A team of analysts at the U.S. Department of Energy’s National Renewable Energy Laboratory (NREL) went to work on state solar market policies to better understand why policies in certain states are more successful than in others. Based statistics and detailed case studies, the analysts found 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, two 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 available 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 found that states that have matched their suite of best-practice policies to their unique context have excelled; that both the number of solar policies and the length of time the policies have been in place are important indicators of market success; and that 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.