SEIA’s watchful eye on the state of the states

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The Investment Tax Credit has driven the solar market in the US. But the energy industry is mostly regulated at the state level; as a result some states are doing better than others.

In California, look no further than the 33% Renewable Portfolio Standard by 2020 that helped add a further 408MW of solar, the state's strongest quarter on record.

But the United States is a land of extreme contradiction, not least in the energy industry. Florida, the sunshine state, added a miniscule amount of solar in the last quarter (see slide), while New Jersey, devastated by superstorm Sandy and hit hard by a cold winter, had added 76MW, mostly commercial installations, before the snowstorms had even finished for the season.

GTM Research also recently reported that quarter-over-quarter growth for national residential installations masks weak installation figures from several major markets such as Massachusetts, New York and Arizona.

However, nothing moves markets more than policy, incentives and financing. Most schools in the US are now out, and so too are many of the state legislators. In Texas and Nevada legislators won't return until 2015. Hawaii, Arizona and Colorado are out of session until 2014. Massachusetts probably won't pick up again until next year, while California's hardworking state legislators continue to sweat in the Sacramento heat (41C/105F yesterday) until September.

So the Solar Energy Industries Association last week took the opportunity to take stock and give their summary of the state of the states, if you will.

Carrie Cullen Hitt, vice president for state affairs at SEIA, said: “Generally, across the board I think we can say we've had positive outcomes in our legislative sessions. We did have to play a lot of defence – there were a number of bills proposed in many states that would have chipped away at some progressive solar policy. While there was a lot of talk about retrenchment on renewable policies, we didn't actually see it come to fruition.

“In a few places we saw comprehensive policies, but not as many as we might have seen in past years. For example, in Minnesota and Connecticut, there were significant pieces of legislation passed. But generally speaking in most of the states we didn't see large comprehensive bills for clean energy policy or solar.”

Renewable portfolio standards, net energy metering programmes and tax benefits were under the most pressure state-by-state, in part thanks to the efforts of the American Legislative Exchange Council.

“In several states, bills that would have repealed or weakened renewable portfolio standards were introduced and for the most part those failed. [However] I would suggest that doesn't mean that conversation isn't over, it was more or less the first or second round and we can expect to see more of that in the future.

“We expect that trend to continue in the remaining part of this year and into 2014 as we see NEM caps get hit in states where there is significant solar penetration as well as in places where we see the utilities becoming increasingly concerned with net metering policy.”

In Arizona, the legislative session wrapped up in early June, having passed SB1313, an omnibus bill that made some positive changes to the 10% commercial solar tax credit, said Sara Birmingham, the SEIA’s director of western policy.

“We weren't able to increase the credit or overall budget and limit of the programme,” she said. “But we were able to establish some pre-certification and a carry forward process we think this will improve implementation of the programme.”

SB1313 was signed by Governor Jan Brewer, not exactly renowned for her support for solar subsidies, and will be effective in September.

In Colorado, SB252 doubles its Renenewable Energy Standard to 20% by 2020 and the Solar Rewards Programme narrowly avoided being stalled entirely after some deft negotiations between SEIA and the major utility, Xcel Energy.

“We had been noticing in the Xcel Solar Rewards Programme that the 2013 capacity was going to end sometime in the first quarter of this year,” said Cullen Hitt. “Sure enough, that did happen. So we have been working to introduce legislation to expand that and add additional capacity. There wouldn't have been more capacity available until the next compliance period and that probably would have been June-July 2014.

“After we were getting ready to introduce the legislation, Xcel Energy came to us and asked if we would sit down and negotiate and we were able to come to a joint settlement agreement.”

Xcel submitted that plan to the Colorado Public Utilities Commission asking for an additional 33.6% MW to the programme and the regulators approved the agreement on 13 June.

Legislators in Connecticut, home to Niagara Falls, surprised everyone by voting reforms to the RPS that allows for the inclusion of large hydro, something that is strictly off limits in most programmes designed to stimulate growth in renewable markets rather than siphon off power from existing assets.

But no one is surprised the changes at Long Island Power Authority precipitated by its response to Superstorm Sandy have increased uncertainty around New York's solar programme.

“We have been told by the administration that LIPA reform will not impact the solar programme and the FiT programme in New York,” she said. “We may see some delay in implementation of the next round of the FiT programme. SEIA has communicated to the administration that it's critical that the programme move forward – but we don't have a guarantee that's going to happen.”

In Texas, the struggle to get solar on the map continues, however. Neither HB3450 or SB1586 (both backed by SEIA) made it on to the books before the legislators left for their long break.

“Our experience in Texas has been, as it has been in the past, that bills associated with renewable energy solar in particular are difficult to advance at the legislature for a whole host of reasons,” said Cullen Hitt.

However, the state did pass one relevant statute – 313 – that creates some new opportunities for solar using an economic development plan.

“We're excited about that, mostly because if some solar companies take advantage of these economic development programmes it will help get some projects online and give visibility to solar and how it can work for people on the ground,” Cullen Hitt said. “At the end of the day, that helps facilitate additional conversations at the legislature and elsewhere, so we can continue to push pro-solar policies at the legislature.”

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