U.S. Solar and Storage Policy Trends Solar Canada Conference June 21, 2018

1. U.S. Solar and Storage Policy TrendsSolar Canada ConferenceJune 21, 2018 DC Autumn Proudlove Senior Manager of Policy Research NC Clean Energy Technology Center afproudl@ncsu.edu

2. About the NC Clean Energy Technology Center • Public Service Center administered by the College of Engineering at North Carolina State University • Mission is to advance a sustainable energy economy by educating, demonstrating and providing support for clean energy technologies practices, and policies.  • Objective research, analysis, & technical assistance – no advocacy • Manage the Database of State Incentives for Renewables and Efficiency (DSIRE – www.dsireusa.org)

3. About the 50 States Report Series Quarterly publications detailing state and utility changes related to: (1) solar policy & rate design, (2) grid modernization and energy storage, and (3) electric vehicles

4. U.S. Solar & Storage Policy Trends • Alternatives to traditional net metering

5. Customer Credits for Monthly Net Excess Generation (NEG) Under Net Metering Q1 2018 Proposed or Enacted Changes to Net Metering Policies by Type DC 25 States + DC took action on DG Compensation Policies during Q1 2018 Aggregate Cap Credit Rates or Successor Tariff Compensation for Net Excess Generation System Size Limits Other Changes to NEM Rules

6. Net Metering and Distributed Generation Compensation Policies www.dsireusa.org / June 2018 Customer Credits for Monthly Net Excess Generation (NEG) Under Net Metering www.dsireusa.org / March 2015 DC No statewide distributed generation compensation rules Statewide distributed generation compensation rules other than net metering No statewide mandatory net metering rules, but some utilities offer net metering State-developed mandatory net metering rules for certain utilities

7. Net Metering and Distributed Generation Compensation Policies www.dsireusa.org / June 2015 Customer Credits for Monthly Net Excess Generation (NEG) Under Net Metering www.dsireusa.org / March 2015 DC No statewide distributed generation compensation rules Statewide distributed generation compensation rules other than net metering No statewide mandatory net metering rules, but some utilities offer net metering State-developed mandatory net metering rules for certain utilities

8. Why are changes under consideration? • Concerns about cost-shifting • Majority of fixed & demand-based costs for residential customers generally recovered through variable rates; bill reduced through NEM • Others suggest benefits of DG negate or reverse cost shift • Efforts to become more granular in solar valuation and compensation • NEM is easy to understand, but a rough mechanism • Utilities reaching net metering aggregate caps • Sometimes an impetus for considering changes

9. DG Compensation Structures • Net Metering • One-to-one offsetting of production & consumption over the entire billing period • Net Billing • Electricity produced may be consumed directly on-site (effectively a retail rate credit); excess generation is credited at a separate rate (ex. avoided cost, value of solar) • Buy-All, Sell-All • Total production is credited at one rate; total consumption is charged at another rate

10. Net Metering • States continuing traditional net metering: • California • Moving to time-of-use rates, adopted certain non-bypassable charges • Will reevaluate in 2019 • Vermont • Adopted credit adjustors for system size, siting, and REC ownership • New Hampshire • Reduced net excess generation credit rate • Nevada • Ended net metering, but later reinstated for small customers • Net excess generation credit rate declines as installed capacity increases

11. Net Billing • Most common alternative to net metering so far • Different approaches to credit rates for exported energy • Value-based • Avoided cost • Time-varying • Location-based

12. DG Compensation Structures • States adopting net billing policies: • Arizona • Excess generation credited at avoided cost • Indiana • Excess generation credited at 2.5 times avoided cost • Utah • Excess generation credited at slightly below retail rate • Proceeding is open to develop a more permanent credit rate • Michigan • Excess generation credited at avoided energy and capacity rate • New York • Excess generation credited at a value of distributed energy resources rate

13. Buy-All, Sell-All • Least common approach • Adopted by only one state – Maine • Credit rate gradually decreases over 10 years until reaching the energy-only rate

14. U.S. Solar & Storage Policy Trends • Alternatives to traditional net metering • Efforts to quantify the value of solar

15. Q1 2018 Action on Distributed Solar Valuation and Net Metering Studies DC Q1 2018 action No recent action 17 States + DC took action on distributed solar valuation during Q1 2018

16. DG Valuation Studies

17. Source: Rocky Mountain Institute

18. DG Valuation Some states are applying the value of solar approach to compensation policies • New York – Value of Distributed Energy Resources tariff • Minnesota – Community solar • Oregon – Community solar

19. U.S. Solar & Storage Policy Trends • Alternatives to traditional net metering • Efforts to quantify the value of solar • Diverse approaches to community solar policies

20. Q1 2018 Action on Community Solar Policy Q1 2018 action No recent action 15 States took action on community solar policy during Q1 2018

21. Community Solar Policies and Programs DC Enacted Community Solar Policy Active Utility-Involved Program 19 States + DC have a statewide community solar policy No Policy Information from the NC Clean Energy Technology Center and the Smart Electric Power Alliance (2017 Solar Market Snapshot)

22. Community Solar Policy Trends State programs have different system size limits, program caps, and other requirements.

24. Community Solar Policy Trends States are working to increase opportunities for low-income customers to participate in community solar programs • Establishing carve-outs within community solar programs for low-income participants • Maryland – 60 MW set aside for projects focused on LMI customers • Connecticut S.B. 336 – 10% carve-out for low-income customers • Providing incentives for low-income community solar projects or locating projects in designated “environmental justice areas” • Illinois Solar for All program • Massachusetts SMART program • New York PSC Staff proposal

25. U.S. Solar & Storage Policy Trends • Alternatives to traditional net metering • Efforts to quantify the value of solar • Diverse approaches to community solar policies • Expansive state-led grid modernization efforts

26. What is Grid Modernization? • Everyone has a different definition – some narrower, some broader • Making the grid more reliable, resilient, flexible, secure, clean, efficient, interactive, etc. • Deploying technology to achieve these goals • Also reforming policy, regulation, and rates to enable technology deployment • Very complex and challenging task – many different goals to achieve

27. Grid Modernization Activity Q1 2017-Q1 2018

28. Q1 2018 Grid Modernization Activity

29. Grid Modernization • Expansive investigatory proceedings are underway in several states • Illinois – NextGrid • (1) New Technology & Grid Integration, (2) Electricity markets, (3) Customers & Community Participation, (4) Regulatory, Environmental, and Policy Issues, (5) Metering, Communications, & Data, (6) Reliability, Resiliency, & Cybersecurity, (7) Ratemaking • Maryland – Public Conference 44 • (1) Rate Design, (2) Electric Vehicles, (3) Competitive Markets & Customer Choice, (4) Interconnection, (5) Energy Storage, (6) Distribution System Planning • Ohio – PowerForward • (1) Glimpse of the Future, (2) Exploring Technologies, (3) Ratemaking & Regulation • Rhode Island – Power Transformation Initiative • (1) Utility Business Models, (2) Grid Connectivity & Functionality, (3) Distribution System Planning, (4) Beneficial Electrification

30. U.S. Solar & Storage Policy Trends • Alternatives to traditional net metering • Efforts to quantify the value of solar • Diverse approaches to community solar policies • Expansive state-led grid modernization efforts • Energy storage starring in grid modernization activities

31. Q1 2018 Action on Energy Storage, by Type of Action

32. Energy Storage Policy Actions • Studies • Energy storage specific • Part of broader studies • Integrated Resource Planning • How is storage evaluated against traditional generation resources? • Non-Wires Alternatives • How are energy storage and other DERs evaluated as alternatives to traditional T&D investments? • Distribution System Planning • Hosting capacity mapping, locational value

33. Energy Storage Policy Actions • Storage Rate Tariffs • TOU rates, demand charges • Procurement Targets • California, Oregon, Massachusetts, New York, New Jersey • Clean Peak Standards • Interconnection Rules • Net Metering Rules • Financial Incentives • Tax Credits, Rebates, Grants, etc.

34. Takeaways • There will continue to be a high level of policy activity and change – part of a broader shift in the energy system • Generally moving toward increased granularity, complexity • States are operating as laboratories of innovation, each taking different approaches to solar, grid modernization, and energy storage • Lots of opportunity to learn from other jurisdictions!

35. Questions? Autumn Proudlove Senior Manager of Policy Research NC Clean Energy Technology Center afproudl@ncsu.edu