It seems ironic, but the big win to extend the renewable energy tax credit in the federal budget deal last year may make state solar rooftop incentives more controversial. Or so suggests Greentech Media:
Many states were reviewing their net energy metering policies and programs while awaiting the ITC decision.
“The solar industry has gotten its holiday wish list,” Zach Pollock, also in PA Consulting’s energy and utilities practice, said of the ITC extension. “What that has done is put additional pressure on the state policies.”
For states with vertically integrated utilities that have been avoiding the policy considerations related to potentially robust third-party solar markets, “It’s going to be more about blocking and tackling,” said Mooren.
Nevada is the perfect example of the controversy, where the rollback of rooftop solar incentives, even for existing customers, has sparked a clean tech backlash and lawsuit, despite electric vehicle companies Tesla and Faraday locating in the state. And in California, which went the other way recently, opponents of rooftop solar incentives noted that the federal tax credit means states don’t have to keep subsidizing rooftop solar to the same extent.
Meanwhile, one industry may benefit from the net metering rollback: energy storage. Some analysts think Nevada’s new rules could push existing solar customers to buy on-site energy storage, like home batteries. That way customers could capture surplus solar power they produce and use it when the sun goes away. It would be a way to salvage their investment: otherwise the utility would no longer compensate them for the surplus, so it would be wasted.
In the long run, net metering incentives will have to ramp down, but the industry isn’t quite there yet. That’s why it’s important for solar advocates to keep the fight going state-by-state.