Key Takeaways

  • States can accelerate distributed solar and storage by streamlining interconnection reviews, lowering fees, and increasing transparency for applicants and utilities, according to the latest Freeing the Grid scorecard from Vote Solar and the Interstate Renewable Energy Council (IREC).
  • New Mexico was the only state to earn the top grade of 'A,' indicating it has adopted most of the interconnection best practices identified by Freeing the Grid. The state scored high for its storage interconnection framework, frequency of public reporting on interconnection queues, and adoption of IEEE technical standards for DER interconnection. Eight other states earned a 'B,' meaning they have adopted many best practices but still have room for improvement.
  • IREC and Vote Solar launched Freeing the Grid about 20 years ago to provide state policymakers and regulators with a state-by-state roadmap for DER interconnection. This month's update is the first since 2023 and comes amid major shifts in federal clean energy policy and growing attention to the role of DERs on the grid.

In-Depth Insights

Vote Solar and IREC are among energy nonprofits pushing to add distributed capacity to the grid to improve reliability and resilience and meet demand growth from new loads. Advocates argue that distributed clean energy and renewables overall can be deployed faster and at lower cost than gas-fired generation, which some utilities and hyperscale data center operators are procuring to meet data center demand.

'Given the pressure regulators are under to keep electricity rates down and provide more energy to meet growing demand, this report and its state-specific policy recommendations are especially timely,' IREC CEO Chris Nichols said in a statement.

The report comes as distributed solar and storage face headwinds, with federal tax incentives and other support policies rolling back. Some states are also scaling back clean energy goals due to affordability and timeline concerns.

But Freeing the Grid highlights that beyond incentives or mandates, state-level interconnection administrative processes play a significant role in facilitating or hindering DER deployment. The report evaluates statewide interconnection policies using 10 categories and more than 50 criteria, covering general interconnection rules, review processes, timelines, costs, energy export provisions, data sharing, and dispute resolution.

For example, the 'Rule Applicability' category awards more points to states whose interconnection rules broadly apply to generators and storage systems up to 20 MW. Arizona, California, Illinois, and New Jersey scored high in this category.

The 'Streamlined Review' category favors states that expedite interconnection requests for inverter-based systems up to 5 MW, with extra credit for those using output capacity rather than nameplate capacity as the threshold and including cluster study options. Massachusetts, Michigan, Oregon, and Rhode Island performed well in this category.

Among all states and territories assessed, Oregon and New Jersey improved the most, both rising from a 'D' to a 'B.' But IREC and Vote Solar said both states still have room for improvement. For example, New Jersey could improve its public tracking of interconnection queues and equipment screening processes.

Even New Mexico, the only state to earn an 'A,' has room to improve. IREC and Vote Solar recommend it align voltage and power quality screens in its supplemental review process with IEEE Standard 1547-2018, require utilities to share more interconnection queue data, and allow an 'ombudsman' or third-party mediator to handle interconnection disputes.

IREC and Vote Solar found that while eight states significantly improved their interconnection rules since the 2023 assessment, most states and territories still have inefficient or inadequate DER interconnection policies. The organizations said more than 80% of states scored a 'C' or lower on the A-to-F scale, and about 25% lack generally applicable interconnection rules.

Vote Solar Executive Director Sachu Constantine said in a statement that the organization is pleased to see states making 'substantial progress' in improving the speed and transparency of DER interconnection. But Constantine added: 'Many states still have significant work to do to ensure community power resources like solar can connect to the grid efficiently and equitably.'

States earning an 'F' lack statewide interconnection rules, including populous states like Georgia, Tennessee, and Missouri, as well as smaller states like Wyoming, North Dakota, and Alaska. IREC and Vote Solar recommend these states first adopt statewide rules.

States earning a 'D' scored low in most or all categories. For example, IREC and Vote Solar noted that Texas should evaluate storage systems based on output capacity rather than nameplate capacity and adopt streamlined review processes for inverter-based resources with output capacity greater than 25 kW.