2021 Solar Policy Updates for Key States

Despite the challenges of 2020, the solar energy industry is stronger than ever. According to SEIA, U.S. solar installations saw a 43% uptick last year as more and more people realize the benefits of solar energy in terms of creating a more sustainable future for the planet and hedging against volatile utility prices. State incentives have long been a driver of solar growth and are ever-evolving. Here’s a breakdown of policy updates for 2021 across several key regions.

California: A Golden Opportunity for Solar

California’s Self Generation Incentive Program (SGIP) has been a big catalyst for solar-plus-storage in the state — and anyone considering installing such a system will want to seize the opportunity in 2021. The Golden State also boasts a net metering policy that allows solar customers to “sell” excess electricity they generate to the utility for credits on their monthly bills. A new iteration of the policy — dubbed NEM 3.0 — is expected to solidify by the end of 2021 and could reduce the value of electricity exported to the grid when it goes into effect in 2022. The change won’t apply to customers who are already interconnected, so Californians should get their solar project off the ground as soon as possible to be grandfathered into this year’s more attractive net metering rules.

New York: Get ‘Em While They Last

Operated by the New York State Energy Research and Development Authority (NYSERDA), New York’s Megawatt Block program takes a segmented approach to doling out per-megawatt solar incentives across different regions within the state. But the time to act is now; the blocks allocated to the ConEd service territory are expected to fill up this year. Blocks specifically within New York City are already gone, but there are still some available in Westchester County. Time is also of the essence for those looking to participate in the state's Community Distributed Generation program, as capacity is dwindling there as well. New York aims to have 6,000 MW of solar power statewide by 2025, and policymakers are likely to create more incentive capacity to meet that goal.

New Jersey: On ‘TREC’ for a Big Change

A successor to New Jersey’s SREC program, the Transition Renewable Energy Credit (TREC) program is still active, but it will soon be replaced. We’re still awaiting word from the Garden State’s Board of Utilities on what the new program will be, but, as of this writing, solar customers in the state can enjoy fixed revenue for the energy they produce for 15 years.

Massachusetts: SMART Ways to Monetize Facility Space

The Solar Massachusetts Renewable Target (SMART) program continues to go strong, incentivizing behind-the-meter commercial solar projects via flat per kWh payments. Like the Megawatt Block program in New York, SMART incorporates a block structure for parsing out incentive-eligible megawatt capacity in the state. SMART is especially focused on encouraging solar arrays in spaces with limited square footage, such as rooftops and parking lots — allowing corporations to monetize previously unused real estate. Energy storage systems are also incentivized per kWh basis through a policy adder. A revised SMART 2.0 that will expand the program’s capacity by 1,600 MW is expected to open in March and be fully implemented by the summer.

Connecticut: The Sun Sets on LREC/ZREC

2021 is the tenth and final year of Eversource’s LREC/ZREC program, which incentivizes low- and zero-emissions technologies. Solar energy producers can take advantage of 15 years of contractual revenue, earning a fixed price for the renewable energy credits their system generates in addition to savings on their utility bills. Connecticut regulators are currently eyeing an LREC/ZREC replacement similar to New York’s Value of Distributed Energy Resources (VDER) program where solar customers are credited based on the totality of the benefits their energy provides to the larger grid.

Pennsylvania and Maryland: Staying the Course With SRECs

Solar Renewable Energy Credits (SRECs) continue to drive commercial and industrial solar installations in Pennsylvania and Maryland. Additionally, legislation has been introduced in the latter state that could raise the net metering cap from 2 MW to 5 MW, thus increasing the amount of electricity solar energy producers can sell to their utility for bill credits.

While policies vary from state to state and year to year, there is an overwhelming trend of encouraging solar system installations through financial incentives that have the potential to yield big returns on investment. Even if you’re not in the states, we’ve called out here, don’t worry. Federal incentives like the investment tax credit (ITC) may entitle you to a 26% tax savings. To learn more about how your company can benefit from solar energy, contact us at PowerFlex for a free consultation. For over a decade, we’ve been helping clients like Amazon, Bloomberg L.P., and Target meet their sustainability goals while reducing energy costs.