Oregon, Washington Pursue Value of Solar and Storage Studies

Placing a value on the resilience, reliability and environmental benefits of solar and energy storage can help ensure more of these resources are deployed, said state lawmakers and industry representatives at an Oregon Solar and Storage Industries Conference (OSSIA) panel last month.

​Such studies are especially important to the microgrid industry because they focus on determining the value of resilience–a key benefit of microgrids. One effort to do the math comes from the Clean Coalition, which has  developed a metric that standardizes the value of resilience for three tiers of loads–critical, priority and discretionary.

Other states–including California and New York–are also pursuing ways to determine the worth of resilience provided by distributed solar and storage.

Net energy metering compensation dropping in some states

This is important because some utilities are lowering  the compensation customers receive for providing excess solar to the grid. That’s true in Washington.

The Washington State Department of Commerce has contracted with the Washington State Academy of Sciences to study ways to place a value on distributed solar and storage.

The state’s net energy metering (NEM) program, established in 1998, allows customers with solar systems to earn credits for surplus electricity they send to the grid. Under current law, utilities must offer full retail-rate NEM to  customers with renewable systems until either June 30, 2029, or until the renewable systems represent 4% of the utility’s 1996 peak load—whichever comes first.

In 2024, one investor-owned utility and several public utilities had met the 4% threshold and are re-evaluating their rate structures. This has sparked a need to explore new ways to value distributed renewables.

The broader benefits of solar and storage

“It's not just the electricity that modules produce. It's thinking holistically about the broader benefits, things like reliability, resilience, reduced reliance on transmission, infrastructure and local economic impacts,” said Phaedra Beckert, executive director, Washington Solar Energy Industries Association.

​“This work is critical and this informs how utilities will structure our compensation,” she said, adding that utility efforts to lower compensation pose risk to the solar and storage industries. Rigorous, transparent, and complete data will help support the state’s clean energy goals, and it’s important to understand the full value of distributed solar and storage before new utility rates are locked in, she said.

Study will inform stakeholders as they develop compensation mechanisms

​The legislature commissioned the study so that industry, utilities and the legislature would all be on the same page and have one common document to inform them as they develop future policy on net metering and other issues, said Washington State Sen. Victoria Hunt.

​The study is expected to be complete in October.

In Oregon, this type of study would be valuable to expanding the state’s community solar program, which has reached its capacity. The Solar Energy Industries Association recently awarded the Oregon Solar and Storage Industries Association (OSSIA) a $35,000 grant for a value-of-solar study, said Angela Crowley-Koch, executive director at OSSIA, during the panel discussion.

​The Oregon Public Utility Commission counts only actual costs, but not issues like avoided transmission costs when placing a value on community solar, she said.

​In Oregon, a value of solar study could help expand community solar

“The study will help us have a real showing of what the actual costs and benefits are of community solar,” Crowley-Koch said. “If we get a result showing a net benefit, we will expand community solar in Oregon."

​States are recognizing that the integrated resource planning process undervalues resilience because there’s no standard methodology to price avoided outage costs, wildfire risk reduction or grid flexibility into resource planning, said Arif Gasilov,  partner, climate and environmental reporting at Gasilov Group, in an interview.

“When storage only gets valued for energy arbitrage and frequency regulation, it looks expensive; but when you add resilience value, the economics change to be more favorable. That's what Oregon and Washington are trying to formalize,” he said.

California bill seeks to allow DERs to help meet resource adequacy goals

California, New York and other states are also  exploring frameworks that treat grid support and flexibility as compensable services rather than abstract concepts, said Michael Grasso, CEO of Grid Rails, a software platform for virtual power plants (VPP) in an interview.

California SB 913 would allow aggregated distributed energy resources (DERs) and VPPs to count toward resource adequacy and procurement, which would create a clearer path for batteries, electric vehicles, thermostats and flexible loads to compete with peaker plants, he said.

New York’s Value of Distributed Energy Resources program created capacity value, environmental value, demand-reduction value, and locational system-relief value.

Creating a value for DERs is a critical step toward getting more online and benefiting from them.

“Once you can measure it, you can pay for it, and once you can pay for it, you create genuine market incentives for the batteries, electric vehicles and flexible loads already sitting behind the meter,” Grasso said.

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