5 U.S. Solar Markets to Watch: Hidden Opportunities for Demand

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What are the top 5 solar states to watch? They’re not the ones you might expect. At SPI this week, Cory Honeyman of Greentech Media identified some markets whose avorable regulatory landscape, state and utility incentives, and strong market fundamentals prime them for strong solar growth in the next few years.

 

  

 

We’ve all heard by now about the top U.S. states for solar. Most of the current demand, about 87%, is clustered in 6 established state markets. But at SPI this week, Cory Honeyman, Solar Analyst at Greentech Media, divulged some unexpected markets to watch in the next few years.


What constitutes a hidden growth market? The states that are not major solar players now but could be soon feature a favorable regulatory landscape, state and utility incentives, and strong market fundamentals. While they currently represent less than 1% of the U.S. market share, those states are seeing spikes in demand.
 

 

And the states with the hidden markets are … drumroll, please:

 

  • Georgia: Though Georgie has weak state incentives, the market fundamentals and regulatory landscape are strong in the state. Challenges in Georgia are low retail electricity rates and a lack of third-party ownership (TPO), which is illegal there. But on the plus side for the state are high insolation, avoided costs from net metering (NEM), and demand driven by Georgia Power’s procurement plans and feed-in tariff (FIT). All of this adds up to make Georgia the best total emerging market opportunity in the country.

  • Minnesota: Next, we go to sunny Minnesota. Wait, no — low insolation tops the list of drawbacks in the state, coupled with low retail electricity rates. Those are outweighed, though, by Minnesota’s solar carve-out of 1.5% by 2020, an expanded NEM system size up to 1 MW, and a 10% carve-out for systems up to 20 KW. But that’s not all! Minnesota also features legislation targeting small-scale distributed generation (DG), with a 10% small-scale DG carve-out, a community solar program, and NEM certainty through 2017. What does this mean? Minnesota represents the best value proposition of the 5 emerging markets.

  • DC: Small but mighty, DC has an untapped customer base that’s set to be tapped. Though the city’s rooftop potential is limited, a 2.5% solar carve-out by 2023, robust NEM programs, and an undersupplied SREC market will take it far. On top of that, community solar is on the rise in DC. The Community Renewables Energy Act of 2013 legalizes NEM for solar gardens, with an eligible system size of up to 5 MW. Overall, DC provides the best incentives of the 5 states.

  • Louisiana: Louisiana should be prime for solar with its above-average insolation levels. But low retail electricity rates don’t favor solar in the state, and Louisiana has no RPS or PUC mandates. However, 2013 was a good year for solar legislation in Louisiana. The PSC voted in June to retain NEM in its current format, and Act 428, passed in July, guarantees a state tax credit for TPO systems through 2017.

  • Virginia: The deck seems stacked against Virginia, with its low retail rates and below-average insolation levels. Plus, the state has no RPS or PUC mandates to procure solar. There is a good NEM program, though, allowing for 20kW residential and 500 kW nonresidential solar. What gets the state on this list is Dominion Power’s pilot PPA program. Though details are still being worked out, this is expected to be a 50 MW opportunity.