37 states and the District of Columbia have renewable energy mandates or targets, meaning that most of the U.S. population is impacted by these policies. As these jurisdictions take a more active role in managing their energy consumption, they have leveraged competitive procurements to purchase renewable resources, and several strategies to compensate solar resources.

States and municipalities have tested various methods for procuring solar resources, and have achieved successful results for their consumers. A June 2019 solicitation for 200 MW of solar generation by the Los Angeles Department of Water and Power received over 130 bids, and broke records with a winning bid below 2 cents/kWh for solar + storage. This record beat a previous solicitation in Colorado, which achieved a price of 3.6 cents/kWh for solar + storage in January 2018.

Net metering is the most common compensation policy, crediting households for the energy they produce through on-bill adjustments, allowing them to reduce bills or earn income, depending on their electricity usage and solar generation. Thirty-five states and the DC currently have a net metering policy: most provide credits at the full retail price of electricity, while some states just compensate for generation costs. Nevada passed a net-metering law in 2017, and in 2018 they had the fastest growing residential solar market in the country, with 275% growth from 2017.

Other states have tried other approaches. Illinois is required to purchase an increasing number of Solar Renewable Energy Certificates (S-RECs) each year, which any solar system owner can compete to sell through a competitive procurement.

Key Topics and Strategies

  • The Solar Foundation and the MA Clean Energy Center have both produced guidelines on competitive solicitations for renewable resources, to ensure a fair, competitive, and efficient process.
  • Power Purchase Agreements (PPAs) are a widespread mechanism for states, municipalities, and private firms to contract renewable energy production for a set time period. To support competitive and fair agreements, NREL released a Checklist for State and Local Governments, and the Interstate Renewable Energy Council released a Toolkit for Local Governments.
  • Model Solar Leases are useful to support homeowners entering agreements, to ensure they are protected from unexpected costs, fees, and burdens or system ownership. New York State and the Solar Energy Industries Association have both developed model leases, available for use.