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Surprises In NREL State Study Of Where Solar Is Most Economical

Originally published on Solar Love.

State by state, the effects of going solar are influenced by much more than how much the state naturally enjoys sunshine throughout the year. Going solar, according to new research by the National Renewable Energy Laboratory, might be a more beneficial economic energy choice in states one does not expect to see at the top of the list. Hawaii and California — sunny states one expects to do well — do top the list. However, third directly behind them is not very sunny at all, but is a state that encourages consumers to educate themselves and their community on solar, and includes some good incentives — that state is Connecticut.


The researchers note the relationship between the power-producing potential of a system given its site, as well as the value of the watts it produces there. Solar resource in Connecticut are, of course, relatively small. However, Connecticut has high electricity rates (third-highest-in-the-nation), so electricity you can generate for your own use (from solar or other methods) is more valuable there.

Breaking Energy notes, however, that what an owner might “earn” from a system is not necessarily be reflected in the NREL figures. The study is a “theoretical exercise” that assumes net metering policies that pay 100% of the residential electrical rate. However, net metering polices are highly variable. Thus, the amount owners might “earn” from a system is not necessarily shown in the NREL figures. Furthermore, states vary in the other incentives they offer.

In the report, The Effect of State Policy Suites on the Development of Solar Markets, “NREL researchers examined a variety of policy and non-policy-based factors that influenced state and local solar markets. On the policy side, two factors strengthen a state’s solar market in all contexts: interconnection, or policies that define the procedural requirements for connecting a PV system to the electricity grid; and net metering, or policies that enable the utility to compensate individual PV system owners though a simple billing mechanism,” NREL writes in a press release about the study.

Another highly variable factor that affects the question of the study (Should a homeowner go solar?) is the price of the system. Berkeley Lab’s Tracking the Sun report showed that the median installed price for systems less than 10 kilowatts in size in 2013 was $4 per watt in Connecticut. This cost is quite below the national median of $4.70/watt — thus, another point for going solar in Connecticut.


Key conclusions of the NREL researchers are as follows:

  • States that have matched their suite of best-practice policies to their unique context have excelled.
  • Both the number of solar policies and the length of time the policies have been in place are important indicators of market success.
  • Support for solar leasing and other increasingly popular third-party ownership models seems to be a distinguishing factor in the success of solar markets in some states — but usually economic factors must also be favorable.

“We built quantitative evidence showing that, across the board, states with three or more market creation or market enabling policies have the most robust solar markets,” said the report’s coauthor Elizabeth Doris, a technical manager for Policy and Technical Assistance at NREL. “This study provides additional insight into how policies should be considered in light of non-policy factors to best support solar market development.”

This is a third report in a series of analyses. It follows these related reports: The Effectiveness of State-Level Policies on Solar Market Development in Different State Contexts and Strategic Sequencing for State Distributed PV Policies: A Quantitative Analysis of Policy Impacts and Interactions.

In a recent post on CleanTechnica, “The Future of Solar Economics and Policy,” John Farrell points to the unique place in history that solar power is at presently. “It’s growing rapidly, its price is falling precipitously. Within the next 10 years, it will compete favorably with utilities for electricity sales, on price, and without subsidies. Given its rapid ascent, it might seem silly to talk about change. But the continued expansion of distributed solar power may rely on modifying a bedrock of distributed solar policy.”

Farrell examines solar policy — why the past is all about net metering, why it is good, why it isn’t everything, and then brings us to the future with possibilities and more about solar.

Inspired Economist‘s story, “Is It Solar Investment’s Time to Shine?,” shifts to reasons why recent viewpoints (of investing in solar) appear to have changed, with several major fund managers placing their faith in solar shares as a major part of their portfolios. “Despite a wide range of reasons for this trend, falling costs and greater consolidation are the most cited causes of the new wave of positivity.”

Bringing the discussion to clear thinking, Inspired Economist notes: “But the diminutive size of the industry should not put off investors looking for returns that are sustainable both economically and ecologically.” Do what is good, invest in the future of your children’s children, and enjoy rewards materially without hurting the environment.

Related Stories:

Google & SunPower Invest Big Cash In Residential Solar Leasing Fund

Integrys Energy Services Partners with Clean Power Finance for First Residential Solar Investment

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Written By

Cynthia Shahan started writing after previously doing research and publishing work on natural birth practices. (Several unrelated publications) She is a licensed health care provider. She studied and practiced both Waldorf education, and Montessori education, mother of four unconditionally loving spirits.


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