Shifting State Policies Reshape Distributed Solar in the U.S.
The U.S. is witnessing significant shifts in policies impacting distributed solar projects, ranging from small residential installations to large-scale projects. These distributed projects, crucial for the energy transition, offer flexibility by being integrated into rooftops and built environments. Policymakers, aiming to encourage distributed generation (DG) adoption and support a resilient grid, have enacted various policies. The first quarter of 2023 saw 173 policy actions in 41 states, with the most common changes related to net energy metering (NEM) compensation. A notable trend is the shift to time-varying or avoided cost rates for NEM, affecting compensation values and making battery energy storage essential for maximizing project value. Additionally, community solar policies are gaining traction, providing cost-effective clean energy access. While challenges like the "duck curve" phenomenon arise, states recognize the importance of responsible siting and smaller, distributed projects, expecting a rebound in residential solar installers alongside the emergence of community solar markets.