New York’s Green Energy Grade Rises from “D” to “B”
October 27, 2008
New laws mean businesses, farmers, and homeowners can connect to the grid and save
(Long Island, N.Y.) The Network for New Energy Choices (NNEC) has issued its 2008 report cards grading state policies that allow farmers, homeowners, and small business owners who generate renewable energy to connect to the grid and receive credit for the electricity they produce, provisions known as net metering. With net metering, when electric customers with wind or solar systems produce more energy than they use, their electric meters spin backward, providing them with a net gain.
“This year’s Freeing the Grid report has a number of bright spots that are particularly welcome given the declining economy, Americans’ desire for energy independence, and widespread concern about climate change,” said NNEC’s James Rose, a principal author of the report. “Chief among these is New York, singled out for praise in the report’s ‘Best Practices’ section for two new laws that vastly expand the ability of New Yorkers to net meter.”
While New York was one of the first states in the nation to establish net metering, in 1997, only a few very small systems were allowed to connect to the grid. Early this year, however, the governor’s Renewable Energy Task Force recommended expanding the law and the legislature quickly followed suit, with legislation that allows much larger systems to net meter and opens it up to all electric customers in the state.
In signing the legislation, Governor Paterson rightly noted, “There has never been a more important time than right now to significantly invest in renewable sources of energy.”
Congressman Jay Inslee of Washington State has called for a national commitment to renewable energy on par with the effort five decades ago to put a man on the moon. In his foreword to Freeing the Grid 2008 Inslee notes that well-designed state policies for renewable energy systems, “can read like ‘open for business’ signs to developers, manufacturers and innovative entrepreneurs. I encourage my fellow federal and state policymakers who want to realize a clean energy future to read this 2008 edition as a blueprint for how they can actively help to spur significant economic growth and energy security in their own states and communities,” Inslee said.
This month NNEC received a 2008 Special Recognition Award from the Interstate Renewable Energy Council (IREC) for its multi-year achievements with Freeing the Grid.
“NNEC has been a real mover, and has propelled interconnection and net metering into the spotlight. Freeing the Grid is leading us to greening the grid,” said IREC Executive Director Jane Weissman.
IREC’s Jason Keyes said, “Freeing the Grid has been an invaluable tool in state utility commission rulemakings. IREC makes a habit of handing out copies to commissioners and commission staff. Time after time, Freeing the Grid has opened a dialogue about the specific steps that can be taken to improve state rules. The classic moment was when a commissioner raised Freeing the Grid in the air at a workshop and said ‘We got a B last year and we’re going to get an A this year.’”
“If incentives are the engine that drives solar markets, net metering and interconnection standards are the road. Freeing the Grid provides policymakers with a map to sustainable solar development,” said Adam Browning, of The Vote Solar Initiative.
Other highlights since the 2007 edition of Freeing the Grid:
- Illinois, Arizona and Florida took major steps forward with new rules allowing customer-owned wind and solar systems to connect to the grid.
- In addition to New York, eight states significantly improved their existing regulations for allowing people who generate their own renewable energy to receive credit – Arkansas, Kentucky, Massachusetts, Missouri, Oregon, Rhode Island, Utah, and Vermont.
- Six states and the District of Columbia significantly improved existing standards for connecting renewable wind and solar systems to the local electric grid – Maryland, New Mexico, North Carolina, Oregon, Pennsylvania, and Washington.
In addition to grading states on their policies, Freeing the Grid serves as a cautionary tale of how even the best of intentions can be derailed by a poor regulatory process. The report’s “Worst Practices” section tells the sad story of Texas, which enacted a law designed to promote net metering “as rapidly as possible,” only to see it derailed by industry opponents.
While “net metering” is the standard industry term used for state law provisions that allow customers to receive credit for the wind or solar energy they produce when they connect to the electric grid, opponents of the Texas statute took advantage of the fact that the legislature failed to include language defining “net-metering” in the bill they passed. As a result, Texas’ 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.
While the law the Texas legislature passed has the potential to earn an “A” from NNEC, the state wound up with an “F” instead. “It’s a shame. Texas could be a big solar market,” said NNEC’s Rose.
While the quality of net metering programs vary widely, today only ten 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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