New NREL Report Sheds Light on How Solar Policies Align with State Demographics


The National Renewable Energy Laboratory publishes a report that aligns solar policy and market success with state demographics. The analysis contextualizes the impact of solar policies, providing needed insight into how policies work in different situations.

We’ve always said that when it comes to solar power, policy trumps sunshine. But there’s still a lot to learn about what are the most effective policies, and what works in which states.

To shed some light on the matter, the National Renewable Energy Laboratory (NREL) has published a report that aligns solar policy and market success with state demographics. The NREL research team organized the 48 contiguous states into four peer groups based on shared non-policy characteristics, such as physical, demographic, and macroeconomic factors. That allowed the researchers to build on previous policy studies by contextualizing the impact of solar policies on PV solar installations.

“Although it is widely accepted that solar policies drive market development, there has not been a clear understanding of which policies work in which context,” lead author Darlene Steward said. “This study provides much-needed insight into the policy scope and quality that is needed to spur solar PV markets across the United States.” 

The report, “The Effectiveness of State-Level Policies on Solar Market Development in Different State Contexts,” includes statistical and empirical analyses to assess policy impacts in different situations. In addition, four case histories augment the quantitative analytics within each state grouping, specifically:


  • Expected leaders: Maryland’s comprehensive policy portfolio, with equal emphasis on all policy types, has driven recent market development.

  • Rooftop rich: Strong interest in clean-energy-related policy distinguishes North Carolina from other states.

  • Motivated buyers: Delaware’s experience shows how targeted market preparation and creation policies can effectively stimulate markets.

  • Mixed: In New Mexico, the leading state for installed capacity in its peer group, policy diversity and strategic implementation have been critical in effectively supporting the market.


Other important conclusions:


  • The the effectiveness of solar policy is influenced by demographic factors such as median household income, solar resource availability, electricity prices, and community interest in renewable energy.

  • The number and the makeup of the policies are key in spurring solar PV markets.

Follow-on research to be released this summer will identify the most effective policy development strategies for each state context, and provide strategies for states to take action.


As part of a larger effort to determine the most successful policy strategies for state governments, this report builds on previous research that investigated the effect of the order in which policies are implemented. The policy stacking theory, which is outlined in the “Strategic Sequencing for State Distributed PV Policies” report, aims to draw private investors to develop PV markets.


This body of work is supported by the Energy Department’s SunShot Initiative, a national effort to make solar energy cost-competitive with traditional energy sources by the end of the decade. Through SunShot, the Energy Department supports private companies, universities, and national laboratories working to drive down the cost of solar electricity to $0.06 per kilowatt-hour.