In Vermont’s state legislature, a bill is under consideration that will help owners of residential solar photovoltaic (PV) systems put more green into their pockets.

It’s not a rebate or an incentive program to reduce installation costs, but a change to net-metering policies–a change that can reap substantial savings for Vermont residents.

What Is Net Metering?

When a grid-connected, residential solar system generates more electricity than the home is currently using, the home’s electrical meter literally spins backward, sending the surplus energy back into the electrical grid. In many states, the customer then gets a credit for that energy on the monthly electrical bill.

Net metering is one of the primary reasons that going solar has become so affordable. Even with a small home solar system, there are periods of the day when it will generate more energy than the home needs. When that excess electricity is credited to a home energy bill, it cuts down on the costs of the conventional energy that a homeowner may need to supplement the PV system.

Why is Vermont’s Net Metering Policy Changing?

Across the nation, public utilities are mandated to invest in renewable energy. Many utilities partially meet these mandates through net metering, but states are allowed to dictate the percentage of solar-generated electricity that utilities credit their customers. Last year, Vermont raised the cap on the amount that utilities can get from net-metered PV systems to 4 percent.

This, along with Vermont solar rebates, was good news for residents, but the new law restricted the size of eligible solar panel systems to only 5 kilowatts. In Vermont, the average home PV system is around 7 kilowatts, leaving most homeowners ineligible to take advantage of the extra savings without undergoing a taxing application process.

House Bill 475, which just passed in the state’s house of representatives, allows for a simple application process for PV systems sized up to 10 kilowatts. Best of all, the bill also credits customers with home solar systems more money per kilowatt hour for surplus electricity. The bill must still pass the state’s senate.

What About Other States?

Almost every state has programs in place that garner extra income for PV system owners. In many areas of California, for example, net metering savings can be augmented by taking advantage of tiered and time-of-use (TOU) rates. Tiered rates are those that rise as the customer uses more energy. TOU rates increase during peak-demand periods. Home PV systems typically generate enough electricity to keep customers in the lower, base rates.

Other states like New Jersey award home solar system owners a Solar Renewable Energy Credit (SREC) for each megawatt-hour of electricity that their systems produce. New Jersey SRECs are currently selling for $675 each.

Cutting installation costs through rebate and incentive programs is only the beginning of solar savings. Programs like net metering not only offer ongoing savings for homeowners, but decrease the payback period for their systems. Once that period is over, those savings become sheer profit.

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We hear a lot about the upcoming democratization of energy.  But with the average consumer thinking about energy only six minutes per year, it’s fair to wonder if anyone will show up to ‘vote.’

But this week an alliance that includes the intriguing combination of Opower and Facebook offers promise that this futuristic concept may not be so far off into the future.

The democratization of energy gives consumers the ability to take charge of their electricity production and use via new technologies, much the way they’ve gained control over information flow via the Internet. Think rooftop solar panels and plug-in electric vehicles, which together give you the ability to not only make your own energy, but also store it and sell it. Combine these technologies with smart meters, dynamic pricing, virtual net metering, solar gardens, home energy displays and Internet-enabled appliances and you have an electricity system that looks far different than today’s. Large energy producers and operators now control the electric grid, but a democratized grid distributes this control to the rest of us. You and I, in essence, become the power plant.

The democratization of energy, also called the energy internet, holds a lot of appeal in a world where we feel like victims of larger forces that control our economic fate. When oil prices spike, we helplessly take another financial hit.

The energy internet promises to help us be more energy efficient, save money, in some cases make money, and enjoy more comfort and automation in our homes.

However, so far, consumers haven’t shown much interest in taking charge of their energy use, even in fundamental ways. Perhaps this is because the concept of energy democratization seems remote and speculative – to those who think about it at all.  I’m reminded of the nascent days of the Internet, when futurists made lofty claims that it would change banking, shopping and the workplace, and even revolutionize politics worldwide through an inexorable flow of information. At the time, most of us still saw the computer as little more than a difficult-to-use word processing machine.

Apple Computer changed that by making the computer more user-friendly.  Opower (and similar companies) is the Apple of the energy internet, in that it’s figuring out ways to give energy efficiency technologies consumer appeal. Opower does this by tapping into our social instincts and playing on our sense of community, camaraderie and even competition to incite us to pursue energy efficiency in our homes.

But the work is being done community by community, so it’s slow going.  So far Opower has sent its home energy report – a key ingredient of its method – to 3 million households. How to speed it up? That’s where Facebook comes into play, with its 800 million worldwide users all meeting and socializing in one big virtual spot.

Opower intends to use Facebook to set up friendly competitions among households. If yours is one of the 60 US utilities that already partners with Opower, you’ll be able to download your home’s actual energy use from Facebook, compare it against similar households and chart your progress with regular updates from your utility. The Natural Resources Defense Council, the third leg of the partnership, will provide environmental information.

Opower envisions social networking groups and communities forming around their new energy knowledge. These groups could have a significant impact on the success or defeat of energy efficiency products and businesses. Think about how fast video gets passed around Facebook of cats doing cute things. That could instead be word of a hot, new energy product. Or conversely news could go viral of the light bulb that burns out too quickly or the appliance that fails to live up to its promise. Energy efficiency companies will need to be on their toes.

The partnership plans to launch the new venture early next year in the Chicago area through Commonwealth Edison.  It’s fair to assume that many will ‘like’ it.

Elisa Wood is a long-time energy writer whose work appears in many of the industry’s top magazines and newsletters. She is publisher of the Energy Efficiency Markets podcast and newsletter.

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The California Solar Initiative requires that solar systems that receive an incentive be sized to meet on-site load.

However, what if you install a solar system, then your kids go off to college?

Suddenly, without the hairdryers, radios, and extra computers, you may find yourself with extra solar generation at the end of the year.

Previously, any excess generation, after the annual net metering true-up, was gifted to utilities. AB 920 (Huffman; sponsored by Environment California) passed in 2009, required California Investor-Owned Utilities to purchase net surplus generation at a rate set by the Commission, under some very specific parameters.

After voluminous commentary by parties to the proceeding, on June 10 the CPUC issued a decision. Unfortunately, it isn’t going to be much.

The Commission voted 4-1 to use short term, day-ahead pricing, rather than a metric that recognized that solar is a long-term generating asset. Current DLAP pricing isn’t much (we’ve had a great hydro year — on May 31, DLAP was 0.2 cents/kWh for the day), but futures indicate a 2012 average under 4 to 5 cents/kWh.

A concern is that this doesn’t set adverse precedent. Take a look at the video of the vote (you need RealPlayer). While the Commissioners left themselves room by pointing out that these are not long-term contracts and therefore deserve different treatment and value (an argument that we are not persuaded by), they also indicate that costs are a primary motivating concern.

Here’s the SF Chronicle article.

Vote Solar is a non-profit grassroots organization working to fight climate change and foster economic opportunity by bringing solar energy into the mainstream.

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Over the past year and to the chagrin of many, Maryland has struggled to ensure that its net metering program remains an effective policy mechanism for the future of solar deployment. Of particular concern was legislation passed in 2010 that would have significantly weakened the state’s net metering policy by eliminating the ability for a customer to rollover excess generation from month to month at the full retail rate. Fortunately, the state’s renewable energy champions and stakeholders made this issue a priority during this year’s 428th legislative session. Result: Maryland’s net metering program will keep on rolling.

As many of us are aware, the treatment of excess generation is at the heart of net metering and is an imperative fundamental of this policy pillar. Without question, the best net metering programs enable a customer to utilize excess generation from one month to offset the electricity demands in future months. Whereas the most expansive programs allow for the indefinite rollover of excess generation credits, some require customers to donate excess generation credits to the utility at the end of a year or to accept payment for these credits at avoided cost.

Crediting excess generation at the full value of retail electricity (i.e., generation, transmission and distribution charges) ensures that a customer is able to realize all the economic benefits of self-generation despite fluctuations in their electricity generation and consumption throughout the course of a year. Importantly, monthly rollover enables a customer to design a solar system to meet their individual electricity demands.

As an alternative to this tried and true fundamental, in 2010 Maryland explored an arrangement in which a customer’s excess generation would be reconciled on a monthly basis at the prevailing market price in the PJM interconnection energy market. In other words, instead of valuation at the full retail rate, excess generation would be valued according to PJM’s locational marginal price (LMP), or generally speaking, the cost of wholesale power on the spot market which varies from day-to-day, hour-to-hour. Despite this clear reduction in value, considering that solar facilities can generate significant output during periods of peak demand, and thus peak marginal pricing, the proposition proved alluring.

As part of implementing these legislative amendments, however, the Maryland Energy Administration (MEA) undertook an economic analysis concluding there would be an indisputable reduction in the value of net metering if the current practice of carrying a kWh credit forward was replaced with a monthly LMP payment. After a painstaking rulemaking process at the Public Service Commission, it was clear that the pillar that was once Maryland’s net metering policy had eroded to the point of being ineffectual.

MEA’s analysis demonstrates that a net metering regime where excess kWh generation from one month is rolled forward to a future month is the most economically beneficial arrangement for a customer-generator. For example, the MEA analysis shows that a non-electric heat customer who would install solar to meet 100% of their annual needs would pay an electric bill of $94 annually under kWh rollover. On the other hand, under a monthly dollar payment at PJM LMP for any excess generation, that customer’s bill nearly doubles to $175 annually.

Clearly, this modification greatly jeopardized the viability of Maryland’s net metering policy for enabling residents and businesses to generate their own clean energy.

Fortunately, and to the credit of the state’s renewable energy champions, Maryland was able to quickly mend its net metering program through the enactment (May 19, 2011) of Senate Bill 380 and House Bill 860, thus returning its net metering policy to hinge on monthly carryover at the full retail rate. Governor O’Malley, Senator Pinsky and Delegate McHale should be commended for their timely efforts to correct last year’s snafu.

As solar markets mature and larger quantities of solar come online, it will be no surprise that a range of stakeholders will look to improve upon or in some cases undermine the principles of net metering. It is here we should all take pause, and remember the fundamentals that have made net metering one of the most important catalysts of the clean energy economy.

Vote Solar is a non-profit grassroots organization working to fight climate change and foster economic opportunity by bringing solar energy into the mainstream.

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Delaware’s industrial sector is the largest consumer of electricity in the state due to a number of energy-intensive industries such as chemical plants, a major petroleum refinery and a number of large manufacturers. As well, its entire transportation sector is petroleum fuel dependent. It was estimated that each citizen uses approximately 7.4 gallons of oil each day. In the last few years, Delaware has made an increasingly large effort to move away from their complete dependence on fossil fuels and employ more energy efficient measures while also utilizing sources of renewable energy.

1) Renewable Energy Businesses in Delaware. Delaware is home to a large number of renewable energy businesses that work on regional, national, and international levels. There is the Institute of Energy Conversion, which is a nonprofit research organization dedicated to the research and development of thin-film photovoltaic cells. Modern Earth Inc. designs, manufactures, and sells solar modular homes that provide solar power, solar venting, and solar heating. Then there is Sanmak Solar Systems, an engineering and installation company that performs energy audits for businesses and homes and then offers a comprehensive plan to make necessary energy efficient improvements to your home.

2) Financial Incentives for Businesses and Homeowners for Renewable Energy and Energy Efficiency. The state of Delaware has created a number of financial incentives to make it easier for businesses and homes to become more energy efficient and use renewable sources of energy. This includes state grant programs, such as Research and Development Grants and Technology and Demonstration Grants, as well as a Non-Residential Efficiency Plus Financing Program, a number of state rebate programs through the Sustainable Energy Utility company, including Efficiency Plus Homes and Non-Residential Efficiency Plus Rebate Program, and a number of utility rebate programs.

3) Delaware Green Energy Program. The Delaware Green Energy Program offers cash incentives to citizens of Delaware who are looking to install renewable energy systems. To participate in the Delaware Green Energy Program, citizens need to install the system of their choosing and their electricity utility company must have a program for it. The participating utilities include Delmarva Power, Delaware Electric Cooperative, and Municipal Power and the program covers photovoltaic systems, solar water heating systems, geothermal systems, and wind turbine installers.

4) Delaware Renewable Energy Task Force. Created by Bill 119, the Delaware Renewable Energy Task Force offers recommendations to the state government on how to establish trading mechanisms for renewable energy as well as other structures that will support the development and growth of renewable energy throughout the state of Delaware. It is supported by the Delaware Department of Natural Resources and Environmental Control’s Energy Office.

5) Renewable Energy Relief Program. Since 1999, Delaware has offered a number of incentives for individuals who elected to install geothermal heat pumps, photovoltaic systems, wind turbines, and solar water heating pumps in an effort to lower fossil fuel dependence. However, after awhile, the state was no longer able to afford the incentives. After the 2009 American Recovery and Reinvestment Act, Delaware reinstated their Renewable Energy Relief Program throughout the state to support renewable energy and energy efficiency, decrease pollution, and create new employment opportunities. To receive money, you need to install an energy system after April of 2009, have an energy audit performed, and install a minimum of $500 in recommended energy efficiency improvements.

6) 2010 Update on Energy Bills. In the summer of 2010, the governor of Delaware, Jack Markell, signed four renewable energy bills that were created in an effort to grow the solar and wind power industries within the state. A number of new incentives were created to attract new investment opportunities into these industries. Incentives are also offered to solar designers, manufacturers, and installation companies. Renewable sources of energy are promoted, including the possibility of constructing a large wind park right off the coast of the state. Collin O’Mara, Secretary of the Delaware Department of Natural Resources and Environmental Control said, “More than 95 percent of Delaware’s electricity comes from fossil fuels with 70 percent from coal-burning power plants. These green energy bills will help the state transition at a faster rate to renewable energy. We can dramatically reduce our reliance on fossil fuels in the next 15 years and more closer to the healthy environment and green economy we want in Delaware.”

7) Delaware Technology Park. The Delaware Technology Park is a nonprofit research park that offers a number of industries, including renewable energy companies access to the necessary connections and resources required to accelerate their overall economic success. The Delaware Technology Park has assisted more than 75 companies in growing their business, and as such, has created over 15,000 new jobs throughout the state. Some renewable energy companies that have come out of the park include Standard Solar, which built the largest single solar rooftop installation in the state, NRG-Bluewater Wind, and Blue Hen Wind and Gamesa Technology Corporation.

8 ) Deleware Allows for Net Metering. In 2010 Governor of Delaware, Markell, signed an energy bill that strengthened the net metering law by boosting the total quantity of energy customers are able to sell back to the electric supply grid they are connected to. With this law, businesses and homes are able to sell back up to 110 percent of their aggregate consumption to their grid. As well, business campuses and agricultural operations are able to aggregate a number of meters for several locations in an effort to determine the total sum of power may be resold through one meter. By doing this, customers will have the opportunity to finance much larger renewable energy installations that will meet their increasing needs. Homeowner associations and other similar groups are able to cooperatively finance and create community-scale renewable energy projects on and off site.

9) Partnership between National Renewable Energy Laboratory and University of Delaware to Develop Offshore Wind Energy Research Site. In 2010, a partnership between the University of Delaware and the National Renewable Energy Laboratory was created to develop an offshore wind energy research site approximately three miles off the coast of the state. The research site would enable companies to trial and test new wind technologies before setting it to market. State environmental chief, O’Mara stated that the joint partnership would create not only a near-shore research and development park, but also a rigorous facility for testing. It will provide major economic benefits for Delaware and assist in growing its alternative energy technology center.

10) Delaware Created 41 Block Grants for Solar Projects. In 2011, the governor of Delaware and the Secretary of the Department of Natural Resources and Environmental Control announced a number of new energy efficiency block grants, which includes a number of grants for photovoltaic projects in Sussex County. The grants receive support from the Delaware Energy Efficiency and Conservation Block Grant Program. The money comes from what has been set aside in the American Recovery and Reinvestment Act. The supported projects are said to save the Delaware counties $365,000 in yearly energy costs.

Article by Shawn Lesser, Co-founder & Managing Partner of Atlanta-based Watershed Capital Group – an investment bank assisting sustainable fund and companies raise capital, perform acquisitions, and in other strategic financial decisions. He is also a Co-founder of the GCCA Global Cleantech Cluster Association ”The Global Voice of Cleantech”. He writes for various cleantech publications and is known as the David Letterman of Cleantech for his “Top 10″ series. He can be reached at shawn@watershedcapital.com

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Consider that only one-quarter of residential rooftops are suitable for solar PV and that one-third of Americans are renters who are typically unable to install a solar system on their landlord’s roof. That adds up to a whole lotta energy consumers who simply can’t go solar in the usual way.

New community solar models aim to address this barrier to adoption by allowing a broader segment of the population to harness the power of the sun. Varying models involving joint-ownership by consumers, utility programs for shared consumer participation, and third-party ownership options are being piloted in a few communities in states.

With a little help from their friends at Vote Solar, IREC assessed these many approaches and recently released Model Program Rules for Community Renewables. Although community solar programs will undoubtedly continue to come in many shapes and flavors according to local needs, these model rules serve as a valuable framework for states looking to advance community solar options. And it’s with great pleasure that we now make them and additional policy guidelines available online via our new Community Solar website.

With detailed prescriptions ranging from the allocation of benefits to program administration, IREC’s model rules stand on two core principles:

1. Participants in a community renewables program should have an experience that is as similar as possible to that of customers investing in onsite renewable energy. It is in this regard that IREC’s model rules recommend some key parameters to support this fundamental tenet. Valuing the energy generated by a community solar system at a participant’s retail rate and allocating these benefits through virtual net metering, for instance, maintains an experience closely comparable to onsite solar investment.

2. Community renewables programs should not undermine successful on-site renewable energy programs. Many states have established programs under which both consumers and businesses have heavily invested in the solar industry. Replacing existing programs with a new community renewables program would only stymie overall market transformation towards grid parity. These new programs should therefore be designed to reach those customers who are unable to consider onsite investment. This can be achieved through programs that allow a variety of ownership options (e.g., direct, third-party, utility) in which utilities play an intimate role in administration and are compensated accordingly.

Delaware is one state that has recently delved into the world of community solar. In early 2010 Delaware’s 145th General Assembly passed Senate Bill 267 to expand opportunities for ownership and participation in solar energy resources. Specifically, the bill adjusts the state’s net metering rules to allow allocation of net energy metering credits to other accounts than the site host. This structure allows groups of customers to harness the benefits of an investment in shared renewable energy facilities.

Delaware’s lawmakers should be commended for their vision for expanding renewables opportunities in the state. SB267 sets forth a clear policy direction. Now it’s time to find where the rubber meets the road. Delaware’s regulators are in the process of implementing the new provisions, and Vote Solar is engaged in the process working to establish a robust and effective community renewables program in the state. You can bet that we’ll be working closely with IREC to advocate for those new model rules along the way.

Colorado is also on the forefront of this new movement. In June 2010, Governor Ritter signed the Community Solar Gardens Act (HB 10-1342), which defines such projects as being groups of 10 or more subscribers. The bill contained provisions that ensure these projects won’t be regulated by the Commission like utilities, and extends many of the same net metering benefits to community solar participants that are currently available to homeowners with behind-the-meter solar systems. The program will begin as a 3-year pilot with up to 6 Megawatts of development. Commission-hosted workshops will begin in early December to flesh out the rules for implementing this program and Vote Solar will be an active participant.

Vote Solar is a non-profit grassroots organization working to fight climate change and foster economic opportunity by bringing solar energy into the mainstream.

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There are plenty of not-so-sunny renewable policy news headlines these days. Congress failed to pass comprehensive energy legislation this year – and as of yesterday, things don’t even look good for a piecemeal extension of the critical Treasury Grant Program before it expires this month. But it’s not all doom and gloom. Despite gridlock higher up, state and local leaders have been busy expanding opportunities for Americans to invest in our new energy economy.

Along with our partners at NNEC, IREC and the North Carolina Solar Center, we just released the 2010 Edition of Freeing the Grid, our policy guide that grades states on two key programs: net metering and interconnection procedures. Together these policies empower energy customers to use solar and other renewables to meet their own electricity needs. Now in its fourth year of publication, the 2010 report shows that states continue to drive renewable energy progress.

Some highlights from this year’s report:

* Net Metering Rules: You know this one – the policy that lets a customer’s electric meter spin backwards. In 2010, 37 states received “A” or “B” grades for their net metering policies, up from 13 states in 2007.

* Interconnection Procedures: Interconnection procedures are the rules and processes that an energy customer must follow to be able to “plug” their renewable energy system into the electricity grid. The goal is to keep this process from being so lengthy, arduous or expensive that it thwarts the development of clean energy altogether. In 2010, twenty states received “A” or “B” grades for good interconnection practices, a tremendous improvement over the solitary “B” grade awarded in 2007.
* Head of the Class: Massachusetts and Utah received exceptional “A” grades in both interconnection and net metering. This is the first time in the report’s history that any state has achieved “A” grades in both categories.
* Most Likely to Succeed: Colorado’s use of proven best practices and innovative new policy models earned it the top score in net metering. Colorado allows many customer types and systems sizes to benefit from net metering, enabling broad participation in the state’s renewable energy economy. In 2010, the state also took pioneering steps to allow shared, community solar energy systems to receive net metering credits through “Community Solar Gardens.”

And a few words from our valedictorians:

* Colorado Governor Bill Ritter: “I am proud that Colorado is leading the way on distributed renewable energy. We have worked hard to diversify our energy supplies and create jobs, while also trying to make distributed renewable energy affordable for our commercial and residential sectors. This is smart, forward-thinking policy that other states can, and should, follow.”
* Massachusetts Secretary of Energy and Environmental Affairs Ian Bowles: “That Massachusetts earned the top ranking in this national report is further proof of the Commonwealth’s clean energy leadership. New net metering regulations adopted under the Green Communities Act of 2008 increase the value of renewable power for those who install it – putting the economic value of power generated by these projects on par with electricity purchased from the grid while accelerating the development of renewable energy projects across the state. In addition, the administration continues its efforts to ensure that the ever-increasing number of projects completed are interconnected in an expeditious fashion.”
* Sara Baldwin, of Utah Clean Energy: “Utah’s decision-makers have increasingly recognized the full value of renewable energy resources and worked alongside the clean energy stakeholders to remove barriers to their adoption. Seeing that progress reflected in this year’s grades reminds us of how rewarding and productive a process it’s been. Utah Clean Energy looks forward to continuing to work with all vested stakeholders to ensure that Utah’s high marks in Freeing the Grid translate into more renewable energy projects and more opportunities for job creation and economic development, statewide.”

A hearty congratulations to these states for their leadership and vision in driving real renewable energy progress and job growth. In combination with policies that grow wholesale renewable generation for the utility sector, these state-level policies for customer self-generation are building robust and sustainable renewable energy markets across the country.

Let’s keep up the good work. With 2011 just around the corner, we look forward to working alongside policymakers, regulators and other partners to continue building our nation’s new energy economy, state by state.

Vote Solar is a non-profit grassroots organization working to fight climate change and foster economic opportunity by bringing solar energy into the mainstream.

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Monday was a day for the solar history books.

The country’s first community-owned solar installation began delivering clean, renewable electricity to the grid in El Jebel, Colorado. The 340-panel solar installation is unique because it is owned by an array of local residents rather than any single person, utility, developer or corporation. The El Jebel “solar garden” represents a budding trend, pioneered in Colorado, toward community solar power. The benefits are many, including lower costs and the distribution of clean electricity from the sun.

Better yet, the El Jebel facility is built on otherwise unusable land in the Roaring Fork Valley. It will produce 77.7 kilowatts of solar power at peak. Year-round and seasonal residents of the valley purchased individual portions of the array, which was developed by Clean Energy Collective and grid-connected in partnership with local electric cooperative Holy Cross Energy. Holy Cross collects the power produced by the solar garden and then directly credits owners’ utility bill each month at a rate of $0.11/kWh, with some owners paying as little as $725 per panel, or $3.15/kW, up front.

“It’s great to get local renewable energy off the ground,” said Del Worley, CEO of Holy Cross Energy. The utility has plans to meet 20 percent of its power through renewable resources by 2015 — a goal more than twice as aggressive as statewide mandates for utility cooperatives in Colorado.

Clean Energy Collective (CEC) devised, promoted and developed the community-owned renewable energy installation, a specialty of the company, which itself is a member-owned cooperative venture focusing on building, developing and operating community-based clean energy stations. The El Jebel solar garden represents CEC’s first working model of a pathway to renewable energy it believes will spread like wildfire.

CEC predicts that the community solar breakthrough will increase regional solar adoption by 67 percent over the next five years.

The company has developed proprietary technology, known as RemoteMeter, that automatically calculates owners’ monthly credits and integrates with the utility’s billing system to ensure discounts are given easily and accurately for the renewable energy produced.

While the El Jebel community solar garden is the first of its kind in the nation, it is not the only solar garden on the way to Colorado. Two larger systems, a 900-kW system in Rifle and a 2-MW array near Vail, are already in the development or construction process. Upon completion, the Vail array will be the largest privately-owned solar installation in the state.

With power flowing from the El Jebel facility, community solar “gardening” is now officially a pathway to affordable solar power. But it also represents an opportunity for those typically left out of the solar movement — renters, condo residents or shaded homes — to adopt and save with solar energy, because the need to own a rooftop or large swath of land is now unnecessary.

Colorado and several other states have legislation or incentives that help promote community solar power, i.e. feed-in tariffs, net metering or equal eligibility under tax incentive programs, but support at the federal level would be ideal to facilitate a nationwide movement. For this reason, Colorado Senator Mark Udall introduced the Community Solar Gardens Bill in the U.S. Congress, which would legally allow homeowners to collectively install solar arrays in their neighborhoods; overriding any state legislation that may bar solar garden development.

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It’s that time of year again … no, not when turduckens appear on dinner tables nationwide and it becomes somehow acceptable to call the marshmallow a vegetable. It’s time for the 2009 edition of “Freeing the Grid,” an annual report card to states on their net metering and interconnection standards. Together, these two key policies empower energy customers (that’s you) to go solar and reduce your utility bills.

Although there is still plenty of room for improvement, this year’s report shows solid progress across most states—an indicator that these once-obscure policies are becoming accepted best practices. Oregon was this year’s star pupil. Meanwhile, there were still a number of states that didn’t even show up to class. Want to see if your state made the grade? Download 2009’s Freeing the Grid here from the report’s lead author, Network for New Energy Choices.

They may sound wonky, but net metering and interconnection standards are the backbone of a strong rooftop solar market.

Interconnection standards are the technical requirements and legal procedures that allow a customer-sited generator to “plug-into” the electricity grid. This interconnection process should be governed by a transparent, non-arbitrary set of provisions that facilitate rather than hinder connection to the grid. Customers of all sizes and types should be able to connect to the grid without any excessive hassle or cost. You may be shocked to learn that utilities can and do find ways to prevent customers from connecting their shiny new solar energy systems to the grid unless state policy offers those protections. Well, it’s true.

Net metering is a simple billing arrangement that allows solar customers to get fair credit for the excess electricity their systems generate during daytime hours. Imagine if you have a system on your home but you’re at work when the sun is shining – or at a school that’s closed during the summer months. Even though the lights aren’t on, those systems are still reliably cranking out clean, reliable electricity that the local utility is delivering to others in the community. Net metering allows system owners to bank that power and save it for a rainy day (perhaps literally) when they need it. Under best practices, 1 kWh generated by the customer has the exact same value as 1 kWh consumed by the customer. Furthermore, states should not place arbitrary limits on the system size or the total number of customers that are allowed to participate.

Folks we talk to are generally surprised to learn that these kinds of limits would exist at all. But they most certainly do. Here in California there is a cap on the program once total customer-owned solar installed in any utility territory reaches 2.5% of the overall load. Once that limit is reached, new solar customers no longer get the benefits of net metering. Solar’s proven so popular in Northern California that we’re on track to hit that cap as early as next year. With leadership from Governor Schwarzenegger, PG&E has opted to voluntarily raise the program cap to 3.5% to give the growing solar market some run time. You can bet we’ll be working to officially raise that cap even higher when the state legislature starts up again in early 2010. New York is another example of well-intentioned net metering program gone awry. In this case, the law is being interpreted in a way that prevents most commercial energy systems from participating. Not only does that impede the state’s growing solar market (and all those green jobs we hear so much about), but we think it’s downright unfair to energy customers who want to generate their own electricity.

We’re working hard to make these policy changes state by state, but it’s incredibly helpful to have folks like NNEC, IREC and DSIRE give state leaders tools for getting it right. This stuff is complex, it’s new to many, and it can be tricky to get right. Freeing the Grid provides an effective roadmap for navigating that great unknown and getting straight to effective policies that are going to build local solar markets.

And states are busy proving that with the right guidelines and committed policymakers those changes can be made quickly and effectively. Utah for example moved from a lacklust “F” in net metering to a stellar “A” grade in just two years. In total, Freeing the Grid 2009 reports 27 states with good (A or B) grades in net metering standards, up from 13 in 2007. Eight states (Alabama, Alaska, Idaho, Mississippi, South Carolina, South Dakota, Tennessee and Texas) still do not have statewide net metering programs. On the interconnection side, 15 states now claim A or B grades, a whopping improvement over the one state to receive a B in 2007.

Now that’s something to be thankful for.

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California, which has often led the nation in emissions reductions and environmental initiatives, is not the standard bearer in producing renewable energy today. If you consider all forms of renewable energy — solar, wind, hydro, and geothermal, then California isn’t at the top in total production, and as a percentage of energy produced, it’s not even in the top five.

Washington, with its longtime investment in hydropower, produced nearly 58 percent more renewable energy from electricity than California, according to 2007 data. In California, 25 percent of all energy produced comes from renewables, which is lower than Idaho (84 percent), Washington (77 percent), Oregon (65 percent), South Dakota (50 percent, Maine (49 percent) and Montana (34 percent). Note that this is electricity generated not consumed. Many of the upper Midwest states actually export energy, while California imports the most energy in the country.

California’s Go Solar program has been wildly successful during the past few years, but the state wants to add a feed-in tariff which would guarantee a price incentive for all renewable power that customers sell back to the grid. The California Public Utilities Commission is developing the FiT and is expected to announce its plan soon.

The Golden State is going back to the future is it first had the idea for a feed-in tariff for solar back in 1984. When the price of oil receded, the program was canceled, only to be copied with great success in Germany, Spain and elsewhere. The city of Gainesville, Florida was the first municipality in the U.S. with a FiT; California and Vermont are considering statewide programs.

The California legislature wants to expand the state’s net-metering program, which is about to run out of room. California currently requires utilities to buy solar from customers at its full retail rate for up to 2.5 percent of the utility’s peak demand. Under AB 560, which passed the Assembly in July and is now under consideration by the Appropriations Committee, would double the net-metering cap to 5 percent of peak power.

“Raising the cap would preserve those consumer rights and allow the state’s solar industry to continue generating jobs, economic opportunity, and clean electricity for years to come – that’s a prospect that’s good for all Californians,” said Adam Browning, the Executive Director of the Vote Solar initiative.

Expanding renewable power is just one of many major issues in the cash-strapped state, so it is encouraging that state leaders are finding the time and energy to address the issue. For the Golden State to be the Gold Standard in renewables, it has a lot of work to do.

Appearing courtesy of Matter Network.

[photo credit: Flickr]

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