The Dazzling Dozen

a guest post by Ken Whiteside, Director of Business Development at ONTILITY, LLC.

The Dazzling Dozen

2012 was a record-breaking year for solar installation in the U.S. and according to a report issued by the Environment America Research & Policy Center (EAC), 2013 could end up being an even bigger year. Among other statistics, the EAC reports that already in 2013 the US has three times as much installed solar capacity as it did in 2010, and 10 times as much as in 2007. In addition, during the first three months of this year, solar PV accounted for almost 50 percent of all new electricity generation capacity. Of the many factors that impact the solar market, two are widely recognized as significant drivers at a macro level: plummeting PV panel prices - more than 80 percent in the past five years and rising electricity prices tracking closely the increasing cost of natural gas.

If these two factors were the only influencers, we’d expect to see uniform solar growth nationwide. But that’s not the case. The EAC report points out that roughly 85 percent of installed solar capacity comes from only 12 states: Arizona, California, Colorado, Delaware, Hawaii, Maryland, Massachusetts, Nevada, New Jersey, New Mexico, North Carolina, and Vermont – the “Dazzling Dozen.” These states represent only 28 percent of the country’s population and approximately 21 percent of total electricity consumption. So why have they captured such an overwhelming majority of the solar market?

Its logical to see why big, sunny states like California and Arizona are among to top twelve, but what about smaller, not-so-sunny states like Vermont and Delaware? Why, for example, is Maryland included when Florida and Texas – states unable to match the 74MW of new solar capacity that Maryland brought online in 2012– aren’t on the list?

A big part of the answer has to do with public policy.

EAC's report cites a striking correlation between statewide solar policies and market growth. Examples include:

  • Robust net metering programs, paying solar electricity producers fairly for power they feed back to the grid
  • Straightforward interconnection policies that eliminate hurdles and headaches for installation contractors and consumers
  • Statewide renewable energy standards that provide predictable market conditions making solar attractive to investors
  • Well-structured and easily understood Power Purchase Agreements and leasing programs
  • Solar on government buildings as a way of leading the market by example

Statewide renewable energy policies help to not only lower the initial cost of solar energy systems, but they also increases the lifetime ROI of new PV installations. When legislation establishes consistent, predictable, long-term conditions that property owners and energy system developers find attractive, they invest in solar enthusiastically. Such is certainly the case among the Dazzling Dozen states.

Again using Maryland as an example: Its progressive solar policies and relatively high electricity prices provide an environment in which an impressive 6.8 percent internal rate of return (IRR) is realized on PV investments. While there are a myriad of factors influencing solar energy growth, the findings of the EAC demonstrate clearly that states with stronger renewable energy policies enjoy stronger solar growth.

Ken Whiteside photo Ken Whiteside has been a fan of solar energy for decades. His first hands-on experience was installing solar on off-grid houses around Telluride, Colorado in the 1990’s (summer in the San Juan Mtns. - somebody had to do it). From his home in Austin, Ken writes and works for widespread adoption of solar electricity, smart energy production and use, and sustainability.

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