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

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)

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

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

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

www.dsireusa.org / March 2015 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 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 DC 6

www.dsireusa.org / March 2015 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 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 DC 7

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

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

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

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

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

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

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

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

DG Valuation Studies

Source: Rocky Mountain Institute

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

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

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

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

Community Solar Policy Trends State programs have different system size limits, program caps, and other requirements. State System Size Program Cap Colorado 2 MW Varies by utility DC 5 MW Unlimited Hawaii 3 MW (Oahu), 1 MW (others) Phase 1: 8 MW, Phase 2: 64 MW Maryland 200 MW Minnesota 1 MW New Jersey TBD by Board of Public Utilities New York North Carolina 40 MW Vermont 500 kW Virginia 50 MW

Credit Rate Description State Credit Rate Description Colorado Total aggregate retail rate Hawaii Phase I: Flat credit rates, based on mid-day rates Phase II: Time-varying credit rates Maryland Retail rate Minnesota Value of solar rate New Jersey TBD by Board of Public Utilities New York Value of solar rate (includes credit for energy, capacity, demand reduction, locational system relief value, and environmental value) North Carolina Avoided cost rate Oregon Value of solar rate (under development) Vermont Blended residential retail rate; all production is subject to credit adjustors (positive and negative) based on system size, site location, and REC ownership

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

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

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

Grid Modernization Activity Q1 2017-Q1 2018

Q1 2018 Grid Modernization Activity

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

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

Q1 2018 Action on Energy Storage, by Type of Action

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

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.

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!

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