There are 17 active shared renewables programs in place in 13 states plus Washington, D.C.
- Two received A grades (12%)—Minnesota and New York. These states have incorporated the majority of shared renewables best practices identified by IREC.
- Five received B grades (29%)—California (Virtual Net Metering), Colorado, Washington, D.C., Massachusetts (Community Shared Solar/Virtual Net Metering) and Maryland. Although these states have some room for improvement, their programs reflect many best practices and offer solid foundations for shared renewable energy development.
- Eight received C grades (47%)—Connecticut (Virtual Net Metering), Delaware, Hawaii, Massachusetts (Neighborhood Net Metering), Maine, New Hampshire, Rhode Island and Vermont. These programs lack many of the key components necessary for successful market development.
- Two received D grades (12%)—California (Enhanced Community Renewables component of the Green Tariff Shared Renewables program) and Connecticut (Shared Clean Energy Facility Pilot Program). These programs do not comport with many of the IREC-identified best practices which could impede program effectiveness and market development
WHAT’S NEW IN THE 2018 SCORECARD?
- To capture program viability, we added an extra credit question that provides additional points if more than 10 megawatts have been installed under a program. Though installed capacity is substantially higher under a few programs, this lower number was chosen as a proxy for a basic level of market viability.
- To recognize the importance of providing bill credit values beyond the short term avoided cost, we added a scoring metric to capture the various ways that states are attempting to provide fair and adequate compensation for shared renewable energy generation, including bill credits valued at the utility’s retail rate, credits that include generation and some portion of transmission and/or distribution rate components, or renewable energy credits (RECs) that are used to enhance the bill credit value.
- We added an additional bonus question to provide credit for programs that have included a mechanism to ensure residential and small commercial participation. Incentives or mandates to increase small customer participation can help to ensure that large customers do not subscribe to all of a program’s capacity, expanding access to renewable energy to those who may not be able to participate otherwise.
- In addition to new scoring criteria, we worked with external organizations to improve and refine existing scoring metrics, which included changing the points awarded for certain criteria.
STATE PROGRAMS NOT GRADED IN 2018 SCORECARD
- Three more states have passed shared renewables legislation or are in the process of implementing rules for their programs—Illinois, Oregon and New Jersey. In addition, California recently adopted its Community Solar – Green Tariff program which is currently being implemented and therefore not evaluated yet in the Scorecard. The rules for all state programs, whether they are graded in our Scorecard or not, are captured in IREC’s Shared Renewables Policy Catalog.
STATE COMPARISON ON KEY PROGRAM COMPONENTS
- BILL CREDIT VALUATION – Ensuring that a program offers a fair value proposition to participants and tangible economic benefits on their utility bills is critical for program success and is the second of IREC’s Five Guiding Principles for Shared Renewable Energy Programs. All but two programs (California’s Enhanced Community Renewables program and Hawaii’s Community-Based Renewable Energy program) provide bill credit rates that are either at the utility’s retail rate, combine the generation rate with at least some portion of the transmission and/or distribution charge, and/or use renewable energy credits (RECs) to enhance the bill credit value.
- PROJECT SITING REQUIREMENTS – Giving providers flexibility with respect to where they locate facilities—especially whether facilities are on-site, with some or all participants, or off-site—can maximize the options available to customers and help to drive down costs for customers as well. Out of the 17 programs, one requires facilities to be located on-site (California’s Virtual Net Metering program) and one was geared toward off-site facilities (Connecticut’s Shared Clean Energy Facility Pilot Program).
- INTERCONNECTION PROCEDURES – Effective interconnection processes are essential to supporting a successful shared renewable energy program. Only four states, including California, Hawaii, Massachusetts and New York, received an ‘A’ grade from Freeing the Grid, indicating that the remaining states could benefit from aligning their interconnection standards with best practices (see IREC’s Model Interconnection Procedures).
- LOW- TO MODERATE-INCOME CUSTOMER PARTICIPATION – Nine states include some kind of component to promote low- to moderate-income customer participation, such as a capacity carve-out or target. However only five states have in some way addressed financing barriers faced by low- to-moderate income participants, which tend to be the most significant obstacles to participation for these customers, as discussed in IREC’s Shared Renewable Energy for Low- to Moderate-Income Consumers: Policy Guidelines and Model Provisions. These states are California, Connecticut, Massachusetts, Minnesota and New York; they receive additional credit in the Scorecard for doing so.
- SUBSCRIPTION PORTABILITY & TRANSFERABILITY – A participant’s ability to move within a utility service territory and keep their shared renewables subscription (portability) or transfer their subscription to someone else or back to the project owner or manager if they move out of the service territory (transferability) offers flexibility that is important to consumers. Thirteen programs explicitly permit transferability, while only seven programs explicitly allow portability.
- THIRD PARTY OWNERSHIP & MANAGEMENT – To date, all state programs allow for third-party providers to own shared renewables facilities, as well as manage them with respect to program participation, including subscriber outreach and management. Allowing for third-party provider participation is an important way to promote fair market competition, in line with the fourth of IREC’s Five Guiding Principles, and all programs received credit accordingly.
- DATA TRACKING & REPORTING – Although the majority of states have some data tracking and reporting requirements (and receive Scorecard points accordingly), they vary widely in reporting frequency and granularity of data tracked. If reported regularly (preferably on at least a monthly basis), data can be used to gauge program effectiveness and remaining program capacity, if applicable. All programs except for Connecticut’s Virtual Net Metering program and Vermont’s Group Net Metering program require at least annual data tracking and reporting.