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The Top States in the U.S. for Solar

A recent report from the Environment America Research & Policy Center identified the top U.S. states for solar energy, ranked by criteria ranging from new and cumulative installed capacity to electrical generation to solar-friendly policies.

The top states in order of ranking are: Arizona, Nevada, Hawaii, New Jersey, New Mexico, California, Delaware, Colorado, Vermont, Massachusetts, North Carolina, and Maryland. They share some important characteristics, including renewable electricity standards with carve-outs for solar, strong statewide interconnection and net metering policies, and accommodations for creative financing options such as third-party ownership and property assessed clean energy financing.

Many of these states also share some challenges, which are described in the Solar Energy Industries Association’s (SEIA) second-quarter report:

  • Net metering. Utilities and grid operators continue to struggle to understand and embrace increasing amounts of “behind the meter” power generation, fairly valuing distributed generation and ensuring grid reliability. Earlier this year, a report found that solar net metering in
    Vermont is a net-positive for the state, following similar conclusions in California, New York, and Texas. California’s just-passed AB 327 includes some amendments to address concerns about net metering caps. Net metering also is a central issue in Arizona, causing uncertainty in a state that’s seen soaring solar growth the past few years. In Colorado, a proposal filed this summer by Xcel evaluating distributed generation “has raised some eyebrows,” notes Carrie Hitt, SEIA’s senior VP for state affairs. Other states, including Louisiana and Texas, are exploring the issue, and will likely take some cues from the aforementioned states.

Market growth for non-residential solar. While residential solar PV and third-party ownership have taken off, growth in commercial solar has lagged, shrinking 11 percent in the first half of this year compared with the same period a year ago, according to SEIA. The group suggests New York and California will need to take the lead on growth in this sector in the coming months.

Meanwhile, utility-scale solar, largely centered in California and Arizona, has seen a slowdown in utility procurements, SEIA said. Current PPAs
were driven largely by state RPS requirements, which are already in sight, Future PPAs need to emphasize cost-competitiveness, and we’ll see to what extent utilities will step up to embrace centralized utility-scale solar.

Looking ahead, what does the statewide landscape look like for solar energy? SEIA’s Hitt offers some highlights:

In the East, Massachusetts has hiked its solar goals (1600 MW by 2020) and currently is figuring out the framework structure to support that growth. New York had exhausted most of the funds for its current program, though longer-term the state shows promise.