Environment Ohio Research and Policy Center
American solar energy is booming. Hundreds of thousands more Americans each year are experiencing the environmental and consumer benefits of clean energy from the sun, often generated right on the rooftops of their homes or places of business.
A growing number of states are leading America’s ongoing solar boom. Those states are not necessarily the ones with the most sunshine, but rather the ones that have opened the door for solar energy through the adoption of strong public policies. The 10 states with the most solar capacity per capita – Nevada, Hawaii, California, Arizona, North Carolina, New Jersey, Vermont, New Mexico, Massachusetts and Colorado – have a track record of strong public policies that are enabling increasing numbers of homeowners, businesses, communities and utilities to “go solar.”
Yet while strong policies have helped to grow solar energy in the U.S., some utilities and fossil fuel companies are now working to limit the growth of distributed solar energy. Within the last year, for example, two of the top 10 states in this year’s rankings – Nevada and Hawaii – eliminated retail net metering, which makes solar energy affordable for many homes and businesses; while North Carolina’s General Assembly allowed one of the best solar tax credits in the nation to expire at the end of 2015.
By following the actions of leading states, and avoiding missteps, the United States can continue to experience dramatic growth in solar energy – resulting in cleaner air, more local jobs and reduced emissions of pollutants that cause global warming, and putting America on track to a future in which our economy is powered by 100 percent clean, renewable energy.
The top 10 solar states account for 88 percent of American solar energy capacity, but only 26 percent of America’s population. Of the 10 states with the most solar capacity per person:
- Nine had strong net metering policies at the beginning of 2015, though only seven retain strong net metering policies today following the elimination of retail net metering in Nevada and Hawaii during 2015;
- Nine have strong interconnection policies;
- Nine have policies that allow critical financing options like third-party power purchase agreements; and
- All have renewable electricity standards, while eight have specific requirements for solar energy or distributed generation.
Driven forward by the top 10 states, solar energy in the U.S. is reaching new heights of adoption:
- In February 2016 America saw its one millionth solar installation, compared to just 10,000 installations in 2003. While it took 40 years for America to reach one million solar installations, forecasts predict an additional one million solar installations in the next two years.
- American solar energy capacity doubled from 2013 to 2015.
- California now generates the equivalent of nearly 8 percent of the electricity it uses each year with solar energy.
- Solar energy is expected to be the leading source of new utility-scale electric generating capacity in the U.S. in 2016.
Despite the rapid increase in solar energy capacity, some states and utilities are exploring and adopting policies that could slow future growth in solar energy:
- Nevada, which now holds the number one ranking for solar capacity per capita, eliminated retail net metering in 2015 and imposed higher charges on solar customers.
- Rooftop solar installations have slowed in parts of Arizona due to new demand charges imposed by the Salt River Project utility on its solar customers, while similar charges are pending before state regulators by utilities Arizona Public Service and UniSource Energy as of June 2016.
- In 2015, at least 13 utilities proposed the imposition of demand charges on their customers, which can reduce the economic viability of rooftop solar installations.
Strong public policies at every level of government can help unlock America’s potential for solar energy and pave the way toward powering America with 100 percent clean, renewable energy. State governments should encourage adoption of solar energy through policies including net metering, statewide interconnection standards, and ambitious renewable electricity standards with solar carve-outs. By encouraging solar power, states can bring about environmental and consumer benefits to their residents, while driving forward America’s transition to a clean energy economy.