As Solar Grows Faster, Policy Speed Bumps Need to be Cleared

It’s official: According to the just-released annual review from the Solar Energy Industries Association (SEIA), 2021 was another great year for solar power.  The best ever, in fact.  And 2022 looks strong as well, with 22 gigawatts (GW) of new solar installations on tap across America.

Source:  U.S. Energy Information Administration

But just as solar is breaking into the lead in clean power production, policy speed bumps are appearing along the way.  These need to be cleared – both at the local and national level – if clean energy goals are to stay on track, which includes tripling the nation’s solar power production over the next 10 years.

Record Year for Solar Power

First, let’s recap the good news in the SEIA annual review.  Solar power hit these historic milestones in 2021:

  • Solar accounted for 46% of new U.S. generating capacity additions, topping the list for the third year in a row.  Cumulative installed capacity reached 100 GW for the first time.  
  • Residential solar also set a record, with 500,000 installations creating 4.2 GW of new U.S. generating capacity – the equivalent of four large nuclear power plants.  Nearly 5% of all owner-occupied homes in America now are equipped with solar power.
Source:  Solar Energy Industries Association

Total solar generation grew 25% in 2021, more than four times its 2015 production, reaching a record 3.9% share of the U.S. electricity mix.

Solar is growing nationwide, across red and blue states alike.  For the first time, Texas topped California in terms of new installed capacity, surging 77% last year.  

New Hampshire
Source:  Solar Energy Industries Association
  • New Hampshire and Vermont fell into the bottom half of these state rankings and they have some of the lowest rates of projected growth in future solar installations.  Vermont is among just a few states where the rate of solar capacity additions has been falling in recent years, thanks to decreasing incentives driven by highly effective lobbying by public utilities.
Vermont
Source:  Solar Energy Industries Association

Solar Policy Speed Bumps

So, what policy speed bumps are impeding the future growth path for solar power?  Consider: 

  • In Congress, President Biden’s Build Back Better plan faces significant challenges.  Now a critical policy element is to extend solar investment tax credits due to expire at the end of next year.
  • There is also an ongoing investigation into solar panels imported from Southeast Asia to see if they are circumventing tariffs placed on Chinese solar companies.  With U.S. manufacturers’ solar production already committed through 2024, U.S. solar installers rely on imported panels to meet surging customer demand.  Now, three-quarters of U.S. installers (surveyed by SEIA) say deliveries of imported panels are getting delayed, and some big utility-scale projects are being pushed back into 2023.
  • At the state level, utilities are steadily cutting back on payments made to solar producers via net metering.  This includes Vermont, which cut its solar tariff rate twice in 2021 and now is recommending another cut later this year.  In fact, the Vermont Department of Public Service is proposing what amounts to an outrageous 39% tax on self-consumed solar energy, in the face of climate change, rather than taxing carbon.

Setting the Right Policy Signals

While there is plenty to divide public opinion over future energy policy, SEIA and other solar policy advocates believe there are some common principles that can guide future electrification of America.  These four top our list:

  1. Solar, wind and other distributed energy resources need to be integrated into the grid to make it greener, more reliable, and less vulnerable to future price shocks, cyberattacks and weather-related power outages.
  2. Utilities need to provide real-time pricing and smart meters that enable distributed power to curb peak loads on the grid and reduce costs of new transmission-related infrastructure.
  3. States should adopt performance-based utility regulations that measure and incentivize progress toward these goals.  New York’s Reforming the Energy Vision initiative, for example, rewards utilities for greater adoption of distributed energy resources as well as more accurate, real-time pricing schemes that achieve higher levels of customer satisfaction.
  4. Most of all, electricity markets need to formally recognize the full range of benefits that distributed energy resources, storage technologies and demand-response programs bring to promoting energy efficiency, reducing generating costs, increasing system reliability and building resilience into the nation’s power system – all while cutting greenhouse gas emissions to fight climate change.     

We’ll dive further into local policy issues in future posts.  Meanwhile, in this important election year, don’t forget that the power is in your hands to make a difference! 

Solaflect Energy is your home energy management partner.  We help you install clean and affordable solar electricity and home battery systems for a more resilient and climate-friendly future.  Contact us at info@solaflect.com, or call (802) 649-3700. 

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