How California & New York are Building Grids that Encourage the Growth of Distributed Energy Resources
The First Installment in SEIA's New Opportunities for Solar Through Grid Modernization Series. For the full series, click here.
Lawmakers and utility regulators in California and New York have been extensively engaged in efforts to modernize the electric distribution grid. This paper draws on the experience of Solar Energy Industries Association (SEIA) staff in each jurisdiction and explains how these efforts are creating new opportunities for solar power. The paper describes the policy and political landscape in each state and summarizes the ways in which regulators are currently addressing grid modernization. We identify common elements of these efforts, which include: 1) updating utility system planning; 2) identifying alternatives to traditional utility investments; 3) establishing robust cost benefit frameworks; 4) modifying compensation frameworks to drive investments in distributed energy resources (DER), and 5) making utility investments in technologies that bring new functionality to the grid itself. Future papers will drill down into the details of these issues and discuss the pace of change, whether grid modernization efforts are bearing fruit, and obstacles to implementation.
About this Whitepaper Series
This series of SEIA policy briefs takes an in-depth look at state-level efforts to modernize the electric utility grid. Built during the last century, the United States electric grid was primarily designed to transport electricity from central station power plants to end-use customers. But with rapid growth of distributed energy resources such as solar, customers are increasingly taking charge of their own energy. Today’s electric grid must allow distributed energy technologies to flourish and provide reliable, low-cost power for consumers. Distributed energy resources, like solar, can also provide power where it is needed most and help avoid investments that a utility would otherwise need to make.
This series explores the elements of electric grid modernization, compares the ways in which two leading states are tackling these issues, and discusses how these efforts are creating new opportunities for solar power. Grid modernization efforts in states present significant risks and opportunities for solar. These efforts will determine how much new solar and other distributed energy resources can interconnect to the grid, identify areas where solar can provide grid services in lieu of utility investments, and in some states, will shape the future of net energy metering.