Upload
others
View
1
Download
0
Embed Size (px)
Citation preview
i Effect of electricity bill on solar market in Wisconsin
STUDY: Residential Solar PV Market in
Wisconsin
Sai Mounika Chennamsetty
Mitch Brey (RePower Madison)
ii Effect of electricity bill on solar market in Wisconsin
ABSTRACT:
Currently, due to the day by day increase in electricity consumption, there is a greater
demand to increase its production. But electricity production from fossil fuels causes drastic
damage to the climate. In order to reduce this impact on the environment, alternate clean
technologies are being adopted. Solar power generation is a trending clean energy technology
whose continuous production and use do not affect the availability of future supplies or the
climate. But the cost of electricity produced by solar can be more than the cost of electricity
produced by conventional fuels, where the policies and incentives play key roles for robust
solar market. Therefore in this paper we tried to discuss about the current situation of
Wisconsin (WI) residential Solar PV market in two parts:
PART ONE:
In part one; we tried to discuss about the current situation happening all over the
country i.e., the effect of change in electric rate structure (increased fixed charges and
decreased variable cost charges) on the WI residential solar photovoltaic (PV) market by
calculating the payback period.
PART TWO:
In part two, we tried to analyze the general situation of WI residential solar PV market
by analyzing the state policies that affecting the residential solar PV market. Therefore we
compared with policies of some of northeastern states to get a clearer idea of how these
policies affect the residential solar PV market. We then tried to provide recommendations on
which policies could be adopted in terms of improving the residential solar PV market in WI.
iii Effect of electricity bill on solar market in Wisconsin
INDEX
List of Figures
List of Graphs
List of Tables
Introduction………………………………………………………………………………………………1
Technical potential of solar PV in the USA………………………………………………………….2
Small rooftop solar PV Technical potential in Wisconsin…………………………………….......3
Solar PV in Wisconsin……………………………………………………………………………..…...3
Residential solar PV in Wisconsin……………………………………………...…………...4
Part 1………………………………………………………………………………………...…………...4
Effect of Decreased Cost per KWh Charge on Solar Market…………………………….4
Electricity bill…………………………………………………………………………………...5
Electricity market in WI……………………………………………………………………….5
Case 1: MGE…………………………………………………………………………..6
Case 2: Alliant Energy………………………………………………………………..9
Case 3: WPSC………………………………………………………………………..10
Part 2…………………………………………………………………………………………………….10
WI solar policies………………………………………………………………………………10
Case study……………………………………………………………………………………...11
Case i: Maryland…………………………………………………………………….12
Case ii: New York……………………………………………………………………13
Case iii: New Jersey…………………………………………………………………14
Discussion………………………………………………………………………………………………15
Conclusion………………………………………………………………………………………………16
References……………………………………………………………………………………...……….17
iv Effect of electricity bill on solar market in Wisconsin
List of Figures:
Figure 1: Residential PV installations in USA through 2016 Q1 .............................................. 1
Figure 2: Technical potential of Solar PV in the United States ................................................ 2
Figure 3: Small building average relative production .............................................................. 3
Figure 4: Status of investor –owned utility proposals. ............................................................. 6
Figure 5: Wisconsin 2017 Solar Report Card ......................................................................... 11
Figure 6: Maryland 2017 Solar Report Card .......................................................................... 12
Figure 7: New York 2017 Solar Report Card .......................................................................... 13
Figure 8: New Jersey 2017 Solar Report Card ....................................................................... 14
List of Graphs:
Graph 1: Residential solar PV installed in Wisconsin by 2015 ................................................ 4
Graph 2: Payback period for approved MGE rates .................................................................. 7
Graph 3: Percentage change of Electricity Bill for approved rates of MGE. ........................... 7
Graph 4: Payback period for both approved and withdrawn rates. .......................................... 8
Graph 5: Electricity Bill for proposed costs of MGE. ............................................................... 9
Graph 6: Payback Period for Alliant energy rates .................................................................... 9
Graph 7: Electricity bill for given Alliant rates ......................................................................... 9
Graph 8: % change of Electricity Bill for Alliant energy rates ............................................... 10
Graph 9: Payback period for WPSC rates .............................................................................. 10
Graph 10:% change of Electricity Bill for WPSC rates .......................................................... 10
List of Tables:
Table 1: Electricity Rates by MGE ............................................................................................ 7
Table 2: Electricity Rates by Alliant .......................................................................................... 9
Table 3: Electricity Rates by WPSC ........................................................................................ 10
v Effect of electricity bill on solar market in Wisconsin
Abbreviations:
WI- Wisconsin
PV- Photovoltaic
MGE- Madison Gas & Electric
WPSC- Wisconsin Public Service Corporation
EIA- Energy Information Administration
GTM- Greentech Media
MW- Megawatt
GW- Gigawatt
kWh- kilowatt hour
RPS- Renewable Portfolio Standard
SREC- Solar Renewable Energy Certification
NREL- National Renewable Energy Laboratory
PSC- Public Service Commission
CUB- Citizen Utility Board
IL- Illinois
MI-Michigan
PA- Pennsylvania
NY- New York
NJ- New Jersey
MA- Maryland
SACP- Solar Alternative Compliance Payments
NYSERDA- New York State Energy Research and Development Authority
1 Effect of electricity bill on solar market in Wisconsin
INTRODUCTION:
The production of electricity using solar
energy is expanding rapidly across the
United States. It was projected by U.S.
Energy Information Administration (EIA)
that the USA could install 305 GW by 2030
and 737GW by 2050. According to
Greentech Media (GTM) Research, total
solar PV capacity reached 35.8 GW by Q3
2016, enough to power 6.5 million
American homes. Most notably, the US
solar market installed 4,413 MWdc in the 3rd
quarter 2016, of which more than 75% of
the installations came from the utility sector.
This was the largest quarter ever for the
solar market with total of more than 3GW.
However, when looking at only the
residential solar PV market, a significant
slowdown has been observed. (i.e. 10%
decreased from the 2nd quarter of 2016).
From the graph in Fig. 1, we can see that
there was a 23% growth in the residential
solar PV sector in 2016, but when it is
compared with the last four years, the
growth seems to be very slow. Some of the
reasons for the slow growth are:
1. According to the report given by the
SEIA, changes in the sales cycles in
mature state markets, such as California,
and challenges posed by rate design
reforms, such as the elimination of net
metering in Nevada, are reasons for the
shift1.
2. According GTM research, one of the
reasons for the slowdown in the
residential PV sector is due to lower
electric pricing (i.e. the cost per kWh)2.
Figure 1: Residential PV installations in USA through 2016 Q1
2 Effect of electricity bill on solar market in Wisconsin
From this, we clearly understand that a
robust residential solar market depends on
policies like federal tax credits, Renewable
Portfolio Standard (RPS), Rebates, net
metering, and electric rate structures.
TECHNICAL POTENTIAL OF SOLAR
PV IN THE UNITED STATES:
As defined by the NREL,
“Technical potential is a metric that
quantifies the generation available in a given
region from a particular technology; it
considers resource availability and quality,
technical system performance, and the
physical availability of suitable area for
development”5. The United States has the
“technical potential” to install enough solar
electricity capacity (including both solar PV
and concentrated solar) to meet 100 times
more than the nation’s electricity needs.
Each and every state has the “technical
potential” to generate more electricity from
the sun than it currently uses in an average
year4. As indicated in Fig. 2, 20 states have
the technical potential for enough PV
generation to exceed the annual electricity
consumption by a factor of 100 or more.
While coming to the rooftop solar PV,
according to the analysis done by the NREL,
the United States has a technical potential of
1,118GW of installed capacity, which is
equivalent to 39% of all electricity sales in
2013.Most noticeably the technical potential
for small building rooftop PV (< 5,000 ft2) is
731 GW of installed capacity, equivalent to
Figure 2: Technical potential of Solar PV in the United States
3 Effect of electricity bill on solar market in Wisconsin
65% of all rooftop PV’s technical potential5.
From the available solar resource maps, we
can see that solar resource vary from place
to place. For example, the southwest region
of the country receives a very good solar
radiation when compared to other parts of
the country. However, NREL shows an
analysis of the annual rooftop PV generation
of an average small building as a percentage
of each state’s average annual household
consumption (Fig. 3). To specify, it suggests
that offsetting a significant amount of
residential sector consumption does not
preclude due to relatively poor solar
resources5.
Small rooftop solar PV Technical
potential in Wisconsin:
According to NREL’s analysis, WI
is one of the top nineteen states which have
a good small building average relative to
production at the state level. It can also
generate 25% or more of their annual
electricity consumption. Furthermore, WI
has the technical potential to offset 27.6% of
its annual electric sales through small
rooftop solar PV (i.e. 16.3 GW could be
installed).
SOLAR PV IN WISCONSIN:
As shown in the Fig. 2, WI has the
technical potential to generate about 25 to
100 times more electricity from all solar
resources than its consumption. However,
WI had only a total installed solar energy
capacity of 27 MW by 2015. It is expected
to add only another 141 MW of solar
electric capacity over the next five years.
Figure 3: Small building average relative production
4 Effect of electricity bill on solar market in Wisconsin
Whereas according to NREL’s analysis, WI
could provide 35.5% of its electricity use,
simply by installing solar panels on all
suitable rooftops.
Residential solar PV in Wisconsin:
Residential solar PV is systems
installed on residential buildings, typically
featuring a capacity of about 5 to 20 kW and
are generally installed on rooftops.
According to the NREL’s analysis as
discussed above, WI is one of the top 20
states with good technical potential capacity
in small rooftop solar PV (i.e. 16.3 GW can
be installed), but it is nowhere near the limit
of small roof top solar PV capacity that can
be installed. Based on data collected from
the public service commission of WI, the
cumulative capacity reached only about 9
MW by 2015 as shown in the graph 1.
PART 1:
Effect of Decreased Cost per KWh
Charge on Solar Market:
Despite having abundant solar
technical potential, only 1.35% of the total
U.S electricity was generated using solar PV
by 2015. The main reason for this is the cost
of electricity per unit. Generally, the average
cost of electricity of solar PV is expensive
compared to the cost of electricity produced
by conventional sources like coal, nuclear,
etc. This is because ratemaking calculations
do not include all costs (health,
environmental, and social justice).
However, when we compare costs within
the solar PV sector, we see that utility scales
of solar PV systems are more efficient and
cost less per kWh compared to the
residential scale solar PV systems6. This is
mainly due to large arrays where tilt and
Graph 1: Residential solar PV installed in Wisconsin by 2015
5 Effect of electricity bill on solar market in Wisconsin
orientation of panels are controlled to
maximize production. Residential sector
systems are small and usually have a fixed
position. One of the main drivers for solar in
the residential sector is to reduce the
electricity bill and save enough money to
pay down the initial investment within the
lifetime of the system, which is simply
known as the payback period. Therefore,
investments in solar PV systems with faster
payback periods are more attractive to
customers. The calculation of payback
period for any rooftop solar PV includes
three basic steps:
i. Calculating system costs
ii. Calculating system savings
iii. Calculating system payback
System costs in residential sector
mainly consist of components’ cost and
installation costs, which can be decreased
with incentives, such as 30% tax credit and
rebates provided by state and federal
governments. However, the payback does
not depend only on solar system cost. It also
depends on the cost per kWh that is paid to
the grid by the customer, as this is the
money that can be saved by installing solar
PV systems on the rooftops.
Electricity Bill:
As disscussed above, payback period
for a residential solar PV has a strong
correlation with the cost paid to the grid by
the customer (i.e. their electric bills).
Generally, the electricity bill is divided into
two different costs :
i. Fixed charges
ii. Variable costs
Fixed charges are the amount which
must be paid by the customers irrespective
of the power that they consumed. It is set
during ratemaking by the Public Service
Commission (PSC). For example, the fixed
charge is the same for customers using 250
kWh as it is for customers using 1000 kWh.
On the other hand, the variable cost is the
amount charged per unit (kWh) used by
customers. As variable cost depends on how
much energy that customers consumed, they
can have some control over variable costs.
Electricity Market in Wisconsin:
In 2015 many power utilities all over
the United States began to propose hikes in
fixed rates and decreases in volumetric rates
(cost per kWh). In simple terms, the
customer has to pay his/her fixed portion of
the bill irrespective of consumption. The
higher the fixed cost, the lower the value of
Units (kWh) conserved or generated by the
customer. This decreases the incentive for
the energy efficiency measures
(conservation) as well as clean energy
generation techniques like installing solar
PV on rooftops. Higher fixed costs are
favored by the utilities because it keeps the
6 Effect of electricity bill on solar market in Wisconsin
utilities on the safe side of consistent
revenue collection.
Many of these rate proposals were
rejected by state utility commissions.
“Rejection rates have remained fairly steady
over 2015 and 2016, with 85% of fixed fee
increases rejected or scaled back in 2016
and 91% disallowed or dialed back the year
prior18”
Figure 4: Status of investor –owned utility proposals.
Once, WI was considered a
Midwestern leader in progressive regulation,
but unfortunately, during the last three years
the Wisconsin Public Service Commission
granted substantial hikes in fixed charges
with an average increase of about 66%. For
example, some of the major power utilities
in WI like MG&E and WPS increased their
fixed rates from $10.44 in 2014 to $19 in
2015 and $10.40 in 2014 to $19 in 2015
respectively. At the same time, variable cost
was decreased from 14.4 cents per kWh in
2014 to 13.4 cents per kWh in 2015 and
11.143 cents per kWh 2014 to 10.267 cents
per kWh in 2015 respectively. The kWh
rates were further reduced in 2017 as shown
in the tables 1, 2, 3. Alliant Energy followed
the same trend in 2016.
As we discussed above, while
keeping the system cost constant, the
payback mainly depends on variable cost (if
the cost per kWh increases the savings per
month will increase and if cost per kWh
decreases the savings per month will
decrease, which further increases the
payback period).
In this paper, we tried to calculate
the payback period for the electric rates
offered by different utilities of WI along
with some considerations to figure out the
effect of decreased cost per kWh on payback
period. We have calculated the payback
period for a 5 kW system which would
power an average WI household (an average
electricity consumption of 703kWh/month).
CASE 1: MGE (Madison Gas & Electric)
MGE is the Wisconsin’s smallest
investor-owned utility, providing electric
power to about 141,000 customers in
Madison and the surrounding area. In 2015,
MGE proposed a drastic change in its rate
structure by shifting a major portion of the
electric bill from cost per kWh to fixed
costs. Its intent was to maintain financial
stability. The result of this change approved
by the PSC is shown in the Table 1.
7 Effect of electricity bill on solar market in Wisconsin
2014 2015 2016 2017
Fixed cost 10.44 19 19 19
Cents/kWh 0.144 0.134 0.134 0.134
Table 1: Electricity Rates by MGE19
From the rates available, we
calculated the payback period for an average
household with an average consumption of
703 kWh/month and 5kW rooftop solar PV
system as shown in the below graph.
Graph 2: Payback period for approved MGE rates
From Graph 2, we can clearly
observe that the payback period increased
with the decrease in variable cost ($/kWh).
The savings, which an individual can make
by using solar PV, decreased. This change in
payback period may not make a lot of
difference for commercial and industrial
customers, but it makes a lot of difference
for the residential low electricity consumers.
This can be clearly observed in
Graph 3, which compares the change in the
electric bill paid to MGE by a customer who
completely depends on the grid with a
customer who installed rooftop solar PV
with capacity of 5 kW to offset around 70%
of their electric consumption (each
household is assumed to have a
consumption of 703 kWh/month and it was
assumed that average US residential solar
PV system of 5 kW produces 500
kWh/month. Therefore, when coming to the
average electricity consumption of 703 kWh
per month, 203 kWh is generated from the
solar PV system and the remaining i.e., 703-
500=203 kWh is drawn from the grid.)
Graph 3: Percentage change of Electricity
Bill for approved rates of MGE.
From Graph 3, the percentage
increase of an electric bill in 2015 was more
for a customer who had rooftop solar PV
(who consumes less power from the grid
because a major part of electricity is
produced from the solar PV system). The
major reason for the greater increase for PV
households is the sudden increase in the
fixed costs in 2015. The PV household is
still connected to the grid in order to get the
rest of its electricity. This PV household
8 Effect of electricity bill on solar market in Wisconsin
now pays a higher fixed charge which is
now a greater part of the bill since it is
paying a lot less for the kWhs consumed.
However, when compared to the customer
who completely depends on grid power, the
major part of its bill comes under variable
cost which makes the percentage less
increase in the total electric bill. Since this
has an effect on the payback of a PV system,
it will discourage customers from investing
in any kind of distribution system.
Initially, MGE submitted a proposal
in June 2014 to further raise its fixed cost to
$48 in 2016, and $67 by 2017 whereas
variable cost is decreased to 7 cents /kWh in
2016 and 3 cents/kWh in 2017 respectively.
However, due to the strong opposition from
citizens, local governments, and interest
groups, MGE and the PSC modified the
initial proposal as shown in the table 1.It
was also part of an agreement between the
MGE and the Wisconsin Citizen Utility
Board (CUB).
But proposals for hikes in fixed costs
haven’t stopped. To show the effects of
further, we analyzed increases in fixed costs
in the effect of increase in fixed costs on the
solar market by calculating the payback
period for both 2016 and 2017 if the rates
initially proposed by MGE were approved.
Graph 4: Payback period for both approved
and withdrawn rates.
From Graph 4, we can see the
paybacks for MGEs initially proposed rates
would have been very high when compared
to payback period for the approved rates. As
we discussed above, the payback calculation
depend greatly on cost per kWh, the amount
you can save on your monthly bill. But,
when coming to the fixed cost part, it can’t
be saved unless you completely disconnect
from the grid. If you are connected to the
grid you have to pay the fixed charges
irrespective of your consumption. From the
discussion above, it is clear that if the fixed
costs are raised and cost per kWh decreased,
there is a major impact on the payback
period for PV installations.
From the Graph 5, we can clearly
observe that if the rates proposed by MGE
had been approved, the difference in the
electricity bills of household with solar PV
and households which completely depends
on grid power would have decreased year by
year.
9 Effect of electricity bill on solar market in Wisconsin
Graph 5: Electricity Bill for proposed costs
of MGE.
To be more specific, if $67 for fixed
rates and 3 cents/kWh were approved, the
average residential household without PV
would have paid $88 monthly. If they had
solar PV on their rooftop, it would have
been $73 or only $15 less. So obviously,
based on $15/month savings, one would not
select solar PV or any clean energy to
replace conventional energy. This would
affect the solar market drastically.
CASE 2: Alliant Energy
Alliant energy set a different
example by slightly increasing its cost per
kWh, but almost doubling its fixed charge
from $7.67 in 2016 to $15 in 2017. As
shown in the Table 2, the payback period
slightly decreased from 2016 to 2017 as
shown in the below Graph 6.
2016 2017 2018
Fixed cost 7.67 15 15
Cents/ kWh 0.11458 0.11663 0.11663
Table 2: Electricity Rates by Alliant19
Graph 6: Payback Period for Alliant energy rates
The increase in the fixed charges
may not affect the payback period directly,
but it does affect the cost paid to the grid by
the customer as shown in the Graph 7.
Graph 7: Electricity bill for given Alliant rates
From the above Graph 7, we can see
that the savings that one can get is almost
the same, but the electricity bill is increasing
as the fixed charge is increasing. If this
scenario continues and the fixed charge
continues to rise, then even customers with
distribution generation, like rooftop solar
PV and wind energy, have to pay higher
electricity bills. This may discourage the
customer to go clean because at one point
10 Effect of electricity bill on solar market in Wisconsin
the saving would be too small when
compared to the bill paid to the grid.
Graph 8: % change of Electricity Bill for
Alliant energy rates
CASE 3: WPSC
As we discussed above, the fixed
rates were almost doubled from 2014 to
2015 and were further increased in 2016
while the variable cost decreased. As shown
in Graph 9 the payback period would
increase.
2014 2015 2016
Fixed cost
10 19 21
Cents/ kWh 0.11143 0.10267 0.09933
Table 3: Electricity Rates by WPSC19
Graph 9: Payback period for WPSC rates
Graph 10: % change of Electricity Bill for
WPSC rates
From Graph 10, it is clear that the
percentage change scenario is similar to the
MGE percentage change scenario.
Discussion:
From the above three cases we can
observe that high electric rates are very good
for residential solar PV market. However
it’s only possible when the fixed rates are
decreased and variable costs are increased.
PART 2:
WI Solar policies:
As we discussed earlier in Fig 2, WI
is one of the 20 states with a good small
building average relative to production at the
state level and can generate 25% or more of
their annual electricity consumption. In
other words, Wisconsin has the technical
potential to offset 27.6% of its annual
electric sales through small rooftop solar PV
(i.e. 16.3 GW could be installed). However
the cumulative capacity of WI reached was
11 Effect of electricity bill on solar market in Wisconsin
only about 9 MW by 2015, as shown in
Graph 1, which is nowhere near the
technical potential that can be installed. This
can be improved by using some generous
energy policies, but, unfortunately, WI is
lagging behind which can be clearly
observed from Fig 5.
Figure 5: Wisconsin 2017 Solar Report Card12
The average residential electricity
rate (13.19 cents/kWh) in WI is 11.03%
greater than the national average residential
rate (11.88 cents/kWh), which ranks the
state 14th in the nation7. WI offers a decent
solar electric (PV) rebate of 12% of the
installed cost, with a maximum of $2,000
for residential customers8. Other than this
there aren’t any good solar energy policies
in WI, such as net metering policies, solar
carve-out, tax credits, and RPS law for
robust residential solar market in WI.
Therefore, we tried to compare the WI solar
polices with some of the north-eastern states
which are having more or less similar
technical potential as WI do.
However, according to the NREL’s
research, along with technical potential
policy making decision depends on variety
of non-policy factors, which includes state
physical, economic, and demographic
characteristics. As this factors may not
directly related to solar PV installations, but
that might impact whether the state had a
favorable or unfavorable climate for
investment in behind-the-meter PV.
According to the NREL’s analysis , 6 north-
eastern states (IL, MI, PA, NY, NJ, MA) are
having similar non-policy factors as and
good for investment in behind-the-meter PV
as WI do9.
Case Study:
In this analysis, we tried to analyze
solar energy policies of New York, New
Jersey, and Maryland that are national
leaders in solar energy, telling which
12 Effect of electricity bill on solar market in Wisconsin
policies might fit for WI and can be adopted
for robust residential solar market (PV) in
Wisconsin.
Case i-Maryland:
Maryland is one of the country’s
most successful solar stories since 2008.
Maryland had installed about 465 MW of
solar capacity by early 2016; most of it is
behind-the-meter PV. To be more specific
about 44.77% (249.5 MW) of installed solar
capacity is in residential sector (<20). The
major reason for this robust residential solar
PV market is nothing but the very good
energy policies of Maryland10.
Figure 6: Maryland 2017 Solar Report Card
• Maryland has nation’s 6th best
solar carve-out12. In 2004, Maryland
legislature first enacted a RPS which
was amended several times since
then. The 2007 amendment to the
RPS requires utilities to draw at least
2% of that electricity from solar
power by 2022. In April 2016, the
requirement for renewably sourced
generation for all electricity sold in
Maryland was increased from 20%
to 25% in which 2.5% should be
from the solar energy, up from 2%
by 202211. As a result of this,
1500MW of solar power was
projected by 202212.
• Maryland has nation’s 9th best
performance payments under which
homeowners are rewarded either
with per-kWh bonuses or SRECs for
the electricity generated by the
panels. Utilities buy these SRECs
from homeowners to meet their solar
carve-out limit to avoid the Solar
Alternative Compliance Payments
(SACP) (start at $400 per MWh).
This is what gives the value for
SRECs12. The more the price of
SRECs increases, the payback period
13 Effect of electricity bill on solar market in Wisconsin
decreases which in turn increases the
solar market. In Maryland, SRECs
prices are pretty high (averaging
$167.5) and stable for the past few
years which lead to the robust solar
market. Unfortunately, the SRECs
prices are $22 per SREC due to the
oversupply in the PV market. This
results in the boom bust cycles in
solar market.
• Along with this Maryland is also
having good net-metering and
interconnection policies.
Case ii-New York:
New York is an eastern state with
considerable amount of solar potential,
which is far less when compared to
south-west states. However, New York
has consistently been in the top 10 US
solar markets. The cumulated solar PV
capacity that installed in NY was 685.73
MW by 2016 in which 493.73 MW was
added only by residential sector. This is
achieved with the help good policies as
shown in Fig. 7 and the very good
financial incentives offered to residential
and commercial solar PV by the New
York State Energy Research and
Development Authority (NYSERDA).
Figure 7: New York 2017 Solar Report Card
There are three main incentives that make
going solar best in New York as follows:
• The Megawatt Block Incentive
Structure: “The NY-Sun Incentive
Program offers incentives to help to
reduce the installation costs
associated with solar electric systems
up to 25 kilowatt (kW) for
residential customers13”.
14 Effect of electricity bill on solar market in Wisconsin
• Net energy metering: New York has
great net metering rates.
• New York State’s Solar Equipment
Tax Credit: with the help of these tax
credits one can reduce their state tax
payments by up to $5,000 or 25% of
total solar energy expenses.
The great advantages of the
Solar Equipment Tax Credit are
that:
1) Even it applies to the leased or
PPPA solar system.
2) If tax liability isn’t large enough to
claim the entire credit in the first year,
it can be roll over into the next year14.
Case iii-New Jersey:
Due to the strong solar market in 2016,
New Jersey (NJ) stood 4th nationally behind
California, North Carolina, and Arizona for
the installed capacity. However, unlike these
three states, more than 3/4 of NJ’s installed
capacity is behind the meter16.To be more
specific, around 76.7% of installed capacity
comes from the behind the meter in which
34% comes from residential and 50% from
commercial sector15. NJ reached 2 GW of
installed solar capacity by April 2017 of
which 557.5 MW is from residential
sector15. The main reason for this leadership
is NJ State polices.
Figure 8: New Jersey 2017 Solar Report Card
• NJ has some of strongest RPS
requirements in the country. The
RPS requires utilities to make sure
that 20.8% of the electricity each of
them sell should come from
renewable energy resources by
202112.
• NJ has nation’s 3rd best solar carve-
out12. The utilities require to, make
sure 4.01% of electricity each of
them sell should come from the
solar by 2028.In order to meet these
requirements utilities buy SRECs
from solar power producers. As we
discussed earlier, SRECs result in
15 Effect of electricity bill on solar market in Wisconsin
boom-bust cycles in solar market.
The same thing happened with the
NJ solar market. However, SRECs
have certainly been a big part of NJ
leadership position17.
• NJ also has great net metering and
interconnection policies as shown in
the Fig. 8.
Discussion:
As discussed earlier, WI has same
capacity to install solar power as New York,
New Jersey, and Maryland do. However
compared to great energy policies, these
three states are national leaders, Wisconsin
is nowhere near them. From case i and case
ii, it is clear that policies, including solar
carve–out, SRECs, net metering, and third
party solar options played a key role in rapid
growth of residential solar market in
Maryland and New Jersey. On other side,
New York do not have any good solar carve-
out policies, but incentives offered by NY-
solar, net metering policies, and third party
solar options made New York as one of the
best places for residential PV in country.
When coming to Wisconsin solar
energy policies, there are no specific solar
carve-out, net metering policies, or
incentives. These WI policies can be
improved to see better results as in the above
three states. Even when coming to the third
party option which is one of the important
drives for solar market is not clear whether it
is legal or illegal in Wisconsin
Conclusion:
Part one:
• As discussed earlier, electric rate is a
very important driver for solar
market. To specify, solar market
increases when electricity prices in
that particular region are high.
However, high electric prices should
be in the form of high variable costs
($/kWh), so that customers can have
more control over the bill and can
payback the solar PV system costs as
soon as possible.
Part two:
• As discussed earlier, solar carve-out,
SRECs, net metering and third party
solar are some of the best options
which have been adopted by different
states and shown good results.
Therefore even WI government could
adopt these policies to see good
results.
16 Effect of electricity bill on solar market in Wisconsin
References: 1. “US Solar Market insight report 2016” GTM Research and Solar Energy Industries
Association’s (SEIA), December 2016 edition.
http://www.seia.org/news/its-‐largest-‐quarter-‐ever-‐us-‐solar-‐market-‐saw-‐nearly-‐2-‐mw-‐pv-‐
installed-‐hour-‐q3-‐2016
2. Eric Wesoff “Slideshow: Why 2016 is Weirdest Year for US Solar,” Greentech
Media, 25 October 2016.
https://www.greentechmedia.com/articles/read/the-‐weirdest-‐year-‐for-‐us-‐solar#one
3. https://insideclimatenews.org/news/24052016/solar-‐energy-‐27-‐gigawatts-‐united-‐states-‐
one-‐million-‐rooftop-‐panels-‐climate-‐change-‐china-‐germany
4. Judee Burr and Lindsey Hallock “The Growing Role of Solar Energy in America,”
Environment America Research & Policy Center, Page 6, November 2014.
5. Pieter Gagnon, Robert Margolis, Jennifer Melius, Caleb Phillips, and Ryan Elmore
“Rooftop Solar Photovoltaic Technical Potential in the United States: A Detailed
Assessment,” National Renewable Energy Laboratory, page 25, January 2016.
6. Arduin, Laffer & Moore Econometrics “The High Cost of Rooftop Solar Subsidies,”
Institute for Energy Research, page 2, October 2016.
7. http://www.electricitylocal.com/states/wisconsin/
8. DSIRE, http://www.dsireusa.org/
9. D. Steward, E. Doris, V. Krasko, and D. Hillman “ The Effectiveness of State-Level
Policies on Solar Market Development in Different State Contexts’, National
Renewable Energy Laboratory, page 3-5, Feb 2014.
10. “MARYLAND SOLAR— AN INDUSTRY AT THE CROSSROADS”, page 3,
October 2016.
http://timberrockes.com/pdfs/USPV-MDsolar-crossroads-1016.pdf
11. “Maryland State Energy Profile”, US Energy information Association, 21 July
2016.https://www.eia.gov/state/print.php?sid=MD
12. https://solarpowerrocks.com/
13. https://www.nyserda.ny.gov/All-Programs/Programs/NY-Sun/Project-
Developers/Residential-Small-Commercial-MW-Block
14. “New York State’s Solar Incentives some of the best in the country”, Energy
sage.http://news.energysage.com/solar-incentives-in-new-york-state/
17 Effect of electricity bill on solar market in Wisconsin
15. “Solar Installation Report”, board of Public Utilities State of New Jersey.
http://www.njcleanenergy.com/SRPREPORTS
16. “New Jersey reaches 2GW of installed capacity”, PV Magazine.
https://pv-magazine-usa.com/2017/01/19/new-jersey-reaches-2-gw-of-installed-solar/
17. http://costofsolar.com/new-jersey-solar-incentives-new-jersey-solar-facts/
18. Samantha Williams “They’re Ba-ack… But Fixed Fee Hikes Still Getting Nixed”, 13
Feb 2017.
https://www.nrdc.org/experts/samantha-williams/theyre-ba-ack-fixed-fee-hikes-still-
getting-nixed
19. Public service commission.
http://apps.psc.wi.gov/vs2010/electricbill/content/reportcriteria.aspx