Nearly every U.S. state took some kind of policy action on distributed solar in the second quarter of 2016, according to the latest edition of The 50 States of Solar report by the NC Clean Energy Technology Center (NCCETC).
The report finds that 42 states plus the District of Columbia took a cumulative total of 121 actions related to distributed solar policy and rate design in Q2. Actions include regulatory dockets, rate cases and rulemaking proceedings, as well as relevant legislation that has passed in at least one chamber. Of the actions cataloged, residential fixed-charge increases, net metering changes and value of distributed energy studies were the common.
Forty-two utilities in 25 states plus Washington, D.C. had pending or decided requests to increase monthly fixed charges on all residential customers by at least 10 percent, according to the report. Higher fixed fees make the cost equation for distributed solar less appealing.
“We are seeing no sign of decline in requests to increase residential fixed charges,” said Autumn Proudlove, report co-author and senior policy analyst at NCCETC, in a statement. “However, in over half of the fixed charge decisions made this year, utilities were not granted any increase.”
Thirty-six utilities in 24 states considered or enacted changes to net energy metering policies, which compensate rooftop solar customers for excess generation sent to the grid. Fifteen states plus D.C. formally examined or resolved to examine the value of distributed generation or the costs and benefits of net metering.
In addition, 11 states took policy action on community solar, eight utilities in six states proposed introducing or increasing existing charges on rooftop solar customers, three states had policy action on third-party solar ownership laws or regulations, and three states had action on utility-owned rooftop solar policies or programs.
While there have been a slew of different policy actions in recent months, NCCETC noted that demand-charge proposals have not ticked up as expected.
According to data from EQ Research, 19 investor-owned utilities have proposed establishing residential demand charges in a state PUC proceeding in the last two years. Of the proposals, nine have been withdrawn, nine are still pending and just one has been approved — Black Hills Power in Wyoming implemented a mandatory demand charge for all distributed generation customers in October 2014. Demand charges have been introduced by only a handful of non-investor-owned utilities.
There is a widespread concern that demand charges, which are based on a customer’s highest average energy usage over a given period of time, are too difficult for most residential customers to manage. Last month, the National Association of Regulatory Utility Commissioners released a draft manual for utility regulators on the compensation of distributed energy resources that expressed uncertainty on how to design and implement the charges fairly.
Arizona Public Service is one of the few utilities to have proposed universal residential demand charges, which were included as part of a broader rate reform package introduced in June. The utility says the changes have the potential to save customers money.
Other major policy developments last quarter include a compromise bill to raise net metering caps by 3 percent in Massachusetts, the approval of virtual net metering (among other clean energy developments) in Rhode Island, and the advancement of a ballot initiative to overturn controversial net metering changes in Nevada.
“Again, we found a tremendous amount of activity across the U.S. in the last quarter,” observed Brian Lips, report co-author and energy policy project coordinator at NCCETC. “From direct changes to net metering rules, to rate design revisions, there are many opportunities for state markets to be weakened or strengthened. States that were once dominant in distributed solar adoption may not be dominant in the future, just as states that have lagged behind may quickly jump to the front of the pack.”
This article was originally featured on greentechmedia.com.