At the forefront: The biggest state clean energy legislative trends of 2021
The following article is contributed by Autumn Proudlove, Senior Policy Program Director at the North Carolina Clean Energy Technology Center.
States have been at the forefront of clean energy policies for many years, and 2021 was no exception. NC Clean Energy Technology Center, which maintains the national database of government incentives for renewable energy and efficiency, has long followed clean energy legislation across the country and identified the following notable trends in legislative activity in 2021:
Decarbonisation goals of the electricity sector
A major trend among state lawmakers in 2021 was to set targets for decarbonising the power sector to address growing climate problems. The specific political approaches of the states include increasing existing requirements for renewable portfolio standards (RPS) or adopting new standards for clean electricity or emission reduction targets.
In North Carolina, lawmakers passed HB 951, which calls for a 70% reduction in electricity-related CO2 emissions by 2030 and CO2 neutrality by 2050. Similarly, Oregon lawmakers have set a goal to reduce electricity-related greenhouse gas emissions by 100% by 2040. Illinois legislation sets a goal for decarbonizing the electricity sector by 2045 while increasing the state's RPS to 40% 2030. Delaware also increased its RPS to 40% by 2035.
Massachusetts legislature has passed law setting a target of net zero greenhouse gas emissions for the entire economy by 2050, and Rhode Island is calling for a plan to be developed to achieve net zero by 2050 across the state's economy. To achieve emissions.
Promotion of the use of energy storage systems
Another popular topic in state politics this year was the promotion of the use of energy storage systems through government goals or tax incentives. Connecticut and Maine were the eighth and ninth states to pass energy storage targets, with Connecticut targeting 1,000 MW by 2030 and Maine targeting 400 MW by 2030.
A growing number of states are also extending property tax exemption or sales tax exemption for renewable energy projects to energy storage systems. Laws passed in Arizona, Colorado, Massachusetts, Nevada, Vermont, and Virginia allow energy storage projects to obtain property tax exemptions or rebates on renewable energy, while Arizona, Indiana, and Virginia bills extend renewable sales tax exemptions to energy storage systems.
Expansion of solar programs on roofs and in the community
While net metering credit reforms have been in the spotlight with state lawmakers in recent years, activities related to net metering and municipal solar programs in 2021 focused more on program expansion, with several states setting the aggregate program caps or eligibility for increased the system size.
Bills passed in Maryland and Massachusetts increased overall net metering caps, while Illinois legislation raised system size limits for net metering and community solar projects from 2 MW to 5 MW and opened a new block of incentives for community solar development. Delawares SB 2 has also increased the size limit for community solar panels and relaxed certain program requirements.
New Mexico lawmakers have set up a new municipal solar program for the state, the details of which are currently under review by the Public Regulation Commission. Another notable development that extends customer access to solar power is West Virginia’s adoption of HB 3310, which authorizes the use of third party power purchase agreements for on-site solar systems.
Rules for the decommissioning and location of solar systems
With utility-scale solar system development booming in many parts of the country, a number of states are creating new requirements for the location and decommissioning of these systems. Much of the interest in solar sites is focused on farm land, while the talk about decommissioning is focused on financial safeguards.
West Virginia law requires solar and wind developers to issue bonds to cover decommissioning costs for projects of 1 MW or more. Texas SB 760 states that leases between landowners and solar operators must include asset removal and financial security provisions. In Maine, state lawmakers have made a requirement for open space solar projects three acres or more to submit a decommissioning plan, including a financial commitment to cover decommissioning costs.
Maine lawmakers also passed bill instructing the Department of Agriculture, Conservation, and Forestry to convene a task force to prevent solar installation on high-quality farmland and encourage development on more marginal farmland. Ohio's SB 52 also deals with project locations, giving the district commissions new powers to ban the construction of large solar and wind farms in certain areas before the projects reach the Ohio Power Siteing Board.
Offshore wind development
Several states passed wind energy bills this year, most of which focused specifically on offshore wind. Many of these bills are designed to encourage the development of offshore wind power, with coastal states battling to establish themselves as leaders in the technology.
Legislation passed in Oregon sets a goal to have 3 GW of floating offshore wind off the state's coast by 2030. California's AB 525 also requires the California Energy Commission to set offshore wind targets to be met by 2030. In Massachusetts, SB 9 is instructing the state to procure an additional 2,400 MW offshore wind by 2027, in addition to the 1,600 MW required under previous legislation.
Electrification of transport
Electrification of transport has been a major focus across the country in recent years, and state lawmakers have played a key role in developing the policy framework for electric vehicles and charging infrastructure. Government lawmakers are dealing with electric transportation in a variety of ways, including adopting procurement targets for government fleets, creating incentives, and instructing utilities and regulators to take specific action.
Connecticut and Hawaii have passed laws creating new requirements for government fleets to purchase zero-emission vehicles. Connecticut Now Requires At least 50% of All Cars and Light Trucks Purchased or Leased by the State To Be Zero-Emission Vehicles By 2030 Maryland Legislature has also passed bill that will require the purchase of public transport buses to be zero-emission starting in fiscal year 2023 Must be penance.
In other cases, state lawmakers are asking utility companies and regulators to take steps to electrify transportation. In Illinois, SB 2408 requires major utility companies to submit advantageous electrification plans, including provision of infrastructure, vehicle charging fees, and streamlined charging programs. In South Carolina and Virginia, legislation tells state regulators to look into electrifying traffic
Another issue in connection with the electrification of transport, which is still receiving attention from the legislators of the federal states, is additional registration fees for electric and hybrid vehicles. In 2021, new fees were introduced in Oklahoma and South Dakota, while laws in Missouri increased registration fees. Currently, 30 states have additional electric vehicle registration fees.
Performance-based regulation
Reforms to the utility business model are receiving increasing attention from both state lawmakers and utility regulators, with performance-based regulation currently one of the approaches of greatest interest. In contrast to service cost regulation, in which utilities have the opportunity to generate a return on investments, performance-based regulation enables utility companies to generate a return based on the achievement of certain metrics. This is to better align the interests of the utility and the public interest.
As part of Illinois' massive energy bill passed in September 2021, the Illinois Commerce Commission is set to create a comprehensive performance-based tariff framework for utilities serving more than 500,000 customers. Washington state lawmakers also passed laws directing the Utilities and Transportation Commission to develop a policy statement addressing alternatives to regulating service costs, including performance incentive mechanisms. Although no performance-based regulation is required, the North Carolina HB 951 authorizes its use.
Wholesale market reform
Another approach to regulatory reform that was in focus in 2021 was wholesale market reform, and in particular the issue of states joining regional broadcasting organizations (RTOs). While many market reform activities have been carried out at the regulatory level, such as
In Nevada, SB 448 requires that broadcast providers in the state join an RTO by 2030. Colorado lawmakers also passed bill directing transmission companies to join an organized wholesale market by 2030. Meanwhile, Oregon legislators passed laws instructing the State Department of Energy to prepare a report on the benefits, challenges, and opportunities of developing or expanding an RTO in the state.
I'm looking forward to
While the above trends highlight clean energy policy issues that are receiving a lot of attention from lawmakers, states continue to act as laboratories for innovation, adopting unique policy approaches, and testing their own solutions to these problems. While most states will have completed their 2021 legislatures by this time, 2022 is around the corner, and we expect many of these issues to come back up in legislation next year.
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