Federal, state policy moves affect solar growth, supply chains, tech pairings: panel

Solar energy remains a popular choice for customers of retail electricity providers, but federal and state policy actions are affecting solar growth, supply chains and parings with other technologies, such as battery storage, experts said March 21 during a panel discussion at a conference in Houston.

"You're fundamentally in the business of solving your customers' problems," said Jeffrey Prutsman, Facility Innovation Group president and chief operating officer, during a panel discussion at the Energy Marketing Conference in Houston.

One example of a policy change affecting solar and retail markets is various states' moves toward shifting solar net energy metering from retail prices to wholesale rates, which Prutsman said encourages installation of distribution-level battery storage, to minimize exports to the grid.

"If you can bring them a longer-term solution, that is another way to deliver value to them," he said.

Battery storage, with a five-year energy contract, for example, "you might think of as some sort of insurance policy."

IRA impact

Richard Spilky, principal for retail market development at Constellation Energy, cited another example of a state policy affecting solar and retail markets. In every state with competitive retail electricity except Texas, utilities receive the renewable energy credits, not the retail electric providers or "load-serving entities," Spilky said, which diminishes incentives for REPs to support solar panel installation.

"We can't monetize them," Spilky said. "Instead of going to the utilities, that should flow to the LSEs."

According to Prutsman, investor-owned utilities have "a lot of influence over public utility commissions."

Matthew Bowers, Denver-based senior director for operations and strategy at Arcadia, a software developer focused on clean energy solutions, said his work on community solar projects allows for the owners of such projects to benefit from the RECs.

The recently passed US Inflation Reduction Act, which includes a 30% investment tax credit for new solar installations or a $26/MWh production tax credit, has boosted demand for solar modules, Prutsman said, but "we're also seeing installations take longer."

One way the IRA has enhanced solar development is by allowing nonprofit entities, which did not have a way to benefit from tax credits, to receive payment from the US Treasury for the 30% ITC, which David Pianko, energy manager at Yeshiva University in New York, said enhanced the benefit of his institution's recent decision to install a 300-KW solar array on a parking facility.

SEC ESG proposal

Another federal policy that is likely to have an impact on renewable markets would be a proposal for the Securities and Exchange Commission to require public companies to prove their commitments to environment, sustainability and governance goals with viable goals, Prutsman said.

A number of large companies have committed to zero carbon dioxide emissions by 2050 or earlier, and providing a commitment to that much renewable capacity can be problematic, he said.

Among other things, getting projects through interconnection queues can be cumbersome. Stephen Fernands, Customized Energy Solutions founder and president, said it takes two to three years to get a project built in the PJM Interconnection.

But the SEC's proposed rule is likely to cause a shift toward voluntary carbon markets, which Prutsman described as "the next big thing."

"The value of carbon offsets is going to go up, over time," he said. "It's going to be huge."