This is an excerpt from the April 2018 edition of The SOL SOURCE, a monthly electronic newsletter analyzing the latest trends in renewable energy based on our unique position in the solar industry. To receive future editions of the journal, please subscribe.
Over the past two decades, renewable portfolio standards (RPSs) have been among the most effective policies supporting the growth of renewable energy. Arguably the most straightforward policy to advance the growth of renewable energy sources, an RPS requires that a state’s utilities procure a certain amount of their electricity supply from renewable sources such as wind and solar. To date, 29 states and Washington, D.C. have enacted an RPS. However, this number can be misleading, as it includes some states which make it easy for utilities to neglect implementation (for example, by requiring compliance only if it is cost-effective).
Historically, RPSs and RPS increases have been enacted primarily through legislation, with few attempts to enact them by referendum. To date, only Colorado and Washington have enacted an RPS through ballot initiatives, but that may be set to change, as voters in three states may decide whether to increase their states’ RPS requirements this November. The initiatives in all three states are supported by NextGen America, the political action committee founded by climate activist Tom Steyer. If voters in these states vote in favor of these initiatives, clean energy advocates may consider restarting the strategy in other states. If this becomes a pattern, RPS ballot initiatives could represent a significant strategy in future efforts to advance the adoption of renewable energy sources nationally. It also would provide an avenue to enact RPSs in states where legislators or governors oppose them or prefer to move slowly.
In Arizona, a group of clean energy advocates called Clean Energy for a Healthy Arizona is supporting a ballot initiative to increase the current RPS from 15 percent by 2025 to 50 percent by 2030. Arizona, benefiting from some of the highest solar insolation in the nation, is one of the top five states in cumulative solar adoption. However, the state’s utilities, led by the largest utility, Arizona Public Service (APS), have long battled against policies favorable to solar. In late 2016, Arizona ended its incumbent net metering program and dramatically reduced compensation for exported energy from behind-the-meter systems, which has damaged the economics of rooftop systems. If a stronger RPS were enacted, it could force utilities to take advantage of Arizona’s excellent solar resource.
Unfortunately, APS appears to have been successful in damaging this RPS initiative before it has even been voted on. The state legislature and Governor Doug Ducey recently enacted a bill that limits the penalty for not complying with the RPS at just $5,000, a Machiavellian move that would enable utilities to effectively ignore the requirement.
In a time-honored tactic, APS is also seeking to put its own initiative on the ballot. Their initiative mirrors the 50 percent requirement but creates several avenues for utilities or the Arizona Corporation Commission (ACC) to avoid implementation. For example, utilities would not need to implement the requirement if it had any effect on “the affordability or cost” of customers’ bills or grid reliability.
Adding to the new RPS ballot’s competition is ACC commissioner Andy Tobin’s recently announced proposal for a “clean peak standard” of 80 percent. Commissioner Tobin’s proposal is less favorable to renewable energy, because it would include nuclear energy in addition to renewable energy. Commissioner Tobin’s proposal would also include 3,000 MW of storage by 2030.
Back in 2012, Michigan voters rejected a ballot initiative that would have increased the state’s RPS to require 25 percent renewable energy by 2025. However, four years later, the renewable energy industry in Michigan saw a victory in 2016 when the state legislature passed a more modest RPS increase, to 15 percent by 2021. Michigan has also recently become a budding market for PURPA projects, though the implementation of this program was cast into some doubt almost on the day of launch as the state’s utilities filed to remove the capacity payment portion of the PURPA contract, pointing to a lack of need for new capacity.
With this positive momentum, clean energy advocates are at it again. Led by Clean Energy, Healthy Michigan, advocates are seeking to place a ballot initiative on the November 2018 ballot which would increase the RPS to 30 percent by 2030. This proposed RPS change comes alongside several other solar policy changes in the Great Lakes State which you can read more about in our state markets section.
Hopefully, with state solar policy slowly gaining momentum, alongside installation costs that have fallen dramatically since 2012, Michigan voters will see the issue differently. Solar adoption has been slow in Michigan to date, with slightly over 100 MW installed to date, but this could be poised to change in the future.
Anyone following solar will know that there has been plenty of solar drama in Nevada in recent years. Though most of the debate has surrounded net-metering, the RPS hasn’t been immune from controversy. After Governor Brian Sandoval vetoed a bill in 2017 that would have increased his state’s RPS from 25 percent by 2025 to 40 percent by 2030, a group of clean energy advocates called Nevadans for a Clean Energy Future is supporting a ballot initiative that would increase Nevada’s RPS to 50 percent by 2030, an ambitious target that would match those set by California and New York (though not Hawaii’s or Vermont’s even more ambitious requirements).
Public polling has shown that Nevada voters support solar energy generally, with a majority of all voters supporting solar energy. Time will tell whether these polling numbers will translate into success at the polls in November.
Public polling routinely shows that Americans support more development of renewable energy sources. For example, Gallup recently found that over 70 percent of Americans favor spending more government money on developing solar and wind power. When state legislatures or governors oppose RPSs or RPS increases, ballot initiatives can provide a mechanism for voters to channel their support for renewable energy into enacting policies that will accelerate the growth of renewable energy. Perhaps these three initiatives will set a precedent and provide a path forward for solar advocates in non-traditional states.
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