Value of Solar: Program Design and Implementation Considerations

The use of net energy metering as a rate mechanism for distributed solar transactions has been the topic of increasing discussion. One of the most commonly cited alternatives is known as the value of solar (VOS) mechanism. This analysis sets aside the matter of arriving at a VOS rate and focuses on program design options and how a VOS rate may impact future development of distributed solarprojects. It serves as a resource to utilities, regulators, and stakeholders who are interested in VOS program design and implementation. The report begins by characterizing solar markets under the VOS construct and assesses the economic viability of distributed solar projects under hypothetical VOS rate scenarios, for a wide variety of locations across the United States. This sets thegroundwork for a discussion of specific VOS program design elements and decisions, such as how the VOS rate is applied, how VOS rate adjustments are made, and potential interactions with other solar incentives.