3 Recent RPS Changes and What They Mean For You & Solar
As climate change continues to accelerate, affecting life in an ever-growing variety of different ways, institutions and society have begun to respond. We see this manifested in climate marches, discussions on Capitol Hill, in the written and digital news media, and, most notably, within state legislatures around the Nation. Currently, in the US, there are 29 states (plus the District of Columbia) that have statewide non-voluntary renewable portfolio standards (RPS). Renewable portfolio standards, although varying in content, are state legislated requirements for the utilities within the state to generate a designated percentage of their electricity sales from renewable sources by a certain date. Several states have chosen to use annual incremental increases to ensure compliance, but all states that have required RPS legislation impose heavy fines on utilities that do not adhere to the targets.
In the first half of 2019, four states, Nevada, New York, Maine, and Washington each passed significant RPS legislation that will, in all likelihood, encourage the installation of solar on both large and small scales, and pave the way for further legislation to encourage the proliferation of other renewable energy technologies. These incentives may extend to industries other than solar. Yet, as the respective state governments work to encourage the market development of renewable energy, solar, as a relatively inexpensive and long-lived technology, is sure to be recognized as an essential component to 100% renewable energy generation. This article will be focused on New York, Maine, and Nevada specifically as the legislation within those states show the most promise for solar growth.
According to SB 6599, a climate bill passed this year that is awaiting the governor’s signature, New York updated it’s renewable portfolio standards requirements to 70% renewable generation by 2030, and 100% by 2040. This rapidly updated time table will put a lot of strain on utilities in order to meet the requirement, potentially incentivizing them to encourage private consumers to install solar, increasing the demand for installation services in the state. Additionally, the bill outlines the creation of a council that will evaluate the feasibility of creating a carbon-neutral economy by 2045, and shall “identify and make recommendations on regulatory measures and other state actions that…shall at a minimum include: Measures to achieve six gigawatts (GW) of distributed solar energy capacity installed in the state by 2025.” Currently, within the state, the installed capacity is 1.7 GW. If such measures are enacted, this will represent a 252.9% increase over the next 5 ¼ years, or 17.22 megawatts (MW) of capacity installed per month. Whether the proposal for 6 GW by 2025 will be mandated or is even feasible remains to be seen. Yet this clause without a doubt demonstrates the gravity of New York’s commitment to reducing emissions and increasing renewable energy generation capacity. This legislation will pave the way for new changes soon to come. The ways in which New York will tackle this challenge remain to be seen, but the opportunity this will represent is clear.
Similarly to New York, Maine has recently made substantial legislative changes to its Renewable Portfolio Standards, in addition to other legislative changes. On June 26th, Governor Janet Mills signed L.D. 1494 into law, raising the state RPS target to 80% by 2030 and 100% by 2050. In addition to RPS, the governor signed L.D. 1711, a bill that amended the Maine Solar Energy Act in a variety of ways, including by “directing the Public Utilities Commission to solicit bids for long-term contracts to supply up to 400 megawatts of electricity from solar energy projects.” Although the bill does not specify much beyond this, this could come in the form of many small projects, both residential and stand alone, leading to an influx of new contracts in the state. At the same time, the state legislature passed L.D. 1282, a bill which stimulates statewide job creation in clean energy and puts in place steps to create legislation “to establish a virtual net metering program to facilitate the economical installation of solar photovoltaic energy systems on kindergarten to grade 12 public school buildings.” Virtual net metering is a policy which allows a utilities rate payer to offset their electricity consumption with an installation that they have paid for, but which is not located on their property. Although this would be voluntary for schools, it would make solar more accessible and attractive to schools, encouraging them to reduce their energy bills and invest in solar. This slew of bills creates a range of incentives for large and small scale installation. Although not as ambitious as New York’s recent legislation, the goals that Maine has set are realistic and achievable, and pave the way for a new wave of solar proliferation within the state.
On April 22nd, 2019, Nevada passed SB 358, a bill which increased their RPS requirement of 25% to 50% by 2030. Within the bill, Section 22, Provision 3 states that, “If, for the benefit of one or more retail customers in this State, the provider has paid for or...reimbursed, in whole or in part, the costs of the acquisition or installation of a solar energy system which qualifies as a renewable energy system and which reduces the consumption of electricity, the total reduction in the consumption of electricity during each calendar year that results from the solar energy system shall be deemed to be electricity that the provider generated or acquired from a renewable energy system for the purposes of complying with its portfolio standard.” The underlying message of this clause is, if a utility has paid for a portion or all of a solar array, the total reduction in electricity consumption that otherwise would have come from other sources will be viewed as electricity generated renewably by the utility. While this clause obviously incentivizes the Nevada utility, NV Energy, to purchase and install its own systems, it also opens up another interesting possibility. If NV Energy were to offer to reimburse residents 5%, for example, of a residential system, the entire output of the array would be considered to be electricity generated by the utility for the purposes of complying with its portfolio standard. This clause could incentivize NV Energy to encourage residents to install solar so that they can maintain compliance with the RPS at a low cost. Already, NV Energy has already pledged and applied for permission from the Public Utility Commission to install 1 GW of solar in combination with 100MW of storage, which would double the state’s renewable capacity by 2023. While solar makes up 50.5% of energy generation within the state, Nevada currently imports a large percentage of their electricity, in 2016, it was estimated that 87% of their energy consumed was imported. As the state with the least rainfall in the nation, and that is comprised mainly of desert, the potential for solar energy generation cannot be understated.
According to an article in the New York Times, the recent trend of tough climate legislation could be in response to the federal government’s decision to roll back climate change regulation. The article pointed to the decision by the federal government to withdraw from the Paris Accord as a potential reason for the surge in climate legislation. Yet, regardless of the reasoning, there is clearly momentum within the country, in both state and federal legislatures, to tackle climate change through increasing their renewable energy generation capacity. As climate change continues to progress and evolve, the number of states adopting renewable portfolio standards or other measures will only grow, which is clearly beneficial for the solar industry, and is very promising as to its continued future.