study- residential solar pv market in wisconsin...wisconsin (wi) residential solar pv market in two...

i Effect of electricity bill on solar market in Wisconsin

STUDY: Residential Solar PV Market in

Wisconsin

Sai Mounika Chennamsetty

Mitch Brey (RePower Madison)

ii Effect of electricity bill on solar market in Wisconsin

ABSTRACT:

Currently, due to the day by day increase in electricity consumption, there is a greater

demand to increase its production. But electricity production from fossil fuels causes drastic

damage to the climate. In order to reduce this impact on the environment, alternate clean

technologies are being adopted. Solar power generation is a trending clean energy technology

whose continuous production and use do not affect the availability of future supplies or the

climate. But the cost of electricity produced by solar can be more than the cost of electricity

produced by conventional fuels, where the policies and incentives play key roles for robust

solar market. Therefore in this paper we tried to discuss about the current situation of

Wisconsin (WI) residential Solar PV market in two parts:

PART ONE:

In part one; we tried to discuss about the current situation happening all over the

country i.e., the effect of change in electric rate structure (increased fixed charges and

decreased variable cost charges) on the WI residential solar photovoltaic (PV) market by

calculating the payback period.

PART TWO:

In part two, we tried to analyze the general situation of WI residential solar PV market

by analyzing the state policies that affecting the residential solar PV market. Therefore we

compared with policies of some of northeastern states to get a clearer idea of how these

policies affect the residential solar PV market. We then tried to provide recommendations on

which policies could be adopted in terms of improving the residential solar PV market in WI.

iii Effect of electricity bill on solar market in Wisconsin

INDEX

List of Figures

List of Graphs

List of Tables

Introduction………………………………………………………………………………………………1

Technical potential of solar PV in the USA………………………………………………………….2

Small rooftop solar PV Technical potential in Wisconsin…………………………………….......3

Solar PV in Wisconsin……………………………………………………………………………..…...3

Residential solar PV in Wisconsin……………………………………………...…………...4

Part 1………………………………………………………………………………………...…………...4

Effect of Decreased Cost per KWh Charge on Solar Market…………………………….4

Electricity bill…………………………………………………………………………………...5

Electricity market in WI……………………………………………………………………….5

Case 1: MGE…………………………………………………………………………..6

Case 2: Alliant Energy………………………………………………………………..9

Case 3: WPSC………………………………………………………………………..10

Part 2…………………………………………………………………………………………………….10

WI solar policies………………………………………………………………………………10

Case study……………………………………………………………………………………...11

Case i: Maryland…………………………………………………………………….12

Case ii: New York……………………………………………………………………13

Case iii: New Jersey…………………………………………………………………14

Discussion………………………………………………………………………………………………15

Conclusion………………………………………………………………………………………………16

References……………………………………………………………………………………...……….17

iv Effect of electricity bill on solar market in Wisconsin

List of Figures:

Figure 1: Residential PV installations in USA through 2016 Q1 .............................................. 1

Figure 2: Technical potential of Solar PV in the United States ................................................ 2

Figure 3: Small building average relative production .............................................................. 3

Figure 4: Status of investor –owned utility proposals. ............................................................. 6

Figure 5: Wisconsin 2017 Solar Report Card ......................................................................... 11

Figure 6: Maryland 2017 Solar Report Card .......................................................................... 12

Figure 7: New York 2017 Solar Report Card .......................................................................... 13

Figure 8: New Jersey 2017 Solar Report Card ....................................................................... 14

List of Graphs:

Graph 1: Residential solar PV installed in Wisconsin by 2015 ................................................ 4

Graph 2: Payback period for approved MGE rates .................................................................. 7

Graph 3: Percentage change of Electricity Bill for approved rates of MGE. ........................... 7

Graph 4: Payback period for both approved and withdrawn rates. .......................................... 8

Graph 5: Electricity Bill for proposed costs of MGE. ............................................................... 9

Graph 6: Payback Period for Alliant energy rates .................................................................... 9

Graph 7: Electricity bill for given Alliant rates ......................................................................... 9

Graph 8: % change of Electricity Bill for Alliant energy rates ............................................... 10

Graph 9: Payback period for WPSC rates .............................................................................. 10

Graph 10:% change of Electricity Bill for WPSC rates .......................................................... 10

List of Tables:

Table 1: Electricity Rates by MGE ............................................................................................ 7

Table 2: Electricity Rates by Alliant .......................................................................................... 9

Table 3: Electricity Rates by WPSC ........................................................................................ 10

v Effect of electricity bill on solar market in Wisconsin

Abbreviations:

WI- Wisconsin

PV- Photovoltaic

MGE- Madison Gas & Electric

WPSC- Wisconsin Public Service Corporation

EIA- Energy Information Administration

GTM- Greentech Media

MW- Megawatt

GW- Gigawatt

kWh- kilowatt hour

RPS- Renewable Portfolio Standard

SREC- Solar Renewable Energy Certification

NREL- National Renewable Energy Laboratory

PSC- Public Service Commission

CUB- Citizen Utility Board

IL- Illinois

MI-Michigan

PA- Pennsylvania

NY- New York

NJ- New Jersey

MA- Maryland

SACP- Solar Alternative Compliance Payments

NYSERDA- New York State Energy Research and Development Authority

1 Effect of electricity bill on solar market in Wisconsin

INTRODUCTION:

The production of electricity using solar

energy is expanding rapidly across the

United States. It was projected by U.S.

Energy Information Administration (EIA)

that the USA could install 305 GW by 2030

and 737GW by 2050. According to

Greentech Media (GTM) Research, total

solar PV capacity reached 35.8 GW by Q3

2016, enough to power 6.5 million

American homes. Most notably, the US

solar market installed 4,413 MWdc in the 3rd

quarter 2016, of which more than 75% of

the installations came from the utility sector.

This was the largest quarter ever for the

solar market with total of more than 3GW.

However, when looking at only the

residential solar PV market, a significant

slowdown has been observed. (i.e. 10%

decreased from the 2nd quarter of 2016).

From the graph in Fig. 1, we can see that

there was a 23% growth in the residential

solar PV sector in 2016, but when it is

compared with the last four years, the

growth seems to be very slow. Some of the

reasons for the slow growth are:

1. According to the report given by the

SEIA, changes in the sales cycles in

mature state markets, such as California,

and challenges posed by rate design

reforms, such as the elimination of net

metering in Nevada, are reasons for the

shift1.

2. According GTM research, one of the

reasons for the slowdown in the

residential PV sector is due to lower

electric pricing (i.e. the cost per kWh)2.

Figure 1: Residential PV installations in USA through 2016 Q1


From this, we clearly understand that a

robust residential solar market depends on

policies like federal tax credits, Renewable

Portfolio Standard (RPS), Rebates, net

metering, and electric rate structures.

TECHNICAL POTENTIAL OF SOLAR

PV IN THE UNITED STATES:

As defined by the NREL,

“Technical potential is a metric that

quantifies the generation available in a given

region from a particular technology; it

considers resource availability and quality,

technical system performance, and the

physical availability of suitable area for

development”5. The United States has the

“technical potential” to install enough solar

electricity capacity (including both solar PV

and concentrated solar) to meet 100 times

more than the nation’s electricity needs.

Each and every state has the “technical

potential” to generate more electricity from

the sun than it currently uses in an average

year4. As indicated in Fig. 2, 20 states have

the technical potential for enough PV

generation to exceed the annual electricity

consumption by a factor of 100 or more.

While coming to the rooftop solar PV,

according to the analysis done by the NREL,

the United States has a technical potential of

1,118GW of installed capacity, which is

equivalent to 39% of all electricity sales in

2013.Most noticeably the technical potential

for small building rooftop PV (< 5,000 ft2) is

731 GW of installed capacity, equivalent to

Figure 2: Technical potential of Solar PV in the United States


65% of all rooftop PV’s technical potential5.

From the available solar resource maps, we

can see that solar resource vary from place

to place. For example, the southwest region

of the country receives a very good solar

radiation when compared to other parts of

the country. However, NREL shows an

analysis of the annual rooftop PV generation

of an average small building as a percentage

of each state’s average annual household

consumption (Fig. 3). To specify, it suggests

that offsetting a significant amount of

residential sector consumption does not

preclude due to relatively poor solar

resources5.

Small rooftop solar PV Technical

potential in Wisconsin:

According to NREL’s analysis, WI

is one of the top nineteen states which have

a good small building average relative to

production at the state level. It can also

generate 25% or more of their annual

electricity consumption. Furthermore, WI

has the technical potential to offset 27.6% of

its annual electric sales through small

rooftop solar PV (i.e. 16.3 GW could be

installed).

SOLAR PV IN WISCONSIN:

As shown in the Fig. 2, WI has the

technical potential to generate about 25 to

100 times more electricity from all solar

resources than its consumption. However,

WI had only a total installed solar energy

capacity of 27 MW by 2015. It is expected

to add only another 141 MW of solar

electric capacity over the next five years.

Figure 3: Small building average relative production


Whereas according to NREL’s analysis, WI

could provide 35.5% of its electricity use,

simply by installing solar panels on all

suitable rooftops.

Residential solar PV in Wisconsin:

Residential solar PV is systems

installed on residential buildings, typically

featuring a capacity of about 5 to 20 kW and

are generally installed on rooftops.

According to the NREL’s analysis as

discussed above, WI is one of the top 20

states with good technical potential capacity

in small rooftop solar PV (i.e. 16.3 GW can

be installed), but it is nowhere near the limit

of small roof top solar PV capacity that can

be installed. Based on data collected from

the public service commission of WI, the

cumulative capacity reached only about 9

MW by 2015 as shown in the graph 1.

PART 1:

Effect of Decreased Cost per KWh

Charge on Solar Market:

Despite having abundant solar

technical potential, only 1.35% of the total

U.S electricity was generated using solar PV

by 2015. The main reason for this is the cost

of electricity per unit. Generally, the average

cost of electricity of solar PV is expensive

compared to the cost of electricity produced

by conventional sources like coal, nuclear,

etc. This is because ratemaking calculations

do not include all costs (health,

environmental, and social justice).

However, when we compare costs within

the solar PV sector, we see that utility scales

of solar PV systems are more efficient and

cost less per kWh compared to the

residential scale solar PV systems6. This is

mainly due to large arrays where tilt and

Graph 1: Residential solar PV installed in Wisconsin by 2015


orientation of panels are controlled to

maximize production. Residential sector

systems are small and usually have a fixed

position. One of the main drivers for solar in

the residential sector is to reduce the

electricity bill and save enough money to

pay down the initial investment within the

lifetime of the system, which is simply

known as the payback period. Therefore,

investments in solar PV systems with faster

payback periods are more attractive to

customers. The calculation of payback

period for any rooftop solar PV includes

three basic steps:

i. Calculating system costs

ii. Calculating system savings

iii. Calculating system payback

System costs in residential sector

mainly consist of components’ cost and

installation costs, which can be decreased

with incentives, such as 30% tax credit and

rebates provided by state and federal

governments. However, the payback does

not depend only on solar system cost. It also

depends on the cost per kWh that is paid to

the grid by the customer, as this is the

money that can be saved by installing solar

PV systems on the rooftops.

Electricity Bill:

As disscussed above, payback period

for a residential solar PV has a strong

correlation with the cost paid to the grid by

the customer (i.e. their electric bills).

Generally, the electricity bill is divided into

two different costs :

i. Fixed charges

ii. Variable costs

Fixed charges are the amount which

must be paid by the customers irrespective

of the power that they consumed. It is set

during ratemaking by the Public Service

Commission (PSC). For example, the fixed

charge is the same for customers using 250

kWh as it is for customers using 1000 kWh.

On the other hand, the variable cost is the

amount charged per unit (kWh) used by

customers. As variable cost depends on how

much energy that customers consumed, they

can have some control over variable costs.

Electricity Market in Wisconsin:

In 2015 many power utilities all over

the United States began to propose hikes in

fixed rates and decreases in volumetric rates

(cost per kWh). In simple terms, the

customer has to pay his/her fixed portion of

the bill irrespective of consumption. The

higher the fixed cost, the lower the value of

Units (kWh) conserved or generated by the

customer. This decreases the incentive for

the energy efficiency measures

(conservation) as well as clean energy

generation techniques like installing solar

PV on rooftops. Higher fixed costs are

favored by the utilities because it keeps the


utilities on the safe side of consistent

revenue collection.

Many of these rate proposals were

rejected by state utility commissions.

“Rejection rates have remained fairly steady

over 2015 and 2016, with 85% of fixed fee

increases rejected or scaled back in 2016

and 91% disallowed or dialed back the year

prior18”

Figure 4: Status of investor –owned utility proposals.

Once, WI was considered a

Midwestern leader in progressive regulation,

but unfortunately, during the last three years

the Wisconsin Public Service Commission

granted substantial hikes in fixed charges

with an average increase of about 66%. For

example, some of the major power utilities

in WI like MG&E and WPS increased their

fixed rates from $10.44 in 2014 to $19 in

2015 and $10.40 in 2014 to $19 in 2015

respectively. At the same time, variable cost

was decreased from 14.4 cents per kWh in

2014 to 13.4 cents per kWh in 2015 and

11.143 cents per kWh 2014 to 10.267 cents

per kWh in 2015 respectively. The kWh

rates were further reduced in 2017 as shown

in the tables 1, 2, 3. Alliant Energy followed

the same trend in 2016.

As we discussed above, while

keeping the system cost constant, the

payback mainly depends on variable cost (if

the cost per kWh increases the savings per

month will increase and if cost per kWh

decreases the savings per month will

decrease, which further increases the

payback period).

In this paper, we tried to calculate

the payback period for the electric rates

offered by different utilities of WI along

with some considerations to figure out the

effect of decreased cost per kWh on payback

period. We have calculated the payback

period for a 5 kW system which would

power an average WI household (an average

electricity consumption of 703kWh/month).

CASE 1: MGE (Madison Gas & Electric)

MGE is the Wisconsin’s smallest

investor-owned utility, providing electric

power to about 141,000 customers in

Madison and the surrounding area. In 2015,

MGE proposed a drastic change in its rate

structure by shifting a major portion of the

electric bill from cost per kWh to fixed

costs. Its intent was to maintain financial

stability. The result of this change approved

by the PSC is shown in the Table 1.


2014 2015 2016 2017

Fixed cost 10.44 19 19 19

Cents/kWh 0.144 0.134 0.134 0.134

Table 1: Electricity Rates by MGE19

From the rates available, we

calculated the payback period for an average

household with an average consumption of

703 kWh/month and 5kW rooftop solar PV

system as shown in the below graph.

Graph 2: Payback period for approved MGE rates

From Graph 2, we can clearly

observe that the payback period increased

with the decrease in variable cost ($/kWh).

The savings, which an individual can make

by using solar PV, decreased. This change in

payback period may not make a lot of

difference for commercial and industrial

customers, but it makes a lot of difference

for the residential low electricity consumers.

This can be clearly observed in

Graph 3, which compares the change in the

electric bill paid to MGE by a customer who

completely depends on the grid with a

customer who installed rooftop solar PV

with capacity of 5 kW to offset around 70%

of their electric consumption (each

household is assumed to have a

consumption of 703 kWh/month and it was

assumed that average US residential solar

PV system of 5 kW produces 500

kWh/month. Therefore, when coming to the

average electricity consumption of 703 kWh

per month, 203 kWh is generated from the

solar PV system and the remaining i.e., 703-

500=203 kWh is drawn from the grid.)

Graph 3: Percentage change of Electricity

Bill for approved rates of MGE.

From Graph 3, the percentage

increase of an electric bill in 2015 was more

for a customer who had rooftop solar PV

(who consumes less power from the grid

because a major part of electricity is

produced from the solar PV system). The

major reason for the greater increase for PV

households is the sudden increase in the

fixed costs in 2015. The PV household is

still connected to the grid in order to get the

rest of its electricity. This PV household


now pays a higher fixed charge which is

now a greater part of the bill since it is

paying a lot less for the kWhs consumed.

However, when compared to the customer

who completely depends on grid power, the

major part of its bill comes under variable

cost which makes the percentage less

increase in the total electric bill. Since this

has an effect on the payback of a PV system,

it will discourage customers from investing

in any kind of distribution system.

Initially, MGE submitted a proposal

in June 2014 to further raise its fixed cost to

$48 in 2016, and $67 by 2017 whereas

variable cost is decreased to 7 cents /kWh in

2016 and 3 cents/kWh in 2017 respectively.

However, due to the strong opposition from

citizens, local governments, and interest

groups, MGE and the PSC modified the

initial proposal as shown in the table 1.It

was also part of an agreement between the

MGE and the Wisconsin Citizen Utility

Board (CUB).

But proposals for hikes in fixed costs

haven’t stopped. To show the effects of

further, we analyzed increases in fixed costs

in the effect of increase in fixed costs on the

solar market by calculating the payback

period for both 2016 and 2017 if the rates

initially proposed by MGE were approved.

Graph 4: Payback period for both approved

and withdrawn rates.

From Graph 4, we can see the

paybacks for MGEs initially proposed rates

would have been very high when compared

to payback period for the approved rates. As

we discussed above, the payback calculation

depend greatly on cost per kWh, the amount

you can save on your monthly bill. But,

when coming to the fixed cost part, it can’t

be saved unless you completely disconnect

from the grid. If you are connected to the

grid you have to pay the fixed charges

irrespective of your consumption. From the

discussion above, it is clear that if the fixed

costs are raised and cost per kWh decreased,

there is a major impact on the payback

period for PV installations.

From the Graph 5, we can clearly

observe that if the rates proposed by MGE

had been approved, the difference in the

electricity bills of household with solar PV

and households which completely depends

on grid power would have decreased year by

year.


Graph 5: Electricity Bill for proposed costs

of MGE.

To be more specific, if $67 for fixed

rates and 3 cents/kWh were approved, the

average residential household without PV

would have paid $88 monthly. If they had

solar PV on their rooftop, it would have

been $73 or only $15 less. So obviously,

based on $15/month savings, one would not

select solar PV or any clean energy to

replace conventional energy. This would

affect the solar market drastically.

CASE 2: Alliant Energy

Alliant energy set a different

example by slightly increasing its cost per

kWh, but almost doubling its fixed charge

from $7.67 in 2016 to $15 in 2017. As

shown in the Table 2, the payback period

slightly decreased from 2016 to 2017 as

shown in the below Graph 6.

2016 2017 2018

Fixed cost 7.67 15 15

Cents/ kWh 0.11458 0.11663 0.11663

Table 2: Electricity Rates by Alliant19

Graph 6: Payback Period for Alliant energy rates

The increase in the fixed charges

may not affect the payback period directly,

but it does affect the cost paid to the grid by

the customer as shown in the Graph 7.

Graph 7: Electricity bill for given Alliant rates

From the above Graph 7, we can see

that the savings that one can get is almost

the same, but the electricity bill is increasing

as the fixed charge is increasing. If this

scenario continues and the fixed charge

continues to rise, then even customers with

distribution generation, like rooftop solar

PV and wind energy, have to pay higher

electricity bills. This may discourage the

customer to go clean because at one point


the saving would be too small when

compared to the bill paid to the grid.

Graph 8: % change of Electricity Bill for

Alliant energy rates

CASE 3: WPSC

As we discussed above, the fixed

rates were almost doubled from 2014 to

2015 and were further increased in 2016

while the variable cost decreased. As shown

in Graph 9 the payback period would

increase.

2014 2015 2016

Fixed cost

10 19 21

Cents/ kWh 0.11143 0.10267 0.09933

Table 3: Electricity Rates by WPSC19

Graph 9: Payback period for WPSC rates

Graph 10: % change of Electricity Bill for

WPSC rates

From Graph 10, it is clear that the

percentage change scenario is similar to the

MGE percentage change scenario.

Discussion:

From the above three cases we can

observe that high electric rates are very good

for residential solar PV market. However

it’s only possible when the fixed rates are

decreased and variable costs are increased.

PART 2:

WI Solar policies:

As we discussed earlier in Fig 2, WI

is one of the 20 states with a good small

building average relative to production at the

state level and can generate 25% or more of

their annual electricity consumption. In

other words, Wisconsin has the technical

potential to offset 27.6% of its annual

electric sales through small rooftop solar PV

(i.e. 16.3 GW could be installed). However

the cumulative capacity of WI reached was


only about 9 MW by 2015, as shown in

Graph 1, which is nowhere near the

technical potential that can be installed. This

can be improved by using some generous

energy policies, but, unfortunately, WI is

lagging behind which can be clearly

observed from Fig 5.

Figure 5: Wisconsin 2017 Solar Report Card12

The average residential electricity

rate (13.19 cents/kWh) in WI is 11.03%

greater than the national average residential

rate (11.88 cents/kWh), which ranks the

state 14th in the nation7. WI offers a decent

solar electric (PV) rebate of 12% of the

installed cost, with a maximum of $2,000

for residential customers8. Other than this

there aren’t any good solar energy policies

in WI, such as net metering policies, solar

carve-out, tax credits, and RPS law for

robust residential solar market in WI.

Therefore, we tried to compare the WI solar

polices with some of the north-eastern states

which are having more or less similar

technical potential as WI do.

However, according to the NREL’s

research, along with technical potential

policy making decision depends on variety

of non-policy factors, which includes state

physical, economic, and demographic

characteristics. As this factors may not

directly related to solar PV installations, but

that might impact whether the state had a

favorable or unfavorable climate for

investment in behind-the-meter PV.

According to the NREL’s analysis , 6 north-

eastern states (IL, MI, PA, NY, NJ, MA) are

having similar non-policy factors as and

good for investment in behind-the-meter PV

as WI do9.

Case Study:

In this analysis, we tried to analyze

solar energy policies of New York, New

Jersey, and Maryland that are national

leaders in solar energy, telling which


policies might fit for WI and can be adopted

for robust residential solar market (PV) in

Wisconsin.

Case i-Maryland:

Maryland is one of the country’s

most successful solar stories since 2008.

Maryland had installed about 465 MW of

solar capacity by early 2016; most of it is

behind-the-meter PV. To be more specific

about 44.77% (249.5 MW) of installed solar

capacity is in residential sector (<20). The

major reason for this robust residential solar

PV market is nothing but the very good

energy policies of Maryland10.

Figure 6: Maryland 2017 Solar Report Card

• Maryland has nation’s 6th best

solar carve-out12. In 2004, Maryland

legislature first enacted a RPS which

was amended several times since

then. The 2007 amendment to the

RPS requires utilities to draw at least

2% of that electricity from solar

power by 2022. In April 2016, the

requirement for renewably sourced

generation for all electricity sold in

Maryland was increased from 20%

to 25% in which 2.5% should be

from the solar energy, up from 2%

by 202211. As a result of this,

1500MW of solar power was

projected by 202212.

• Maryland has nation’s 9th best

performance payments under which

homeowners are rewarded either

with per-kWh bonuses or SRECs for

the electricity generated by the

panels. Utilities buy these SRECs

from homeowners to meet their solar

carve-out limit to avoid the Solar

Alternative Compliance Payments

(SACP) (start at $400 per MWh).

This is what gives the value for

SRECs12. The more the price of

SRECs increases, the payback period


decreases which in turn increases the

solar market. In Maryland, SRECs

prices are pretty high (averaging

$167.5) and stable for the past few

years which lead to the robust solar

market. Unfortunately, the SRECs

prices are $22 per SREC due to the

oversupply in the PV market. This

results in the boom bust cycles in

solar market.

• Along with this Maryland is also

having good net-metering and

interconnection policies.

Case ii-New York:

New York is an eastern state with

considerable amount of solar potential,

which is far less when compared to

south-west states. However, New York

has consistently been in the top 10 US

solar markets. The cumulated solar PV

capacity that installed in NY was 685.73

MW by 2016 in which 493.73 MW was

added only by residential sector. This is

achieved with the help good policies as

shown in Fig. 7 and the very good

financial incentives offered to residential

and commercial solar PV by the New

York State Energy Research and

Development Authority (NYSERDA).

Figure 7: New York 2017 Solar Report Card

There are three main incentives that make

going solar best in New York as follows:

• The Megawatt Block Incentive

Structure: “The NY-Sun Incentive

Program offers incentives to help to

reduce the installation costs

associated with solar electric systems

up to 25 kilowatt (kW) for

residential customers13”.


• Net energy metering: New York has

great net metering rates.

• New York State’s Solar Equipment

Tax Credit: with the help of these tax

credits one can reduce their state tax

payments by up to $5,000 or 25% of

total solar energy expenses.

The great advantages of the

Solar Equipment Tax Credit are

that:

1) Even it applies to the leased or

PPPA solar system.

2) If tax liability isn’t large enough to

claim the entire credit in the first year,

it can be roll over into the next year14.

Case iii-New Jersey:

Due to the strong solar market in 2016,

New Jersey (NJ) stood 4th nationally behind

California, North Carolina, and Arizona for

the installed capacity. However, unlike these

three states, more than 3/4 of NJ’s installed

capacity is behind the meter16.To be more

specific, around 76.7% of installed capacity

comes from the behind the meter in which

34% comes from residential and 50% from

commercial sector15. NJ reached 2 GW of

installed solar capacity by April 2017 of

which 557.5 MW is from residential

sector15. The main reason for this leadership

is NJ State polices.

Figure 8: New Jersey 2017 Solar Report Card

• NJ has some of strongest RPS

requirements in the country. The

RPS requires utilities to make sure

that 20.8% of the electricity each of

them sell should come from

renewable energy resources by

202112.

• NJ has nation’s 3rd best solar carve-

out12. The utilities require to, make

sure 4.01% of electricity each of

them sell should come from the

solar by 2028.In order to meet these

requirements utilities buy SRECs

from solar power producers. As we

discussed earlier, SRECs result in


boom-bust cycles in solar market.

The same thing happened with the

NJ solar market. However, SRECs

have certainly been a big part of NJ

leadership position17.

• NJ also has great net metering and

interconnection policies as shown in

the Fig. 8.

Discussion:

As discussed earlier, WI has same

capacity to install solar power as New York,

New Jersey, and Maryland do. However

compared to great energy policies, these

three states are national leaders, Wisconsin

is nowhere near them. From case i and case

ii, it is clear that policies, including solar

carve–out, SRECs, net metering, and third

party solar options played a key role in rapid

growth of residential solar market in

Maryland and New Jersey. On other side,

New York do not have any good solar carve-

out policies, but incentives offered by NY-

solar, net metering policies, and third party

solar options made New York as one of the

best places for residential PV in country.

When coming to Wisconsin solar

energy policies, there are no specific solar

carve-out, net metering policies, or

incentives. These WI policies can be

improved to see better results as in the above

three states. Even when coming to the third

party option which is one of the important

drives for solar market is not clear whether it

is legal or illegal in Wisconsin

Conclusion:

Part one:

• As discussed earlier, electric rate is a

very important driver for solar

market. To specify, solar market

increases when electricity prices in

that particular region are high.

However, high electric prices should

be in the form of high variable costs

($/kWh), so that customers can have

more control over the bill and can

payback the solar PV system costs as

soon as possible.

Part two:

• As discussed earlier, solar carve-out,

SRECs, net metering and third party

solar are some of the best options

which have been adopted by different

states and shown good results.

Therefore even WI government could

adopt these policies to see good

results.


References: 1. “US Solar Market insight report 2016” GTM Research and Solar Energy Industries

Association’s (SEIA), December 2016 edition.

http://www.seia.org/news/its-‐largest-‐quarter-‐ever-‐us-‐solar-‐market-‐saw-‐nearly-‐2-‐mw-‐pv-‐

installed-‐hour-‐q3-‐2016

2. Eric Wesoff “Slideshow: Why 2016 is Weirdest Year for US Solar,” Greentech

Media, 25 October 2016.

https://www.greentechmedia.com/articles/read/the-‐weirdest-‐year-‐for-‐us-‐solar#one

3. https://insideclimatenews.org/news/24052016/solar-‐energy-‐27-‐gigawatts-‐united-‐states-‐

one-‐million-‐rooftop-‐panels-‐climate-‐change-‐china-‐germany

4. Judee Burr and Lindsey Hallock “The Growing Role of Solar Energy in America,”

Environment America Research & Policy Center, Page 6, November 2014.

5. Pieter Gagnon, Robert Margolis, Jennifer Melius, Caleb Phillips, and Ryan Elmore

“Rooftop Solar Photovoltaic Technical Potential in the United States: A Detailed

Assessment,” National Renewable Energy Laboratory, page 25, January 2016.

6. Arduin, Laffer & Moore Econometrics “The High Cost of Rooftop Solar Subsidies,”

Institute for Energy Research, page 2, October 2016.

7. http://www.electricitylocal.com/states/wisconsin/

8. DSIRE, http://www.dsireusa.org/

9. D. Steward, E. Doris, V. Krasko, and D. Hillman “ The Effectiveness of State-Level

Policies on Solar Market Development in Different State Contexts’, National

Renewable Energy Laboratory, page 3-5, Feb 2014.

10. “MARYLAND SOLAR— AN INDUSTRY AT THE CROSSROADS”, page 3,

October 2016.

http://timberrockes.com/pdfs/USPV-MDsolar-crossroads-1016.pdf

11. “Maryland State Energy Profile”, US Energy information Association, 21 July

2016.https://www.eia.gov/state/print.php?sid=MD

12. https://solarpowerrocks.com/

13. https://www.nyserda.ny.gov/All-Programs/Programs/NY-Sun/Project-

Developers/Residential-Small-Commercial-MW-Block

14. “New York State’s Solar Incentives some of the best in the country”, Energy

sage.http://news.energysage.com/solar-incentives-in-new-york-state/


15. “Solar Installation Report”, board of Public Utilities State of New Jersey.

http://www.njcleanenergy.com/SRPREPORTS

16. “New Jersey reaches 2GW of installed capacity”, PV Magazine.

https://pv-magazine-usa.com/2017/01/19/new-jersey-reaches-2-gw-of-installed-solar/

17. http://costofsolar.com/new-jersey-solar-incentives-new-jersey-solar-facts/

18. Samantha Williams “They’re Ba-ack… But Fixed Fee Hikes Still Getting Nixed”, 13

Feb 2017.

https://www.nrdc.org/experts/samantha-williams/theyre-ba-ack-fixed-fee-hikes-still-

getting-nixed

19. Public service commission.

http://apps.psc.wi.gov/vs2010/electricbill/content/reportcriteria.aspx

study- residential solar pv market in wisconsin...wisconsin (wi) residential solar pv market in two...

Documents