For those of you sick of those year-end lists of best movies and music, here's a slight change of pace.
Solar research and advocacy group Solar Power Rocks released its 2017 ranking of the states most friendly to rooftop solar Friday, based on a compilation of state renewables policies and incentives. Massachusetts retained top honors, shaking off New York and New Jersey, which had split the gold three ways last year. Eleven states earned failing grades, with Oklahoma, Alabama and Mississippi rounding out the bottom three.
The ranking factors in 12 variables, including policy (like renewable portfolio standards, electricity prices, net energy metering), incentives (including tax credits, performance payments, tax exemptions), and outcomes (payback time and internal rate of return). The rankings don't equate to the states with the most solar; they capture the states with the policy framework most amenable to customers putting solar on their roofs.
It's worth noting that the folks putting out this ranking don't just like solar, they think it rocks. (The group also draws funding from partnerships with local installers, who can reach customers through the website.)
That means this metric isn't looking for the same things as a ratepayer advocate, who wants to keep costs down for the system while improving service. A policy framework that best serves residential solar probably isn't the optimal situation for an energy storage vendor, who wants to see incentives for self-consumption, rather than selling lots of excess solar power to the grid.
This report, then, is useful for seeing what solar advocates want to see.
The results suggest that net metering and the renewable portfolio standards, which require that states obtain a certain amount of electricity from renewable sources, have the most positive impact, said Ben Zientara, lead researcher and policy analyst at SPR.
“All the states that received an 'A' have high marks in those two areas especially. […] Good solar policy flows from RPS laws,” Zientara said.
That connection is visible in the color wheel above: The outer ring represents overall grade, from green to red, and the next ring inward grades the state's RPS law. Also see ring 5, which tracks net metering.
Massachusetts held steady in first place this year, buoyed by a new net metering bill passed in April.
“The state’s policies for solar are nearly as good as they can be, and while we’d like to see an updated RPS with a new solar carve-out, the Bay State is still the easiest state in which to get into solar,” the report says. “And that payback time is nuts,” at four years for a 5-kilowatt system.
The top 10 states have stayed pretty consistent, Zientara said, with one surprise. Rhode Island surged ahead by 12 spots since the last ranking, finishing the year in third place. Zientara credits this to an improved RPS, as well as excellent performance payments, which close contenders like Oregon and New York lack.
Even though it dominates in real-world solar deployments, California doesn't fare particularly well in the rankings. The Golden State came in 16th, getting dinged for allowing the property tax exemption to lapse. The state also took low marks in the categories of RPS solar carve-out and tax credits. That's still a B grade with payback time in eight years; it's just not a leadership position under this metric.
Incentives typically decline as solar gets cheaper and adoption ticks up — that's the point of these measures, to reward the early adopters and get the market going. Places like Germany and Australia saw huge rates of solar adoption with their favorable feed-in tariffs, and now those rates of reimbursement are falling, having done their jobs.
The current methodology penalizes states that have succeeded in spurring solar deployment and then dialed back direct incentives. As prices fall and incentives become less relevant to system affordability, SPR may shift the metric to weigh policy more heavily, Zientara said.
At the bottom of the pile is Mississippi, which bombs on all the incentives categories, as well as the key policies of RPS and interconnection. The fail streak is broken only by “D” grades for electricity cost and net metering. Residents there have to wait 16 years to achieve payback on their 5-kilowatt solar investment, which makes a lot of other investments look more attractive.
Looking ahead, Solar Power Rocks is gearing up for more net metering debates in 2017. The key is to give customers a clear, long-term picture of how they'll get paid for the energy they produce, Zientara said. That helps them decide on their investment, and helps utilities plan out what they'll be paying.
The federal landscape has become murky and inscrutable. President-elect Donald Trump has signaled both a desire to reinvigorate American fossil-fuel production and support for domestic clean energy and the jobs it supports.
“People overwhelmingly favor solar, and that hopefully will cause lawmakers to take note,” Zientara said.
Join GTM for actionable conversations on the future of electricity in our nation's most innovative state. California's Distributed Energy Future 2017 will be held in San Francisco, March 8-9. Learn more here.