Researchers at the lab have looked at the design of, and early experience with, state-level renewables portfolio standard (RPS) programs in the U.S., which have been specifically designed to encourage solar energy.
They conclude that these state-level RPS programs have already proven to be an important driver for solar energy deployment in the country, resulting in more than 250 megawatts (MW) of new solar capacity through the end of 2009. However, while these impacts are expected to grow considerably in coming years, Wiser states that there will be challenges to overcome.
The study continues: By 2025, the solar and DG set-asides already established under existing state RPS policies will require the equivalent of 9,400 MW of solar capacity, representing roughly a six-fold increase over the amount installed at the end of 2009. New Jersey, Illinois, Arizona and Maryland represent more than two-thirds of that total.
It says that although California is by far the largest solar market in the country currently, it is not included in this estimation, due to the fact it does not have a solar set-aside within its RPS. However, the study says it will continue to be a "major driver".
The study continues by saying experiences in meeting RPS set-aside targets have been somewhat mixed. Of the nine states that had active solar or DG set-aside obligations in 2008, only three are said to have fully met their targets through the purchase of qualifying renewable energy or renewable energy certificates.
As Wiser explains: The difficulties that some states have already faced in meeting solar targets demonstrate the importance of policy design details to ensuring that program goals are achieved.
One issue highlighted in the report is that many states have established caps on the costs that utilities may bear in meeting RPS targets. This issue has already reportedly surfaced in several states, where the amount of funding allocated to procuring solar resources has been below the level necessary to meet the existing targets.
Wiser adds: As solar targets in many states rise over time, current cost caps may increasingly become binding, thereby limiting future solar capacity additions at levels below what was originally envisioned. States may be able to mitigate this potential issue by developing cost caps that are appropriately matched to their solar targets.
A second key challenge, says the report, is to encourage long-term contracting for solar energy resources, as renewable project developers often require such contracts in order to secure financing.
Galen Barbose, co-author of the report and also with Berkeley Lab explains: This is a major issue in restructured electricity markets, where competitive retail electricity suppliers often have an interest in meeting their RPS requirements through short-term transactions. As documented in our study, several states have recently developed innovative approaches to supporting long-term contracts for solar energy projects.
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