The Most Important Policies for the Continued Growth of the Solar Industry

It is an undeniable fact that solar power generation has taken off in the United States in recent years and that its rapid success is due to a series of policy changes that have been established in certain states. California stands out as one of the most solar friendly states offering a plethora of incentives to utilities and customers to invest in distributed solar. However, many other states, including Indiana, pale in comparison. 

While looking at solar as a mechanism to curb the affects of climate change and create a sustainable future has been inspiring, the real drivers for the success of solar are as follows: net energy metering, solar access laws, interconnection agreements and a renewable portfolio standard that sets minimum requirements for solar installations thus generating demand. Without these policies, it becomes virtually impossible for customers to purchase distributed solar at a fair price regardless of their desire to do so (Utility Dive). The renewal of the Federal Solar Incentive Tax Credit in 2015 will provide ample support at the federal level until 2019 at the very least. However, many states such as Alabama, Florida, Georgia, Indiana, Michigan, Oklahoma, Tennessee, Texas, Virginia and Wisconsin need to increase the quality and frequency of local policy incentives for solar installations to match their solar output potential based on the climate characteristics of those states mentioned.

credit: http://www.biologicaldiversity.org/programs/population_and_sustainability/energy/pdfs/ThrowingShade.pdf

credit: http://www.biologicaldiversity.org/programs/population_and_sustainability/energy/pdfs/ThrowingShade.pdf

Another set of policies not yet implemented in the United States that have been the cause of massive solar installation growth are a cap and trade system in the EU and a carbon tax in Scandinavia. The two policies are different but similar in that they both put a price on carbon (the cap and trade is a market price and the carbon tax is set by the regulators). Just this past Sunday (May 8th), Germany was able to generate 55 GW of their 63 GW  peak demand from an arsenal of renewable energy sources including wind, solar, hydro and biomass (QUARTZ). This great feat is due in large part to the implementation of the policies (or variations of them) mentioned above.