Group Gives Texas an 'F' for Low Solar Power Incentives

The Network for New Energy Choices has issued its 2008 report cards grading state policies that allow farmers, homeowners, ranchers, and small business owners who generate renewable energy to connect to the grid and receive credit for the electricity they produce.

This year's "Freeing the Grid" report has a few bright spots: Americans' desire for energy independence and widespread concern about climate change. However, Texas serves as a cautionary tale of how even the best legislative intentions can be derailed by a poor regulatory process, according to the press release.

The "Worst Practices" section of "Freeing the Grid" tells how the law Gov. Rick Perry signed last year to promote net metering "as rapidly as possible," has been derailed by industry opponents.

"Net metering" is the standard term used for state provisions that allow customers to receive credit for the wind or solar energy they produce when they connect to the electric grid. Nevertheless, opponents of the Texas statute took advantage of the fact that the legislature did not include language defining "net-metering" in the bill they passed. As a result, Texas's net-metering law is currently interpreted in a way that removes some of the financial incentive, by not allowing people who install wind or solar systems to receive credit for the energy they produce.

"It's a shame. Texas could be a big solar market," said NNEC's James Rose, one of the primary authors of the report.

"Freeing the Grid" offers specific recommendations for the state to cure the current system. These include adopting the widely-used, model net-metering rules offered by the Interstate Renewable Energy Council. In addition, NNEC recommends that Texas protect people who generate their own renewable energy from expensive and unnecessary insurance requirements and increase the size of systems permitted to connect to the grid to 20 megawatts, which would give customers the ability to generate more electricity and thereby more quickly recoup their initial outlay for installation.

Arizona, Illinois, and Florida took major steps forward by creating new programs for homeowners and businesses that want to generate their own wind or solar energy, connect to the grid, and receive credit.

Nine states significantly improved their regulations for allowing people who generate their own renewable energy to receive credit. They are Arkansas, Kentucky, Massachusetts, Missouri, New York, Oregon, Rhode Island, Utah, and Vermont.

Six states and the District of Columbia significantly improved their standards for connecting renewable wind and solar systems to the local electric grid -- Maryland, New Mexico, North Carolina, Oregon, Pennsylvania, and Washington.

While the quality of net metering programs vary widely, today only 10 states are left without some type of statewide net metering program -- Alabama, Alaska, Idaho, Kansas, Michigan, Mississippi, Nebraska, South Carolina, South Dakota, and Tennessee.

The best state renewable energy policies are those that maximize credit for excess electricity sent to the grid, reduce unnecessary and burdensome red tape and special fees, set clear goals and targets, and provide incentives to encourage homeowners and businesses to install renewable energy systems. States that perform poorly have policies that discourage homeowners and businesses from investing in renewable energy systems, for example, by requiring well-established, proven technologies to undergo rigorous, time-consuming, expensive reviews that dramatically increase the costs of the systems and the amount of time it takes for them to pay for themselves.

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