Freeing The Grid: States moving to the head of the class

How does something so unglamorous as, say, a state’s net metering and interconnection policies, normally of interest to a small group of people, become so sophisticated, so fashionable, so competitive?

Since 2006, The Network for New Energy Choices (NNEC) has issued Freeing the Grid (FTG), a report card grading states’ policies for allowing homeowners and small business owners who generate renewable energy to connect to the grid and receive credit for the electricity they produce.

“It (2006 FTG) was a helpful first step, a good learning lesson,” said Kyle Rabin, Director of the Network for New Energy Choices , “but we knew there were lots of places to improve the way we presented the data.”

In the premier edition of FTG, eight states scored A’s. New Jersey was at the top of the list, earning the state the first Golden Meter Award, presented to the BPU’s President, Jeanne Fox. For the 2006 edition, 34 states had net metering programs, and again, eight states scored A’s; six states scored B’s; four states scored C’s; four states had a D; and 12 states had an F score. While briefly noting the importance of interconnection standards, the first edition of FTG focused on states’ net metering policies only. DSIRE’s Rusty Haynes helped review portions of the edition, but suggested that a collaborative effort would make FTG all the more successful.

In 2007, NNEC teamed up with IREC, the Vote Solar Initiative and The Solar Alliance for the second edition of FTG, released in Long Beach, CA. “We spent that year refining the content and format,” said James Rose, NNEC’s Senior Policy Analyst, and one of the co-authors of the report.

“It was a significantly bigger effort, where we separated and graded each state’s net metering and interconnection policies.”

For 2007, IREC’s model net metering standards and five states received an ‘A.’ No state received an ‘A’ for its interconnection policies; only IREC’s model interconnection standard scored an ‘A.’ Here’s a snapshot of how the states scored for their net metering and interconnection policies in 2007:

• B: NM (6); IC (2)
• C: NM (13); IC (10)
• D: NM (9); IC (14)
• F: NM (5); IC (9)

New Jersey continued to maintain a leadership role among all stats in both of these critical policy areas.

“2007 was also the year we presented the Golden Meter Award to the Colorado Public Utility Commission for its sound net metering policy for investor-owned utilities,” said Rabin.

Freeing the Grid: Best and Worst Practices in State Net Metering Policies and Interconnection Standards released in 2008 in San Diego, examined 43 states and D.C.

“There was some interesting movement, some real progress with certain states,” said Rose. “New York went from a ‘D’ in 2007 to a ‘B’ in 2008 with its new net metering law. And due to recent changes, we expect their interconnection grade to improve for this year’s edition.” North Carolina went from an ‘F’ in interconnection policies to a ‘B’ in 2008. According to Rose, both North Carolina and New York are working to improve their net metering policies which may be reflected in the 2009 edition.

“In 2008, Arizona finally implemented net metering policies, and entered at a ‘B’,” said Rose.

Other major bright spots from the 2007 to the 2008 report include:

• Arizona, Illinois and Florida – took major steps forward by creating new programs for homeowners and businesses that want to generate their own wind or solar energy, connect to the grid, and receive credit;
• Arkansas, Kentucky, Massachusetts, Missouri, New York, Oregon, Rhode Island, Utah, and Vermont significantly improved their regulations for allowing people who generate their own renewable energy to receive credit; and
• Maryland, New Mexico, North Carolina, Oregon, Pennsylvania, and Washington and the District of Columbia significantly improved their standards for connecting renewable wind and solar systems to the local electric grid.

On the other hand, there were some notable disappointments.

In Texas, legislation passed that called for net metering to be deployed as rapidly as possible. However, the legislation didn’t define ‘net metering.’ The TDU’s and REPs opposed mandatory net metering, and took the position that the legislation didn’t require traditional net metering. As a result, Texas’s net metering score went from a ‘D’ in 2007 to an ‘F’ in 2008.

“In fact,” said Rose,” Texas’s current net metering policies may not even really count as true net metering. It’ll be interesting to see if their score changes for the 2009 edition.”

Interestingly, California’s net metering scores dropped in 2008. “We raised the best practice standard for system capacity from 1 MW to 2 MW,” said Rose,” but because California’s system capacity is still at 1 MW, its net metering score went from an ‘A’ in 2007 to a ‘B’ in 2008.”

And after four years of tracking states’ net metering and interconnection policies, New Jersey is still on top. “New Jersey is dynamic,” said Rose. “It’s constantly looking to implement the best practices. Even while at the top of the list in 2007, the state went further, extending net metering in 2008.”

The 2009 edition, to be released later this Fall, has a number of bright spots that are especially heartening, given the declining economy, Americans’ desire for energy independence, and widespread concern about climate change.

“With our 2009 edition,” said Rose, “we’ll have three solid years of grading the states, broken down into both interconnection and net metering policies. This edition will include innovative policies, like third-party financing models, and why it’s important to include them in net metering policies. We’ll also have a short sections on community solar and the intersection of net metering and feed-in tariffs.”

Both Rose and Rabin were mum on the question of the 2009 Golden Meter Award recipient. “We’ve got a few ideas,” said Rose.

Over the past four years, Rabin and Rose agree that more states continue to adopt net metering and interconnection policies, and that overall, scores are improving.

“We’ve had new entrants, like Florida, that scored an ‘A’ in 2008 for net metering,’ said Rose. “Their interconnection policies need work, but we awarded our ‘Golden Meter Award to Governor Crist earlier this year for his vision and support for net metering and renewable energy.”

I asked both Rose and Rabin why they think state policies and scores are on the rise.

“By aggregating state net metering and interconnection policies in one document,” said Rabin, “states have an extraordinary opportunity to compare their policies with each other. It’s also generated some competition between states, especially when they learn that their neighbors have higher scores.”

“I think a lot of credit for the increase of states adopting better net metering and interconnection policies can be attributed to groups like IREC, Vote Solar and the Solar Alliance,” said Rose. “Their reputation for seeing the big picture is well known, but helping states understand that removing barriers to renewable energy boosts local economies, creates thousands of new jobs, and honors constituents demand for renewable energy is the real, lasting value of this work.”

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