NREL Compares State Solar Policies to Determine Market Success

Analysts at the Energy Department's National Renewable Energy Lab (NREL) have used statistics and detailed case studies to better understand why solar market policies in certain states are more successful than in others. Their findings, announced on December 11, indicate that while no standard formula for solar implementation exists, a combination of foundational policies and localized strategies can increase solar photovoltaic (PV) installations in any state.

In the report, "The Effect of State Policy Suites on the Development of Solar Markets," NREL researchers examined a variety of policy- and non-policy-based factors that influenced state and local solar markets. On the policy side, 2 factors strengthen a state's solar market in all contexts: interconnection, or policies that define the procedural requirements for connecting a PV system to the electricity grid; and net metering, or policies that enable the utility to compensate individual PV system owners though a simple billing mechanism.

Non-policy issues that have implications for a solar market, such as the amount of sunlight accessible for potential solar generation, community interest in renewable energy, and the cost of competing grid electricity, were examined in the context of different states and local communities. The authors concluded that:

• States that have matched their suite of best-practice policies to their unique context have excelled

• Both the number of solar policies and the length of time the policies have been in place are important indicators of market success

• Support for solar leasing and other increasingly popular third-party ownership models seems to be a distinguishing factor in the success of solar markets in some states.

The findings indicate that, while the age and composition of policy suites are important market foundations, solar policies are more effective when tailored to the economic and demographic background of the state. This body of work is supported by the Energy Department's SunShot Initiative, which is a national effort to make solar energy cost-competitive with traditional energy sources by the end of the decade. See the NREL news release and the The Effect of State Policy Suites on the Development of Solar Markets .

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