State government officials are creating tax incentives and other financial support to expand clean energy production. Expanding the solar power supply can protect the atmosphere and humanity’s well-being. There are currently five state policies boosting the solar industry.
Government officials are increasing individuals’ solar technology access to protect humanity and the environment. Fossil fuel energy supplies create greenhouse gas emissions, adversely affecting people’s lung health. Residents in high pollution areas have an increased risk of heart attack, asthma, lung cancer and stroke.
Reducing energy-related emissions can improve people’s general health. Solar power also improves ecological conservation efforts by reducing the enhanced greenhouse effect.
Another benefit of renewable energy integration is meeting global sustainability goals. The United Nations established the Paris Agreement in 2015 to preserve natural resources for future generations. It works to shrink the global carbon footprint and reduce climate change effects. Government officials are working toward a sustainable future by financially supporting panels’ manufacturing, transportation and installation processes.
The first state policy boosting the solar industry is the Renewable Portfolio Standards (RPS). The RPS requires utility companies to produce a portion of their energy from sustainable sources.
States can help utility groups adopt solar power by combining the RPS with production tax credits, which help cover companies’ upfront panel purchases and installation costs. Pairing the RPS with tax credits can help transition energy companies away from fossil fuels.
State officials are also financially supporting solar power producers through renewable energy certificates (RECs). They help individuals profit off their solar panel purchases. Energy professionals use RECs to measure a panel’s power production per megawatt-hours (MWh). The accurate calculations help owners sell excess electricity to the grid.
Selling solar power to the grid helps people develop a passive form of income. They can pay off their panels’ upfront costs quickly using RECs.
Net metering compensates utility customers for sharing renewable power with the grid. Most states provide individuals with financial credits when they distribute their excess electricity. Net metering works by measuring people’s energy imports and exports.
Individuals receive a credit if the exported amount exceeds what’s imported. Customers receive utility bills when their monthly imports exceed their exports. Net metering increases the accessibility of energy sharing, giving the solar industry a boost.
Another state policy supporting the solar sector is third-party financing. There are two forms of financial support individuals can access for solar energy.
Customers can lease their panels through a provider and pay lower monthly rates. They may also rely on the Power Purchase Agreement (PPA) to pay fixed rates for solar electricity through producers. Many customers rely on third-party financing to support their power consumption. Nearly 95% of Colorado solar customers rely on it to access emission-free electricity.
The final state policy boosting the solar industry relies on clean energy funds (CEFs). CEFs are exchange-traded funds connected to alternative energy stocks. They are significantly less expensive than mutual funds, helping customers access affordable clean energy.
Small electricity surcharges capitalize the CEFs. People can use their funds to cover energy projects, rebates and installation fees. They may also use them to fund solar power research and development.
Achieving the Paris Agreement requires the U.S. to create effective federal regulations. The solar investment tax credit is decreasing and providing less financial support to customers, but energy professionals expect government officials to develop financially beneficial solar policies soon.
Author bio:
Jane works as an environmental and energy writer. She is also the founder and editor-in-chief of Environment.co.
