and depreciation, and free the host from tying up capital and taking on the risks of ownership.

By overcoming a number of barriers to customer uptake of solar, SSAs have become the preferred means for the financing solar by commercial customers and the use of solar SSAs is beginning to be seen in residential markets.

Because the use of solar SSAs is so beneficial to the growth of solar markets, IREC has been actively involved in state proceedings addressing participation of solar SSA providers in net metering and regulation of solar SSA providers as public utilities.

State Policies for SSAs

Over the past year, IREC has participated in proceedings in Colorado, Nevada, Arizona, New Mexico, Massachusetts and Michigan that addressed the legal and policy issues surrounding regulation of solar SSAs. 

As part of Michigan's adoption of net metering rules, the Michigan PSC clarified the definition of customer-generator to ensure that SSA providers would be allowed to participate in net metering.

Likewise, Massachusetts clarified in its net metering regulations that net metered systems may be owned by third-parties.

IREC continues to be involved in Arizona and New Mexico's consideration of the matter and anticipates being active in Washington as well.

According to the IREC, many issues continue to emerge in net metering and interconnection as renewables increase the depth and scope of their penetration on the grid and across the states, including:

(1) regulation of solar services agreements;
(2) community solar proposals and meter aggregation;
(3) addressing issues surrounding the implementation of smart grid technologies and high penetration of PV on the grid; and,
(4) leveraging the opportunity electrification of transportation offers to renewable resources.

Some of these issues are increasingly familiar while others are just emerging. In 2010, IREC expects to continue to be engaged on each of these issues by working for greater solar energy growth.
 
SOURCE:  IREC 2009 Annual Report

The IREC declared that the most significant trend during the September 2008 - September 2009 period is a continued emphasis on solar energy in recent RPS adoptions and changes. Eleven states enacted or significantly modified standards; of those, seven states and DC included new provisions specific to solar energy.

In addition, five states made minor adjustments to their policies, of which two involved solar provisions.

• Missouri replaced (via ballot initiative) an existing renewables goal of 11% by 2020 with a standard of 15% by 2021, and included a provision mandating that at least 2% of the requirement come from solar energy (equivalent to 0.3% of retail sales in 2021).
• Illinois expanded its RPS to cover competitive sales and adopted a solar carve-out of 6% of the annual requirement from 2015 - 2025.
• And, in September 2009, California extended its RPS to 33% by 2020, via executive order.
• Both Oregon and Rhode Island adopted provisions relating to long-term contracts for solar energy resources, coupled with targets for solar that are outside the scope of each state's existing RPS.
  
• New Jersey approved long-awaited utility-administered solar renewable energy credit (SREC) contracting programs in connection with its existing solar carve-out.
  

SOURCE:  2009 IREC Annual Report