Report Ranks States Based on Their Solar-Friendliness
(3BL Media/Justmeans) — Earlier this month, Portland-based solar advocacy group Solar Power Rocks issued a comprehensive report containing the rankings of all 50 states for solar. The report, which is the 9th annual for the group, is directed towards homeowners, classifying each state in terms of their “friendliness to residential solar installations.”
The award designated a letter grade (A-F) to each state based on the compilation of scores in 12 separate categories that include factors regarding policy (e.g. renewable portfolio standards, net metering), and incentives (e.g. tax breaks, performance payments). In addition, the authors used a standard 5-kW rooftop solar installation as the benchmark and calculate an ROI for that investment in each state. The calculation includes both cost factors as well as available sunlight.
"We're at a critical juncture for solar in America," said Solar Power Rocks founder Dan Hahn. "With China pouring $360 Billion into renewables by 2020, our states and our country need to get on board so we don't get left behind."
Nine states, including MA, NJ, RI, OR, NY, MD, CT, VT, DC received grades of A. Seven states received a B grade, and sixteen states received a C. Eight states received a D, while eleven states got an F.
States with a payback period of 4-9 years, received an A. There were eleven of those. The average payback was 12.8 years. Massachusetts, which had the highest overall score, had a payback period of four years despite its northerly location. Rhode Island also had a 4-year payback. Overall, the average rate of return for a rooftop solar investment this year was 9.4%, better than the long-term performance of the stock market. Louisiana’s payback period of 20 years, and rate of return of only 2.5%, were worst in the nation, despite its abundant sunshine. The fact that it does support net metering, gave it an overall 42nd place ranking. Last place overall went to Mississippi.
The scoring was weighted as follows: the five policy factors were worth 50%, the five incentive factors were worth 40%, and the two financial performance factors were worth 10%. While state policy and incentives were responsible for the largest portion of a state’s overall solar friendliness, two important factors were largely beyond the control of lawmakers. These were both the amount of available sun, and the average cost of electricity in that state. Solar is far more attractive in states with high electricity prices, providing for a more rapid payback. Take Hawaii, for example, which has electricity prices 3-4 times that of the mainland, as well as a great deal of sunshine. These factors combined to give Hawaii a 15th place ranking and a score of B. The state would have scored even higher if it had a solar carveout in its renewable portfolio standard, or gave state solar rebates, or a sales tax exemption. A solar carveout is specific target for solar within an RPS, as opposed to an overall target for renewables that could be met with wind or other power sources.
All of the states with A grades have some form of net metering, while all the states with F grades are generally involved in some form of fossil fuel production and have little in the way of policy or financial support for an investment in solar.